7. Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Holders as of Q3: 53
Pershing Square’s Equity Stake: $1.27 Billion
Pershing Square held roughly 14.9 million shares of Canadian Pacific Kansas City Limited (NYSE:CP) by the end of the third quarter of 2024 with no significant decrease in its Q2 holding of the stock. However, the value of the stock increased to $1.27 billion at the end of Q3 from just under $1.18 billion in Q2.
At the end of the third quarter of 2024, 53 hedge funds owned stocks in Canadian Pacific Kansas City Limited (NYSE:CP). Since only 45 funds had stakes in the company when the second quarter ended, it indicates a strong hedge fund sentiment about the company. Its Q3 revenue was announced to be $3.5 billion which demonstrated year-over-year growth of 6%.
Headquartered in Calgary, Canada, and founded in 2001, Canadian Pacific Kansas City Limited (NYSE:CP) provides rail freight transportation services to link Canada, the United States, and now across Mexico since its recent acquisition of Kansas City Southern in 2023. CP has grown significantly since then, as the acquisition allowed it to expand into a broader market and offer its services between the three biggest economies in the continent. Currently stretching roughly 20,000 miles in rail tracks and employing 20,000 railroad employees, the company boasts unrivaled access to major ports from Vancouver to Atlantic, Canada, and the Gulf of México to Lázaro Cárdenas, México. It offers a range of freight transportation services, logistics solutions, and supply chain expertise to North American customers.
As a result, in December 2024, Jefferies reiterated its Buy rating on shares of Canadian Pacific Kansas City Limited (NYSE:CP) and kept the firm’s price target consistent at $100.
Here is what Pershing Square Holdings said about Canadian Pacific Kansas City Limited (NYSE:CP) in its second quarter 2024 investor letter:
“Volume growth of 6% in the second quarter was well ahead of management’s expectations, driven by synergy wins and solid Canadian grain shipments. CPKC has made considerable progress on realizing revenue synergies despite a challenging freight environment, and now expects to exit 2024 with C$800 million of new business. These wins span a wide variety of end markets from automotive to corn, demonstrating the unique value proposition of CPKC’s network.
Cost synergies are also tracking ahead of plan as CPKC realizes savings from combining procurement and general and administrative functions. These cost savings together with strong operations across the network led to a 280 basis point year over-year improvement in CPKC’s adjusted operating ratio in the second quarter.
We believe that CPKC’s one-of-a-kind network and industry-leading management team are well positioned to deliver continued synergy wins and excellent operations, which should generate strong double-digit earnings growth in the coming years.”
