Pershing Square Holdings (LSE:PSH) is a unique investment vehicle in the FTSE 100. Run by billionaire hedge fund manager Bill Ackman, it’s an investment holding company that offers exposure to 10-12 world-class companies.

While recent performance has been patchy, Ackman’s long-term record remains excellent. Over nearly 23 years, his hedge fund has generated a 15.6% annualised net return (after fees) versus 11% for the S&P 500.

Therefore, I keep an eye on what moves Pershing Square has been making. And this week the firm revealed six new stocks it bought in the first half of the year.

Here are three that caught my eye.

The card networks

The first two were Visa (NYSE:V) and Mastercard (NYSE:MA), the world’s dominant payments networks. Between them, they processed over 119bn transactions worldwide in the last quarter.

Pershing Square wrote: “Both are capital-light ‘toll-takers’ that earn a nominal fee on each transaction without taking any material risk and are natural beneficiaries of higher inflation…Each new member and transaction further strengthens the networks and deepens their data advantage“.

Indeed. This is why I owned both stocks for many years. However, I just hold Visa nowadays because there’s growing regulatory risk due to the networks functioning as a virtual duopoly.

If regulation forced some transaction traffic onto alternative networks, then the strong growth both have enjoyed for decades might slow noticeably. Both could also face more antitrust fines.

On the other hand, these are world-class businesses with truly remarkable profit margins. And revenue from value-added services like data analytics and fraud prevention now make up 30%-40% of revenue.

Looking ahead, further growth seems nailed on, with card volumes still only roughly half of addressable consumer spending globally. E–commerce and agentic AI shopping are long-term tailwinds.

Mastercard’s forward earnings multiple is a little bit pricier than Visa’s, but it’s also growing faster, especially internationally. However, I think it’s a coin toss and both are worth considering.

A fallen star

The third stock Ackman bought was Netflix (NASDAQ:NFLX), which is down 42% since last June. This despite being the undisputed streaming champion, with more than 325m subscribers.

So what’s wrong? The potential impact of short-form videos on its business is one concern. To be fair, shortening attention spans among younger generations could be a challenge. 

The FTSE 100 fund isn’t worried though, seeing “short-form video as a distinct offering from scripted content rather than a direct competitor“.

Also, Pershing Square points out that Netflix’s content spend has grown at just a 2% annual rate since 2021. This has helped operating margins expand from 21% to approximately 31.5% in this time. 

Moving forward, Ackman expects Netflix to compound earnings at close to 20% annually, boosted by share buybacks. If this happens, the stock looks ‘on sale’ today at just 24 times forward earnings.

As such, I see Netflix at $78 as another one to dig into. 

Pershing Square?

Finally, are Pershing Square shares also worth considering? I think so, given that they’re trading a whopping 32.5% discount to the fund’s net asset value.

The portfolio’s high concentration adds considerable risk. But other holdings like Amazon, Microsoft and Uber are also world-class.

If Ackman is right about these businesses’ ability to compound earnings long into the future, today’s discount will look like a handsome bargain.

Should you invest £5,000 in Visa right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Visa made the list?

Ben McPoland own shares in Uber and Visa.