10 Best Stocks to Buy According to the Bill & Melinda Gates Foundation Trust

4. Canadian National Railway Company (NYSE:CNI)

Bill & Melinda Gates Foundation Trust’s Stake: $5.56 billion

Number of Hedge Fund Holders: 56

Canadian National Railway Company (NYSE:CNI) is a North American transportation and logistics company headquartered in Montreal, Canada, that focuses on supply chain innovation and collaboration. It provides rail transportation, intermodal solutions, trucking, and marine transport.

In the fourth quarter of 2024, Canadian National Railway Company (NYSE:CNI)’s revenue ton miles fell 3% year-over-year to 59,305 million. Revenues dropped by C$113 million year-over-year to C$4,358 million in Q4, while operating income fell by C$190 million to C$1,628 million. Canadian National Railway Company (NYSE:CNI) also declared a 5% dividend increase for 2025, extending its 29-year growth run, and approved another repurchase program for up to 20 million shares from February 2025 to February 2026.

Appalaches Capital, an investment management firm, released its Q3 2024 investor letter. Here is what the fund said:

“During the quarter, we established core positions in two railroads: Canadian National Railway Company (NYSE:CNI) and CSX Corporation (CSX). The investment thesis is simple. Domestic railroads have not seen volume growth over the last 20 years despite being the cheapest, cleanest, and safest form of freight transportation.4 The lack of volume growth and related share losses to trucking is due to the poor reliability of the networks. However, there is strong evidence to believe that this may not be the case going forward. It seems that investors are overweighting historical characteristics of the industry and not giving credit to recent and sustainable improvements in service metrics. If the rails are able to show any sign of sustained volume growth, our investment should perform very well.

The Canadian railroads have more or less operated at full capacity over the last two decades, while the U.S. networks have not. Why is that? There are a few reasons for the anemic volume growth domestically, but only one of which is not shared by the Canadian railroads: service. In 2017, had you shipped goods by rail in Canada, the odds that your shipment would arrive on time, or the “trip plan compliance” rate, was around 90% or higher. In the U.S., these levels were closer to 50%.5 Maybe you have a different opinion, but I am not particularly excited about using a shipping service that only has a coin flip’s chance of arriving on time, even if it may be more economical…” (Click here to read the full text)