In this article, we discuss the top 9 stock picks of billionaire Chris Hohn.
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).
Chris Hohn
Billionaire Chris Hohn’s Top 9 Stock Picks
9. Ferrovial SE (NASDAQ:FER)
Number of Hedge Fund Holders: 7
TCI Fund Management’s Stake: $820 million
Ferrovial SE (NASDAQ:FER) is a heavy infrastructure construction contractor that designs, constructs and maintains a range of projects, including roads, tunnels, highways, water treatment plants, maritime, hydroelectric plants, and railways. The first compelling factor that may hold potential for investment is the company’s operational efficiency, as EBIT margin shows an increase of 3.9% for the first nine months of 2024, depicted in the report of the third quarter of 2024. Secondly, Ferrovial and Interogo Holding, via its infrastructure investment fund Inter Infrastructure Capital (IIC), have created a joint venture vehicle (Umbrella Roads BV) to manage Ferrovial’s stakes in a number of road and parking concessions in Spain, Scotland, Ireland and Canada. The assets operate under availability payment schemes or have limited traffic risk. Moreover, Ferrovial has also been awarded three contracts to design and build the track infrastructure for the high-speed railway project HS2 in the UK.
8. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
TCI Fund Management’s Stake: $2.8 billion
Alphabet Inc. (NASDAQ:GOOGL) is a California-based technology company that owns and runs the internet search engine Google. The following aspects illustrate why the company stands out as an investment opportunity. Firstly, a strong momentum across the business is reflected in the report for the third quarter of 2024. For instance, consolidated revenues increased 15%, or 16%, in constant currency, year over year. Additionally, net income increased by 34%, and EPS increased by 37% to $2.12, which shows efficient cost management, driving greater returns for shareholders. Secondly, Google is teaming up with HP to integrate Project Starline with Google Meet and Zoom, with plans to launch the 3D video call platform in 2025. After refining the technology from a booth to a screen, Google is bringing Project Starline to the public to enhance the video conferencing experience. Moreover, Google Cloud, a division of Alphabet, has announced that the streaming giants Spotify and Paramount Global are now utilizing its newly developed Axion chip.
7. 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 the company 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.
6. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 165
TCI Fund Management’s Stake: $4.6 billion
Visa Inc. (NYSE:V) is a California-based payments technology firm. The first rewarding aspect that makes Visa a great investment choice is the exceptional financial results depicted in its final report of 2024. For instance, reported net revenue was $35.9 billion and GAAP earnings per share of $9.73, up 10% and 17% from the prior year, respectively. Visa’s total payments and cash volume were $16 trillion, and the Visa network processed 234 billion total transactions — 639 million transactions every day. Secondly, the company is integrating artificial intelligence (AI) into VAS offerings to help merchants and financial institutions prevent fraud and protect account holder data.
5. Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Holders: 52
TCI Fund Management’s Stake: $4.7 billion
Canadian Pacific Kansas City Limited (NYSE:CP) operates an extensive network spanning over 20,000 track miles, connecting more than 30 ports, 30 auto facilities, and numerous transload facilities and short lines across North America. Canadian Pacific Kansas City Limited (NYSE:CP) serves a diverse range of industries, including agriculture, energy, chemicals, automotive, and consumer goods. The company has featured in the TCI Fund portfolio since the second quarter of 2023. Back then, the stake consisted of nearly 55 million shares. This stake has remained constant since then, with only minor changes.
4. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 279
TCI Fund Management’s Stake: $5.2 billion
Microsoft Corporation (NASDAQ:MSFT) is a Washington-based technology company. These points showcase why the company is a strong contender for investment. The first and most compelling factor that makes Microsoft Corporation a great investment choice is an increase in operating income, showing improved profitability and operational efficiency depicted in the report for the third quarter of 2024. For instance, operating income calculated was $27.9 billion and increased 15% as compared to the prior year. Moreover, office commercial products and cloud services revenue increased 12% driven by Office 365 Commercial revenue growth of 13%, highlighting successful expansion in the cloud and subscription business, contributing to overall company growth. Secondly, Microsoft has announced a $3.3 billion investment in Wisconsin to spur artificial intelligence innovation and economic growth, which may hold investment potential. These investments include $3.3 billion in cloud computing and AI infrastructure, the creation of the country’s first manufacturing-focused AI co-innovation lab, and an AI skilling initiative to equip more than 100,000 of the state’s residents with essential AI skills.
3. S&P Global Inc. (NYSE:SPGI)
Number of Hedge Fund Holders: 85
TCI Fund Management’s Stake: $5.3 billion
S&P Global Inc. (NYSE:SPGI) provides credit ratings, benchmarks, analytics, and workflow solutions in the global capital, commodity, and automotive markets. The following attributes underline the company’s potential as an investment. The first thing that makes S&P Global a great investment opportunity is its robust financial growth depicted in the report for the third quarter of 2024. For instance, reported revenue was $3.57 billion, showing an increase of 16% compared to the third quarter of 2023. Third quarter GAAP net income increased 31% to $971 million, and GAAP diluted earnings per share increased 33% to $3.11 as higher net income was driven primarily by strong growth in Ratings and Indices. Secondly, the company has announced an agreement to acquire Visible Alpha, the financial technology provider of deep industry and segment consensus data, sell-side analyst models and analytics from high-quality, exclusive sources. The acquisition will create a premium offering of fundamental investment research capabilities on S&P Global Market Intelligence’s Capital IQ Pro platform. Moreover, the company has agreed to sell its Engineering Solutions business to investment funds managed by KKR for $975 million in cash, subject to customary purchase price adjustments.
2. Moody’s Corporation (NYSE:MCO)
Number of Hedge Fund Holders: 67
TCI Fund Management’s Stake: $6.2 billion
Moody’s Corporation (NYSE:MCO) operates as an integrated risk assessment firm worldwide. There are multiple compelling aspects that make Moody’s Corp a rewarding investment potential. First of all, the company showed incredible financial performance, as depicted in the third report of 2024. For instance, reported revenue was $1.81 billion, showing a 23% increase from the same period in 2023, driven by strong performances across both divisions. Additionally, the adjusted net income was $585 million, indicating efficient operations and business growth. Secondly, the company has announced a new strategic partnership agreement with MSCI to leverage each other’s strengths to bring greater transparency on ESG and sustainability to markets and power better decisions. Moody’s will leverage MSCI’s sustainability data and models, which are used by the world’s largest asset managers and asset owners. With access to MSCI data, Moody’s intends over time to migrate its existing ESG data and scores to offering MSCI’s sustainability content through a range of solutions serving Moody’s customers in the banking, insurance and corporate sectors.
1. GE Vernova Inc. (NYSE:GEV)
Number of Hedge Fund Holders: 89
TCI Fund Management’s Stake: $9 billion
GE Vernova Inc. (NYSE:GEV) is a high-tech industrial firm. These points showcase why the company is a strong contender for investment. Firstly, the report for the third quarter of 2024 showed great financial results, with demand driving orders up 28%. The company grew earnings by 25% and produced substantial free cash flow, both largely driven by services. The company also secured narrowbody wins as Avolon ordered 150 LEAP-1A engines to power 75 A320 aircraft and announced widebody commitments from EVA Air for GEnx engines to power four 787s and Qatar Airways for 40 GE9X engines to power 20 777s. Secondly, the company has reinstated dividends across its entities. GE Aerospace pays $0.28 per share, GE Vernova has announced a $0.25 per share dividend effective Q1 2025, and GE HealthCare initiated a $0.035 per share dividend.
While we acknowledge the potential of GE Vernova Inc. (NYSE:GEV) 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 timeframe. If you are looking for a stock that is more promising than GE Vernova Inc. (NYSE:GEV) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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