We recently published a list of Billionaire Bill Ackman’s 7 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Canadian Pacific Kansas City Limited (NYSE:CP) stands against other billionaire Bill Ackman’s 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.
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).
A freight train making its way through a majestic mountain range, snow-capped peaks in the distance.
Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Holders as of Q4: 74
Pershing Square’s Equity Stake: $1.08 Billion
Upside Potential as of May 5: 24.35%
Canadian Pacific Kansas City Limited (NYSE:CP), headquartered in Calgary, Canada, is a major North American rail freight transportation provider that has significantly expanded its operations following the acquisition of Kansas City Southern in 2023. This transformative merger allowed CP to become the only single-line railroad connecting Canada, the United States, and Mexico, creating a seamless logistics corridor across the three largest economies in North America. The company now operates over 20,000 miles of rail network and employs approximately 20,000 workers. CP offers a wide range of freight transportation services, logistics solutions, and integrated supply chain expertise to its customers across the continent.
By the end of the fourth quarter of 2024, Bill Ackman’s Pershing Square held approximately 14.9 million shares in Canadian Pacific Kansas City Limited (NYSE:CP), signaling strong conviction in the company’s long-term growth. Hedge fund interest in the stock also surged during this period, with 74 hedge funds holding stakes in CP by year-end, up from 52 in the previous quarter, reflecting rising institutional confidence.
Financially, Canadian Pacific Kansas City Limited (NYSE:CP) reported a robust performance for the first quarter of 2025, with revenue increasing 8% year-over-year to $3.8 billion. The company also achieved a 150-basis-point improvement in its operating ratio, now standing at 62.5%, which indicates improved operational efficiency. CP’s commitment to safety has also yielded positive results, with the company reporting record improvements in both train accident rates and personal injuries. Furthermore, in a demonstration of its strong financial health and shareholder value commitment, CP announced a 20% increase in its quarterly dividend.
The company continues to leverage its unique three-nation network to capitalize on emerging trade opportunities, especially between Canada and Mexico. This strategic advantage has already generated over $100 million in new revenue streams, positioning Canadian Pacific Kansas City Limited (NYSE:CP) as a critical player in North American trade logistics. With a solid operational foundation, growing investor confidence, expanding market opportunities, and an upside potential of 24.35%, CP is among the stock picks with huge upside potential in Bill Ackman’s portfolio.
Overall, CP ranks 3rd on our list of billionaire Bill Ackman’s stock picks with huge upside potential. While we acknowledge the potential of CP 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 CP 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.
