Rob Citrone founded Discovery Capital Management in 1999. Based in Connecticut, Discovery Capital is one of the Tiger Cub hedge funds. Rob Citrone worked as a portfolio manager at Fidelity Investments and Julian Robertson’s Tiger Management before founding Discovery Capital. Citrone was also a wrestler in high school and today owns a small slice of his favorite football team, the Pittsburgh Steelers. His firm focuses on liquidity, valuation multiples, past and potential growth in picking stocks, and has a focus on technology, services, basic materials, and financial sectors. The last reported 13F filing for Q4 2024 included $1.47 billion in managed 13F securities and a top 10 holdings concentration of 44.09%.
Robert Citrone recently cut his long equity portfolio. In his January monthly letter, obtained by the Institutional Investor, the firm halved its net equity exposure to 25% from a peak of 50% just at year-end to go flat to short in developed markets. He has been expecting a stock market correction of 5% to 7%. He believes it is meaningful enough to reduce risk and potentially be short, even though it’s not a large sell-off. Citrone thinks the market is expensive in historical terms, especially relative to interest rates. Still, the majority of global investors are long corporate America, including venture, private equity, private credit, long-only equity, and/or credit long-short hedge funds, even as the US enters tariff uncertainty and no more Fed cuts are anticipated in the near term.
That being said, we’re here with a list of billionaire Rob Citrone’s 10 small-cap stock picks with huge upside potential.
Our Methodology
To compile the list of billionaire Rob Citrone’s 10 small-cap stock picks with huge upside potential, we sifted through the Q4 2024 13F filings of Discovery Capital Management from Insider Monkey. From these filings, we checked the upside potential from CNN for the top 50 stock picks that were trading between $1 billion and $10 billion and ranked the stocks in ascending order of this upside potential. We have also added Discovery Capital Management’s stake in each company and the hedge fund sentiment around each stock.
Note: All data was sourced on May 8.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Billionaire Rob Citrone’s 10 Small-Cap Stock Picks with Huge Upside Potential
10. Parsons Corp. (NYSE:PSN)
Discovery Capital Management’s Stake: $14.23 million
Number of Hedge Fund Holders: 41
Market Capitalization as of May 8: $6.87 billion
Average Upside Potential as of May 8: 18.74%
Parsons Corp. (NYSE:PSN) provides integrated solutions and services in the defense, intelligence, and critical infrastructure markets. It offers critical technologies like cyber, missile defense, intelligence, electronic warfare, and border security & critical infrastructure protection. It also provides AI/ML, cloud, systems integration, and transportation network software.
Parsons’ Critical Infrastructure segment represented 46% of the company’s total Q1 2025 revenue due to infrastructure spending in both North America and the Middle East. In the US, infrastructure investment is projected to continue until 2028, with a subsequent 6 to 8-year tail. Parsons is also securing large and high-priority projects in hard infrastructure areas like roads, highways, bridges, airports, and rail.
The Critical Infrastructure segment saw a 14% revenue increase in Q1 year-over-year, with 8% organic growth. This performance contributed to a record first-quarter adjusted EBITDA margin of 10.3% for the segment, a 2.6% increase year-over-year. The segment also made over $1 billion in quarterly contract awards. Earlier in February, Truist Financial analyst Tobey Sommer reiterated his Buy rating on Parsons Corp.’s (NYSE:PSN) shares, with a $85 price target.
Artisan Small Cap Fund added to its position in the company and stated the following regarding Parsons Corporation (NYSE:PSN) in its Q4 2024 investor letter:
“Notable adds in the quarter included John Bean Technologies, Parsons Corporation (NYSE:PSN) and Gitlab. Parsons Corporation is a leading disruptive technology provider in the national security and global infrastructure markets, with capabilities across cyber and intelligence, space and missile defense, transportation, environmental remediation, urban development and critical infrastructure protection. We believe the company is well positioned to benefit from several secular growth drivers, including growing defense spending, an acceleration in North American infrastructure spending, growing Middle Eastern infrastructure spending as the region’s countries diversify their economies from oil to entertainment and tourism, and growing per- and polyfluoroalkyl substances remediation spending. Shares declined as the proposed Department of Government Efficiency caused greater uncertainty in the defense and infrastructure markets. However, within both end markets, we have high confidence that its programs are aligned with required spending rather than areas that could be targeted for efficiency savings. Therefore, we added to the position.”
9. Everus Construction Group Inc. (NYSE:ECG)
Discovery Capital Management’s Stake: $13.15 million
Number of Hedge Fund Holders: 39
Market Capitalization as of May 8: $2.48 billion
Average Upside Potential as of May 8: 18.84%
Everus Construction Group Inc. (NYSE:ECG) provides contracting services in the US. It operates through two segments: Electrical & Mechanical (E&M) and Transmission & Distribution (T&D). It serves utilities, manufacturing, transportation, commercial, industrial, institutional, renewables, and governmental customers.
Everus’s E&M segment made ~$550 million in Q4 2024 revenue, which was an improvement of 21% year-over-year due to higher workloads in the commercial market, particularly within the data center sub-market. Growth in the institutional and service, and other end markets, also triggered this increase. For the full year 2024, while overall E&M revenues softened by 5%, the segment experienced increased revenue growth in H2 of the year, notably in the data center sub-market.
The E&M segment’s backlog also contributed significantly to the company’s total backlog of $2.8 billion, which was up 38% year-over-year. Everus’ 2025 guidance projects overall revenue between $3 and $3.1 billion, with E&M expected to be a key contributor. While Everus Construction Group Inc. (NYSE:ECG) is monitoring potential impacts from emerging technologies like DeepSeek on data center spending, current industry commentary suggests continued investment in this area.
Middle Coast Investing initiated a position in the company and stated the following regarding Everus Construction Group, Inc. (NYSE:ECG) in its Q1 2025 investor letter:
“Everus Construction Group, Inc. (NYSE:ECG) – I mentioned this briefly last quarter. We had a small position in a spin-off from MDU Resources, a utility company, and sold that position not long into Q1 at $70/share. The stock dived after its earnings report underwhelmed the market, and then further due to sector worries. We bought between $39 and $48, and the stock finished the quarter at $37.09.
Everus primarily builds power lines, pipelines, and similar infrastructure. It is based in North Dakota but operates everywhere in the U.S. except New England and Wisconsin. Providing construction services means it should be able to maintain decent gross margins, since it aligns its costs to each given project. It is levered to demand for power and energy infrastructure, which is needed in the United States. Its revenue backlog grew 38% in 2024 and is nearly equal to 2024 revenue (not all of that backlog will be realized in 2025, but also, 2024 revenue was 41% higher than 2023 year-end backlog). It has been a steady grower for the past five years. This is the sort of business that gets a good multiple, and in a stable environment is worth in the $60s or $70s (around where we first sold it)…” (Click here to read the full text)
