Bill Ackman’s Pershing Square has unloaded a sizable stake in Canadian Pacific Railway Limited (NYSE:CP), and losses from its Valeant Pharmaceuticals position are being blamed. The activist investor typically keeps the number of stocks in his firm’s portfolio relatively short as he focuses on building value at the companies he invests in.

Bill Ackman Slashes Canadian Pacific Railway Stake

Pershing Square significantly reduces Canadian Pacific Railway stake

In a post on The Street, Ronald Orol noted that regulatory filings released on Friday reveal that Bill Ackman’s hedge fund firm cut its stake in Canadian Pacific Railway Limited (NYSE:CP) from 9.1% to 6.4%. He suggests that the reduction means he may be less likely to turn his activist strategies on the railroad operator. Ackman is also on the company’s board of directors, and there was speculation that he would push Canadian Pacific to make another big unsolicited offer after canceling its hostile takeover push against Norfolk Southern this month.

The activist investor has been avidly pushing for consolidation in the railroad industry and previously described Norfolk Southern as “an ideal activist situation.” In a major victory at Canadian Pacific in 2012, he was successful in getting the board to take over the company, which resulted in the ouster of then-CEO Fred Green.

Bill Ackman takes profits

Pershing’s original stake in the railroad operator was 12% taken in 2011, and the firm picked up shares at prices between $46.41 and $63.52 each. Friday’s regulatory filing indicates that Bill Ackman unloaded his firm’s Canadian Pacific Railway shares at $148.25 each, which demonstrates a significant level of profit taking and hence suggests that Pershing may be trying to support its massive losses in Valeant Pharmaceuticals. In just a single day in March, the embattled drug maker’s shares lost over half their value in a single day. They’re now hovering at around $36 each, against the August 2015 value of around $262.

The drug maker has been the bane of Pershing’s existence for some time as the fund’s value plummeted 20.5% last year, net fees. In February, Bill Ackman’s firm was down by another 20% just for this year alone. But the more Valeant’s stock price declined, the more shares Pershing added to its portfolio as it raised its position in the drug maker from 8.5% to 9% in February.

Is Bill Ackman cutting back on his activist activities?

Orol suggested that Canadian Pacific Railway Limited (NYSE:CP) may not be the only place Pershing Square is cutting back its activist activities. He noted that also on Friday, the firm announced that a director the firm pushed to get a seat on Zoetis’ board won’t serve another term. It also said that it’s “pleased” with the progress the drug maker has made. Another place of deep cuts for Pershing has been Mondelez, which it slashed its position in from 7.5% to 5.6%. Nelson Peltz’s Trian Management is pushing the company to sell itself.

But while Ackman may be cutting back on his activist activities and be less likely now to go activist on Canadian Pacific as possibly demonstrated by his slashing of the position, there could still be a transaction in the company’s near future. Last week CEO E. Hunter Harrison told analysts that they see other possible opportunities although he wouldn’t elaborate on what those possible opportunities might be. According to Orol, the railroad operator may have its eyes on Kansas City Southern, the smallest major U.S. railroad.

Aside from taking profits in investments that are in the green, Pershing could also use the public closed-end fund it listed on the Amsterdam Stock Exchange to limit the damage it sustains from the problematic Valeant investment, according to Orol’s sources.