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Bill Ackman’s ‘Most Significant New Idea’

As you might remember on Tuesday's Fast Money legendary investor Bill Ackman told the desk about an important conference for investors – one that he was hosting for charity in conjunction with our own Karen Finerman.

(In case you don’t remember - that was when he called a Borders bankruptcy a ‘low probability event’ and in minutes his comments sent Borders shares soaring over 30%! Click here for more on that.)

Well, he invited Fast Money to that very conference -- so we slipped on our best shoes, hopped in a cab and told the driver to get us to the event just as fast as possible.

And you'll be happy we did. At the conference they both revealed some pretty remarkable stuff. And we scribbled down every word. It all follows:

As you might know Ackman holds about 33 million shares of Kraft ; that’s about 2% of the company – in fact, it’s his hedge fund’s single largest investment.

When asked about his newly established position at the conference he replied, "it's our most significant new idea.”

Although Ackman disclosed his position in mid-January he never really talked about why he made the move – that is he never talked about why, until now.

“We think (the acquisition of Cadbury) is a transformational transaction for the company," Ackman said.

"We think that Kraft is interesting on a standalone basis. But we think it's much more interesting when the transaction closes - we think there are margin opportunities in both companies. We think there are cost synergies. And you're paying very little."

In fact he’s so bullish on he merger Ackman said, “Once the transaction's closed, we're gonna tell you -- they're stealing the company."

Interesting stuff, huh? Well there’s more.

Our own Chairwoman, Karen Finerman also revealed her ‘favorite new long idea.’

“CVS Caremark,” she said because the merger creates valuations that are just too attractive to pass up.

“You're getting the PBM side of the business for about 7 times earnings,” she said, “and that is just way, way too cheap.

By comparison, “rivals are trading at 22-23 times.”

What the bottom line? “ We believe there's 50% upside from here,” she says.

What do you think? We want to know!

* In case you’re looking for more trades Finerman tells the desk that Bill Ackman is also bullish on Corrections Corp and General Growth .


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Trader disclosure: On February 5th, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Najarian Owns (AAPL) Call Spread; Najarian Owns (INTC) Calls; Najarian Owns (MS), Is Short (MS) Calls; Najarian Owns (PFE); Najarian Owns (QCOM) Call Spread; Najarian Owns (XLF) Calls; Finerman's Firm Is Short (IJR), (IWM), (SPY), (MDY), (UNG), (USO); Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (CVS); Finerman's Firm And Finerman Own (GOOG); Finerman's Firm Owns (KFT), (MSFT), (TGT); Finerman's Firm And Finerman Own (WFC) Preferred; Terranova Owns (BAC), (JPM), (OIH), (GOOG), (EMC), (AAPL), (DELL), (MSFT)

For JoeTerranova

Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (CLB)
Virtus Investment Partners Owns More Than 1% Of (DLR)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (SKT)

For Will Landers
BlackRock Latin America Fund Is Long (PBR)
BlackRock Latin America Fund Is Long (ITUB)
BlackRock Latin America Fund Is Long (VALE)
BlackRock Latin America Fund Is Long (AMX)

For David Bank
RBC Capital Markets Or Affiliate Managed Or Co-Managed A Public Offering For (DIS), (DISCA) In Past 12 Months
RBC Capital Markets Or Affilaite Received Investment Banking Compensation From (DIS), (DISCA) In Past 12 Months
RBC Capital Markets Is Providing (DIS), (DISCA), (IPG) With Non-Securities Services
RBC Capital Markets Has Provided (DIS) With Investment Banking Services In Past 12 Months
RBC Capital Markets Has Provided (DIS), (DISCA), (IPG) With Non-Securities Services In Past 12 Months

For Mike Khouw
Cantor Fitzgerald & Co. Is A Market Maker In (GILD)

Other Relevant Disclosures:
Finerman's Firm Owned (PLCE) On 1/29/10
Finerman's Firm Owned (MSFT) On 1/27/10
Najarian Owned (BG) Call Spread On 1/5/10
Terranova Owned (BAC) On 1/19/10


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