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William Ackman Talks P&G Potential

On Wednesday, the activist investor spoke critically of ceo Bob McDonald's schedule and said the consumer products company's stock could be worth more.

Now that J.C. Penney Co. Inc. has secured additional financing and is going through another strategy shift, activist investor William Ackman is back to pressing The Procter & Gamble Co.

Ackman’s Pershing Square Capital Management controls 27.9 million shares of P&G, or 1 percent of the company. The stock gained 0.6 percent to $78.44 Wednesday, valuing Ackman’s holdings at about $2.19 billion.

But Ackman thinks shareholders could do much better.

During a presentation at the Sohn Investment Conference in New York, Ackman said the stock could trade at 20 times estimated earnings per share by June 2015. With dividends and other adjustments that would value the stock at about $125.

Ackman said P&G could grow at 5 percent annually and described the company as one of the “great businesses of the world.”

 

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The investor was not so kind to P&G’s leader, chairman, president and chief executive officer Bob McDonald. Ackman said McDonald serves on the boards of 21 different organizations and estimated that could consume a quarter of his time.

A spokesman for P&G did not immediately return a request for comment late Wednesday.

Ackman did not address Penney’s, which was his focus at the conference last year. The investor took a stake in Penney’s in 2010 and helped install Ron Johnson to remake the retailer, but that effort fell flat as major changes were made without testing and the chain lost nearly $1 billion last year.