We recently published a list of Billionaire Chris Hohn’s Top 9 Stock Picks. In this article, we are going to take a look at where Canadian National Railway Company (NYSE:CNI) stands against Billionaire Chris Hohn’s other top stock picks.
Chris Hohn is a British hedge fund manager, philanthropist, and activist investor, best known for founding TCI Fund Management. Renowned for his aggressive yet principled investment strategies, Hohn has not only achieved exceptional financial success but has also used his influence to advocate for corporate accountability and social causes, particularly in climate change and child welfare. He was born in 1966 in England to an immigrant family. His father, a Jamaican-born car mechanic, and his mother, a legal secretary, emphasized the importance of hard work and education. Hohn excelled academically, earning a first-class degree in economics and accounting from the University of Southampton. He later attended Harvard Business School, where he graduated with an MBA and earned distinction as a Baker Scholar, placing in the top 5% of his class.
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Hohn began his career in finance with a position at Perry Capital, a New York-based hedge fund, where he honed his skills in investment management. By 2003, after gaining substantial experience and building a network of investors, Hohn decided to establish his own hedge fund with a unique vision: blending high returns with philanthropy. In 2003, Hohn founded The Children’s Investment Fund Management (TCI) in London. The hedge fund’s name reflected its dual mission: to generate exceptional investment returns and to support philanthropic efforts through a linked charity, The Children’s Investment Fund Foundation (CIFF). TCI follows a concentrated activist investment strategy, often holding large stakes in a small number of companies. Hohn uses these positions to push for changes in corporate governance, operational efficiency, and environmental practices.
TCI has delivered an average annualized return of over 15% since its inception, outperforming many peers in the hedge fund industry. As of the end of the third quarter of 2024, TCI manages over $40 billion in 13F securities, making it one of the largest hedge funds in Europe. Hohn has pushed major corporations to adopt stricter environmental policies and disclose their carbon emissions. He also advocates for linking executive compensation to environmental performance. In 2019, he publicly criticized governments and companies for not addressing aviation’s role in climate change, calling for greater transparency and accountability. Hohn’s strategy emphasizes long-term value creation, focusing on businesses with strong fundamentals but inefficiencies in management or operations.
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For this article, we selected stocks by combing through the 13F portfolio of TCI Fund Management at the end of the third quarter of 2024. These stocks are also popular among other 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 275% since May 2014, beating its benchmark by 150 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: 44
TCI Fund Management’s Stake: $4.1 billion
Canadian National Railway Company (NYSE:CNI) engages in rail and related transportation business in North America, providing transportation for various goods. There are multiple factors that highlight why Canadian National Railway (NYSE:CNI) is a compelling investment opportunity. The first contributing aspect is the robust financial growth, as depicted in the report for the third quarter of 2024. For instance, the total revenue reported was $4.11 billion, showing an increase of 3.1% from the third quarter of 2023. The second most rewarding factor is its four-year collective agreements with Unifor, representing about 3,300 Canadian employees in various positions, which were ratified on December 22, 2024. The agreements include annual wage increases of 3% and will remain in effect until December 31, 2028.
Overall, CNI ranks 7th on our list of Billionaire Chris Hohn’s top stock picks. While we acknowledge the potential of CNI as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a stock that is more promising than CNI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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