Activist investor William Ackman said he increased his company's stake in Target Corp., the Minneapolis-based discount chain.
Ackman, whose Pershing Square Capital Management lobbied McDonald's Corp. and Ceridian Corp. to boost share prices, said in an interview Wednesday that Target is "probably the best retailer in the world."
Target shares have declined 15 percent since Ackman's stake was first reported in July. Pershing Square said in a July 16 regulatory filing that it held a 9.6 percent stake through options and equity holdings. The investment has grown since then, Ackman said.
"We have enormous respect for management," Ackman, 41, said at the Value Investing Congress in New York. "They are doing exactly the right things."
Target climbed $2.58, or 4.5 percent, to close Wednesday at $59.58. The shares have advanced 4.4 percent this year.
The discount retailer will likely benefit from weakness in the economy as shoppers look for less-expensive goods, the investor said.
"Low-income, upper-income, millionaires, billionaires like shopping there," Ackman said. "It's got a universal appeal. It's got incredibly high-quality products."
Target, under pressure from Ackman to raise its share price, said in September it would examine whether to sell its $7 billion credit-card portfolio and boost share buybacks. Target hired Goldman Sachs Group Inc. to help evaluate a potential sale. Any decisions, including a review of its use of debt, will be made by the end of December, the company said in September.
"They've got some assets the market doesn't really give them credit for," Ackman said. Target is taking a "hard look" at the credit-card business.
Ackman also invested in retailer Sears Holdings Corp., the biggest U.S. department-store chain. He disclosed last month that he owns a 5 million-share stake in the Hoffman Estates, Ill.-based company.
"Sears is very different from Target," Ackman said. "It's not the best retailer in the country. It's really a holding company, as opposed to a retailer."
