We recently published a list of Billionaire Chris Hohn’s 8 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Canadian National Railway Company (NYSE:CNI) stands against other Billionaire Chris Hohn’s stock picks with huge upside potential.
The Children’s Investment Fund Management, also known as TCI Fund Management, is a British hedge fund firm headquartered in London and founded in 2003 by Sir Christopher Anthony Hohn. Hohn, a British billionaire and Harvard MBA graduate (Baker Scholar), also serves as the fund’s portfolio manager. TCI is distinguished by its value-oriented, fundamental investment philosophy and its focus on long-term, high-conviction positions in globally competitive businesses. The fund employs a private equity-style approach to public market investing, relying on deep fundamental research, constructive engagement with company management, and a willingness to use shareholder activism when necessary to drive performance. Known for its concentrated portfolio structure, the TCI Master Fund maximizes alpha by targeting high-quality companies with sustainable competitive advantages and predictable free cash flow.
TCI’s investment strategy includes opportunistic ventures into corporate transformations and special situations. In line with its activist reputation, the firm is prepared to exert influence on company direction and governance when it deems necessary to unlock shareholder value. This assertive approach has helped cement TCI’s reputation as one of the most successful and influential hedge funds in the world.
A significant aspect of TCI’s operations is its real estate lending business, which was launched in 2014 under the TCI Real Estate Partners Lending Funds. These funds invest alongside The Children’s Investment Fund Foundation (CIFF), the philanthropic arm initially supported by the fund’s profits. The lending strategy centers on first mortgage and senior secured lending for high-quality assets, with a particular focus on prime locations in major North American and European cities. This real estate arm reflects TCI’s broader investment philosophy, seeking security, quality, and long-term value.
As of Q4 2024, TCI managed $42.4 billion in securities across just nine core stock holdings, reflecting its highly concentrated and conviction-driven investment approach. The firm’s blend of fundamental analysis, disciplined value investing, and strategic activism continues to position it as a powerful force in global capital markets. Through its unique alignment of investment and philanthropic missions, TCI also exemplifies how hedge funds can blend financial performance with broader societal impact.
Our Methodology
For this article, we searched through TCI Fund Management’s Q4 2024 13F filings to identify billionaire Chris Hohn’s stock picks with the highest upside potential. We compiled the equities with upside potential higher than 8% 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).
A driverless train traversing vast countryside, illustrating the companies long-distance rail transport services.
Canadian National Railway Company (NYSE:CNI)
Number of Hedge Fund Holders as of Q4: 56
TCI Fund Management’s Equity Stake: $3.01 Billion
Upside Potential as of May 6: 18.62%
Canadian National Railway Company (NYSE:CNI), a major freight railway operator headquartered in Montreal, continues to demonstrate resilience and strategic agility in a volatile economic environment. For the first quarter of 2025, the company reported total revenues of $4.4 billion, marking a 4% increase year-over-year despite challenging winter conditions and modest volume growth. Diluted earnings per share rose 8% to $1.85, a clear sign of the company’s disciplined operational management and pricing power.
Operational metrics supported this financial performance. Revenue ton miles (RTMs) grew by 1% to 60.0 billion, while CN’s operating ratio—a key indicator of efficiency—improved by 20 basis points to 63.4%. This highlights the company’s ability to enhance profitability even in a low-growth volume environment. CEO Tracy Robinson noted a “strong start to the year,” emphasizing improved financial metrics and successful right-sizing of resources to match demand.
Canadian National Railway Company (NYSE:CNI) also delivered a notable 18% increase in free cash flow, which reached $626 million for the quarter. This was driven by both higher operating income and lower capital expenditures, reinforcing the company’s commitment to efficient capital allocation. Additionally, Canadian National Railway Company (NYSE:CNI) announced a 5% increase in its dividend for 2025, signaling strong confidence in the company’s financial outlook and a consistent focus on shareholder returns.
Among billionaire Chris Hohn’s stock picks with huge upside potential, Canadian National Railway Company (NYSE:CNI) stands out with a statistic of 18.62% due to its combination of financial discipline, infrastructure scale, and transcontinental reach. Its extensive North American network, coupled with improving margins and robust cash generation, positions the company as a compelling long-term investment. As trade dynamics evolve and intermodal demand grows, CN’s strategic positioning and operational efficiency could help unlock meaningful shareholder value over time.
Appalaches Capital stated the following regarding Canadian National Railway Company (NYSE:CNI) in its Q3 2024 investor letter:
“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)
Overall, CNI ranks 3rd on our list of Billionaire Chris Hohn’s stock picks with huge upside potential. While we acknowledge the potential of CNI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CNI but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
