Canadian Tire stock soars on hedge fund praise

Date: Thursday, May 25, 2006
Author: Lori McLeod, Financial Post

From the Edmonton Journal:

Canadian Tire Corp. shares soared Wednesday after a well-known U.S. hedge fund manager lauded the company at a prestigious New York investment conference.

The stock rose on much heavier than average volume after William Ackman, managing partner at Pershing Square Capital Management, highlighted the retailers' prospects at the Ira W. Sohn Investment Research Conference, held Tuesday at the Lincoln Centre.

Mr. Ackman said he believed there is hidden value in Canadian Tire's real estate, early-stage credit card business and gas stations, said a broker who attended the conference.

In an interview, Mr. Ackman said Canadian Tire has an excellent business and management team, and declined to comment on whether he believed the retailer needed a push to boost its share price.

Mr. Ackman is no stranger to Canada. He helped push Wendy's International Inc. to spin off coffee chain Tim Hortons Inc., and is part of an investor group challenging Sears Holding Corp.'s attempt to take Sears Canada private. 

In a statement, Canadian Tire said it was aware of the comments, and that there were no undisclosed material changes at the company leading to its share price gain.

The conference drew about 1,000 attendees, mainly hedge fund professionals, who shelled out US$3,000 per ticket to hear ideas from some of the industry's top investors.

Other speakers included real estate mogul Sam Zell, and Lee Ainslie III, managing partner at Maverick Capital, which manages over US$10-billion in private investment funds.

Speakers participate free of charge in the event, which was started 11 years ago, and raises funds for children with cancer, blood diseases and other illnesses.  This year's conference raised approximately US$3-million.