Bill Ackman Bets Big on Undervalued Stock – Asset Manager Affirms Upside Potential

I have to admit, the story involving Bill Ackman and Moody’s has really piqued my curiosity. Here we have an investor of Ackman’s caliber making a massive bet on a single stock—and almost immediately, a heavyweight like JPMorgan Markets chimes in with, “Yes, there’s still headroom.” That’s what I love about the stock market: when suddenly everyone piles onto the same horse without the stock already “rocketing through the roof.”
But who—or what—is Moody’s, anyway? Most people recognize the name, but what do they actually do? Moody’s is essentially the academic overachiever of the financial world. Governments and corporations come to them to have their creditworthiness evaluated—and investors trust those ratings. In uncertain times like these, where crises seem to be brewing everywhere, a reliable authority like Moody’s becomes even more valuable. And it seems JPMorgan has recognized that.
What I find interesting is that despite this rock-solid business foundation, Moody’s remains undervalued. The stock has indeed risen in recent months, but according to JPMorgan, it’s still trading well below its “true” value. Classic metrics like P/E and P/B are lower than their long-term averages. And then there’s the cash flow story: Moody’s generates steady revenue, maintains a strong balance sheet, and could weather even rougher economic waters. Sounds almost too good to be true, doesn’t it?
But—and this is what makes the stock market so fascinating—even a Bill Ackman doesn’t get it right every time. Moody’s has taken its lumps in the past, most notably during the 2008 financial crisis, when its ratings on toxic mort



gage-backed securities were later criticized as overly optimistic. And the competition isn’t standing still: S&P and Fitch are squeezing margins, while alternative data providers are making life harder for traditional credit rating agencies.
Still, when an investor like Ackman makes a move, it’s always a signal. The man has built a track record at Pershing Square Capital of spotting undervalued companies—think Chipotle, which thrived after his investment. Perhaps he sees similar potential in Moody’s, or even a strategic realignment or acquisition play.
So what does this mean for us investors? For starters, we should understand that Moody’s isn’t your typical “lottery ticket” stock. It’s stable, but not a sprint—more like a marathon. If you’re willing to think long-term and stomach the occasional dry spell, this could be a compelling opportunity. Short-term volatility is likely, especially if market sentiment takes another turn for the worse.
For me personally, this is a great reminder not to overlook the less glamorous names when picking stocks. Moody’s may not be the flashy tech darling of the moment, but sometimes it’s these steady, old-school businesses that deliver the best returns over time. And when someone like Ackman backs the same horse, it suddenly becomes a whole lot more intriguing, doesn’t it?
Bottom line: Moody’s could be a bargain—provided you believe in the long-term resilience of its business model and are prepared to ride out volatility with patience. For those who fit that profile, it might just be a position worth taking. And who knows—maybe Moody’s is due for its next big upward move.