Legendary hedge fund manager Bill Ackman's betting $1.4 billion on a single stock.

He now owns around 37% of Howard Hughes Holdings -roughly 13% of his entire portfolio.

Here's why I'm paying close attention:

Ackman, 58, is known for bold, contrarian investment strategies

In 2004, he founded Pershing Square Capital Management, which quickly gained a reputation for its activist style.

It's now said to manage over $16 billion in assets.

Ackman's hands-on approach involves taking substantial stakes in undervalued companies and working to unlock hidden value.

He's enjoyed remarkable successes like:

→ General Growth Properties:

( $1.6B profit on a $60 million investment)

→ Canadian Pacific Railway (CP):

(Pershing Square earned around $1.45 billion on its investment)

→ Chipotle Mexican Grill:

(Since Pershing bought in 2016, the stock’s surged nearly 660%)

Despite high-profile stumbles like Valeant Pharmaceuticals, Ackman's latest mega bet on HHH showcases his signature approach.

Though the stock's trading at just 1.1x book value, Ackman believes the market's mispricing the company's long-term.

It all hinges on HHH's Master Planned Community (MPC) development business model.

Here's how it works:

↳ HHH acquires land - often tens of thousands of acres - in high-growth markets like Houston, Las Vegas, Phoenix and Hawaii.

↳ It sells parcels to homebuilders, laying the foundation for a new community.

↳ As homes are occupied, demand emerges for offices, retail shops, restaurants and entertainment venues.

↳ HHH builds, owns and operates these commercial properties within the MPC, generating recurring rental income.

↳ These amenities make the surrounding residential land more valuable, enabling HHH to sell more land to homebuilders.

This virtuous cycle plays out over decades.

Through this model, HHH generates diversified revenue streams from:

• Land sales
• Recurring rental income
• Property management fees

Remarkably, HHH has reportedly sold $2.1B of land since 2017 …

While the value of its unsold land jumped from $3.7B to $4.1B - underscoring the value creation potential.

And with a value-creation runway measured in decades not quarters, Ackman believes the market is fundamentally under-appreciating HHH.

When a legendary investor makes a conviction bet this big, it's worth understanding the "why" behind the "what".

Of course, there are risks with a single investment representing such a large portion of a portfolio.

But there’s a reason Forbes estimates he’s personally worth $9 billion+

Ackman's track record suggests HHH could become his latest grand slam