In this article, we discuss Billionaire Brian Higgins’ Stock Picks with Huge Upside Potential.
Brian J. Higgins, founder and managing partner of King Street Capital, recently emphasized that successful investing in complex global markets required a blend of “analytical rigor” and “trading acumen” to navigate shifting liquidity cycles. During the FII Priority conference, he highlighted the evolving investment landscape in the Middle East, specifically announcing a new partnership with the Public Investment Fund (PIF) in Saudi Arabia to develop a credit fund for the region. Higgins noted that for survival in the credit markets, investors must remain “skeptical” and “conservative,” stating that “the key hallmark of investors that survive are those who… balance it with the trading acumen to be able to pick the entry and exit points and be respectful of liquidity or lack thereof”.
READ MORE: David Einhorn Stock Portfolio: Top 10 Stock Picks.
Regarding global infrastructure and the impact of emerging technologies like AI, Higgins warned that a “misallocation of resources” often occurred when capital was diverted from essential maintenance toward speculative trends. He pointed out that while innovation generally raised the global standard of living, it could also lead to a $15 trillion infrastructure gap if current depreciation was not met with adequate capital expenditure. Higgins observed that “politicians around the world” often hesitated to raise taxes for replenishment, leading to a situation where “if any organization… underspend today, it’ll be the future people’s problem”. He remained cautious about valuation “outer bounds,” noting that while King Street was active in the AI ecosystem, financing GPU chips and data centers, they also saw significant “short opportunities” where market enthusiasm had led to billions in “misspending of assets”.
READ MORE: Mario Gabelli Stock Portfolio: Top 10 Stock Picks.
Our Methodology
For this article, we selected stocks by combing through the 13F portfolio of King Street Capital at the end of the fourth quarter of 2025. The top stocks were ranked based on their analyst upside potential and the top 10 from this list were filtered out. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q4 2025 database of 1041 elite hedge funds.
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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).
Billionaire Brian Higgins’ Stock Picks with Huge Upside Potential
10. Annaly Capital Management, Inc. (NYSE:NLY)
King Street Capital’s Stake: $32 Million
Analyst Upside Potential: 6%
Annaly Capital Management, Inc. (NYSE:NLY) has featured in the 13F portfolio of King Street Capital since the third quarter of 2025. When the position was first disclosed, the fund owned 600,000 shares in the company. Filings for the fourth quarter of 2025 show that the fund owned over 1.4 million shares in the firm, up close to 137% compared to filings for the previous quarter. The company operates a diversified capital manager, engaged in the residential mortgage finance business. It invests in agency mortgage-backed securities collateralized by residential mortgages, non-agency residential whole loans, and securitized products within the residential and commercial markets.
Interest in Annaly Capital Management, Inc. (NYSE:NLY) is driven primarily by its role as a high-yield stabilizer in a shifting interest rate environment. The firm has performed a successful diversification beyond just Agency Mortgage-Backed Securities. It has shifted significantly toward Residential Credit and Mortgage Servicing Rights. These assets act as a natural hedge against rising rates because they become more valuable when refinancing activity slows down. Annaly’s residential credit arm, Onslow Bay, hit record volumes in Q4 2025. The firm has consistently out-earned its dividend. While many high-yield REITs were forced to cut distributions during the volatility of 2024 and 2025, Annaly generated an 8.6% economic return in Q4 2025 alone and over 20% for the full year.
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