Top Investors Are Buying These 3 TSX Stocks Hand Over Fist

Billionaire investors are buying Brookfield Asset Management (TSX:BAM) shares hand over fist.

| More on:
Utility, wind power

Image source: Getty Images

Did you know that some of the world’s best investors are buying Canadian stocks hand over fist?

Yes, it’s true.

From billionaire shareholders to hedge fund managers, many ‘super investors’ are into Canadian stocks.

In this article, I will explore three of the TSX stocks billionaires are buying, starting with a familiar name.

CN Railway

The Canadian National Railway (TSX:CNR) is a Canadian railroad stock owned by Bill Gates’ investment firm Cascade Investment. Cascade is managed on behalf of Gates by Michael Larson.

Why does Larson like CNR stock so much?

One thing he might like about it is the fact that it has an “economic moat.” An economic moat is a durable competitive advantage that makes a company vital and necessary to its customers. In CNR’s case, that “moat” is its vast rail network. CN Railway is the only North American railway that touches three coasts. This access gives it advantages in long-distance shipping (particularly shipping routes that go from Western Canada to the Southeastern United States). As a result, CN Railway is unlikely to be replaced or undercut by a competitor any time soon.

Brookfield

Brookfield (TSX:BN) is a company that was created when Brookfield Asset Management (TSX:BAM) was restructured. Brookfield was owned by top value investor Mohnish Pabrai before it was spun off.

The situation with Brookfield and Brookfield Asset Management is somewhat difficult to explain. At one point, both of these companies were a single company called ‘Brookfield Asset Management.’ This company included an asset management business and various interests in other companies. Earlier this month, BAM spun off its asset management business, which retained the ticker symbol ‘BAM,’ while the parent company gained a new ticker symbol, ‘BN.’

Brookfield has a number of holdings in different investment funds, as well as some direct ownership stakes in businesses. It has grown its portfolio value by about 16% per year over the last decade. It is owned by value investors like Pabrai, and even has legendary bond investor Howard Marks on its team. Going purely by the track records of the people who own it and work for it, Brookfield looks like a winner.

Canadian Pacific Railway

Canadian Pacific Railway (TSX:CP) is another Canadian railroad stock with a major billionaire backer: Bill Ackman.

Ackman won a shareholder battle to replace CP’s CEO with a new executive, Hunter Harrison, who helped the railroad achieve better operating efficiency. In the decade since Harrison took over, CP has grown its revenue by 4% per year, net income by 15% per year, and book value by 22% per year. Today, CP is a little pricey, trading at 27 times earnings and 10.1 times sales. However, it’s still a great company.

Foolish takeaway

Canadian markets may not get as much press as their American counterparts, but that doesn’t mean they’re without big fans. In addition to the ‘super investors’ who own the stocks above, there’s also Warren Buffett, who has intermittently owned Suncor Energy and other Canadian names. Billionaire endorsement does not automatically mean that the stocks named above are slam-dunk buys, but it does suggest that Canada is a market worth being in.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield, Brookfield Asset Management, Brookfield Corporation, Canadian National Railway, and Canadian Pacific Railway. The Motley Fool has a disclosure policy.

More on Investing

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

Boost Your Passive Income: 2 Canadian High-Yielders at a Bargain

Nutrien (TSX:NTR) stock and another play that appear like fantastic dividend bargains in mid-November.

Read more »

Super sized rock trucks take a load of platinum rich rock into the crusher.
Metals and Mining Stocks

Invest $7,000 in This Dividend Stock for $672 in Passive Income

High yield can be an essential requirement when you need to start even a modestly sized passive income with a…

Read more »

telehealth stocks
Tech Stocks

Well Health Stock: Buy, Sell, or Hold?

Another record-breaking quarter and strong demand sets the stage for continued momentum for Well Health stock.

Read more »

3 colorful arrows racing straight up on a black background.
Dividend Stocks

TSX Stocks Soaring Higher With No Signs of Slowing

Three TSX stocks continue to beat the market and could soar higher in an improving investment landscape.

Read more »