In this article, we will discuss Billionaire Bill Ackman’s 7 Stock Picks with Huge Upside Potential.
Known commonly as Bill Ackman, William Albert Ackman is the founder and Chief Executive Officer of Pershing Square, a hedge fund renowned for its focused investment strategy and high-conviction portfolio. Ackman is known for maintaining a highly concentrated investment approach, often holding stakes in only 8 to 12 companies at any given time. By the end of the fourth quarter of 2024, Pershing Square’s portfolio was valued at $12.66 billion and included ten stocks, with over 50% of the fund’s capital concentrated in just the top four investments. This exemplifies Ackman’s commitment to identifying and capitalizing on undervalued opportunities, favoring companies that he believes are mispriced in relation to their intrinsic, long-term value.
Ackman’s investment philosophy has largely centered on value-based principles and activist strategies. His ability to identify market inefficiencies and apply pressure for change has yielded significant returns in the past. Pershing Square’s portfolio selections typically reflect this strategy, with a strong emphasis on companies with solid fundamentals and potential for operational or financial turnaround.
In early 2024, Ackman took a notable step by launching a U.S. closed-end fund named Pershing Square USA, Ltd. However, the initial public offering (IPO) of the fund was abruptly canceled just one day after filing with the Securities and Exchange Commission (SEC). The cancellation followed an unexpected drop in valuation from an intended $25 billion to just $2 billion. Following the cancellation, Ackman posted on the social media platform X that the firm would “report back once we are ready to launch a revised transaction,” suggesting that Pershing Square USA may still proceed in the future without a traditional stock exchange listing.
Ackman’s active engagement with both market trends and political developments illustrates his multifaceted approach to investing. As Pershing Square continues to evolve, close attention is being paid to the stocks within its concentrated portfolio, particularly those with the highest upside potential in light of current economic and political tailwinds.
Now that we have sufficient context, let’s analyze billionaire Bill Ackman’s 7 stock picks with huge upside potential.
Bill Ackman of Pershing Square
Our Methodology
For this list, we searched through Pershing Square’s Q4 2024 13F filings to identify billionaire Bill Ackman’s stock picks with the highest upside potential. We compiled the equities with upside potential higher than 12% at the time of writing this article and analyzed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
Billionaire Bill Ackman’s 7 Stock Picks with Huge Upside Potential
7. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders as of Q4: 83
Pershing Square’s Equity Stake: $1.49 Billion
Upside Potential as of May 5: 12.94%
Chipotle Mexican Grill, Inc. (NYSE:CMG) is an American multinational chain of fast-casual restaurants specializing in Mexican cuisine such as burritos, bowls, and tacos. The brand has earned a strong following among both younger and older demographics, thanks to its responsiveness to local tastes and popular culture. Among its key investors is billionaire hedge fund manager Bill Ackman, who has maintained a stake in the company since 2016. Through his firm, Pershing Square, Ackman currently holds approximately 24.65 million shares of Chipotle, making up 11.74% of his entire portfolio. The company is one of just two restaurant-sector investments in Pershing Square’s portfolio, reflecting Ackman’s long-term confidence in its growth potential.
For the first quarter of 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG) reported adjusted earnings per share of 29 cents, slightly beating analyst expectations of 28 cents. However, revenue came in at $2.88 billion, just under the anticipated $2.95 billion. Despite a 6.4% year-over-year increase in net sales, the company fell short of key performance benchmarks. Same-store sales declined by 0.4%, missing analyst estimates of 1.7% growth, while restaurant transactions dropped 2.3%.
Economic uncertainty appears to be dampening consumer spending, with CEO Scott Boatwright noting that many customers began scaling back visits in February due to financial concerns. This trend was confirmed by the company’s visitation studies, which showed that saving money was the predominant reason for reduced restaurant frequency. The slowdown in traffic continued into April, despite March seeing a modest lift in sales from the limited-time introduction of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s chipotle honey chicken.
Despite these challenges, Boatwright expressed confidence in Chipotle’s ability to rebound in the second half of 2025. He emphasized ongoing investments in key areas such as staffing, culinary innovation, value offerings, and brand growth. The company now forecasts same-store sales to grow in the low single digits for the full year, revising its earlier projection of growth in the low- to mid-single-digit range. Nevertheless, investor sentiment remains relatively optimistic. With an estimated upside potential of 12.94%, Chipotle Mexican Grill, Inc. (NYSE:CMG) remains one of the high-upside stocks in Bill Ackman’s portfolio, underscoring its strategic importance amid a volatile consumer landscape.
Parnassus Growth Equity Fund stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q3 2024 investor letter:
“Against the backdrop of macro uncertainty, we opportunistically added high-quality businesses that had sold off amid overstated fears of consumer spending weakness. These new holdings include fast-casual chain Chipotle Mexican Grill, Inc. (NYSE:CMG) and Latin American online retail giant MercadoLibre in the Consumer Discretionary sector.
Chipotle is a leader in the fast casual dining category, bolstered by strong brand affinity and the growing trend toward healthy eating. While near-term consumer weakness and margin pressure are expected, we believe Chipotle can navigate it better than peers due to its superior execution and long runway for new store openings.”
6. Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Fund Holders as of Q4: 31
Pershing Square’s Equity Stake: $1.50 Billion
Upside Potential as of May 5: 15.21%
Restaurant Brands International Inc. (NYSE:QSR) is a Canadian-American multinational fast-food holding company and one of two restaurant-related investments held by billionaire investor Bill Ackman through his hedge fund. As of the fourth quarter of 2024, Pershing Square owns over 23 million shares in the company, valued at just under $1.5 billion. Ackman’s position reflects his continued confidence in the long-term growth potential of Restaurant Brands International, which operates more than 30,000 restaurants in over 120 countries. The company owns four major quick-service restaurant chains: Tim Hortons, Burger King, Popeyes, and Firehouse Subs. It was formed in 2014 from the merger of Tim Hortons and Burger King and later expanded through the acquisition of Popeyes in 2017 and Firehouse Subs in 2021.
For its most recent quarter, Restaurant Brands International Inc. (NYSE:QSR) reported better-than-expected financial results. Adjusted earnings per share came in at 81 cents, beating analysts’ expectations of 79 cents. Revenue reached $2.3 billion, also exceeding forecasts of $2.27 billion. Despite a decline in net income to $361 million, down from $726 million a year earlier, the company saw net sales climb 26%. This growth was largely attributed to the acquisitions of its largest U.S. Burger King franchisee and Popeyes China, which took place in the prior year.
CEO Josh Kobza highlighted the company’s performance, noting that a 2.5% same-store sales growth across all brands represented a solid showing relative to industry peers. Internationally, same-store sales grew by 4.7%, surpassing analyst estimates of 2.7%, driven primarily by strength in Burger King and Popeyes. Restaurant Brands International Inc. (NYSE:QSR) also expanded its restaurant base by 3.4%, adding 1,055 new locations compared to the same period the previous year. Looking ahead, Restaurant Brands plans to invest between $400 million and $450 million in 2025 on capital expenditures, tenant inducements, and other strategic incentives to fuel further growth.
The company’s growth potential has also caught the attention of other institutional investors. According to Insider Monkey’s database, 31 hedge funds held positions in Restaurant Brands International Inc. (NYSE:QSR) at the end of Q4 2024, up from 29 in Q3. This growing interest underscores investor confidence in the company’s strategic direction and international expansion opportunities.
Pershing Square Holdings stated the following regarding Restaurant Brands International Inc. (NYSE:QSR) in its Q2 2024 investor letter:
“Restaurant Brands International Inc.’s (NYSE:QSR) two largest brands delivered impressive results this quarter. Tim Hortons’ same-store sales in Canada grew by nearly 5%, outpacing all competitors and the broader industry. These strong results are due to the multi-year investment the company has made in broadening its food platform and expanding its lead in cold beverages. Burger King International reported same-store sales of more than 2%, despite ongoing boycotts of western brands. Burger King is outperforming McDonald’s on a one-year basis and relative to pre-covid levels. Its success in international markets provides a blueprint for its ongoing turnaround in the U.S., where the company is focused on modernizing its store base and growing its digital business. As part of that effort, the company acquired Carrols, Burger King’s largest franchisee, which will allow the company to accelerate remodels and help shift the franchise system towards smaller more entrepreneurial operators, setting the brand up for long-term success. The company intends to refranchise the Carrols restaurants to smaller operators once the stores are performing at strong levels.
In light of weakening economic conditions and ongoing boycotts, the company lowered its net restaurant and system-wide sales growth outlook this year. In response, the company is enacting a cost savings program which will enable it to grow operating profits by more than 8%. While an uncertain environment may impact unit growth in the near-term, we believe each of the company’s brands will benefit in a slower economic environment with consumers trading down.
Despite strong performance at its largest brands, consistent operating profit growth, and a business model that benefits in a recessionary environment, QSR still trades at a meaningful discount to its peers. As the company returns to its historic mid-single-digit unit growth and delivers consistent performance at each of its brands, we believe the company’s share price will more accurately reflect its improving fundamentals.”
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