ValueWalk On What Might Be Pershing Square's 'Big Secret Short'

ValueWalk’s Jacob Wolinsky published a model analyzing Bill Ackman’s Pershing Square Holdings on Thursday.

Using data from public disclosures, Wolinsky may have discovered a “big secret short” position in the hedge fund’s portfolio that was initiated in November.

Based on fund data, monthly performance and market capitalization, Wolinsky was able to produce a list of likely shorts.

Actavis plc ACT, Wal-Mart Stores, Inc. WMT, Zoetis Inc ZTS and Best Buy Co Inc BBY were all cited as the potential new short, along side the already well-known Herbalife Ltd. HLF short.

Ultimately, Wolinsky’s top pick for the new short position was NRG Energy Inc NRG.

First, the stock’s performance matched the quantitative parameters in Wolinsky's model. “Then on top of that, add in the fact that Pershing recently appointed Stephen Fraidin (Kirkland & Ellis) as Pershing Square’s Vice Chairman,” according to Wolinsky.

Kirkland & Ellis has also represented NRG on numerous transactions, enjoys a close relationship with Ackman and has been involved in the Pershing's M&A transactions. For those reasons, Wolinsky felt that NRG may be the secret short.

NRG Energy recently traded at $25.32, down 2.31 percent.