Bill Gates, known globally for his role in founding Microsoft (NASDAQ:MSFT), currently holds the ninth spot on the Forbes real-time billionaires list with a net worth of $132.9 billion. Over the years, Gates has significantly diversified his investments beyond Microsoft, channeling funds into various sectors through entities like Strategic Investments and Cascade Investments. This diversification strategy is aimed at facilitating philanthropic endeavors and securing financial stability.
In recent years, Gates has focused on a variety of investments, a notable one being Waste Management (WM). This company, offering waste collection, disposal, and recycling services across North America, has shown robust performance, benefiting from strategic acquisitions. Its latest quarterly results indicated a revenue growth of 5.5% to $5.4 billion, showcasing resilience in a volatile market. Another significant investment is Canadian National Railway (CNI), which despite recent dips, remains a strong long-term bet due to its defensive business model and favorable financial conditions. Caterpillar (CAT) also features prominently in Gates’ portfolio, bolstered by strong demand for its machinery and positive impacts from federal infrastructure spending.
Waste Management (WM)
Waste Management stands out in Gates’ portfolio due to its solid performance in uncertain times. The company provides essential waste collection, disposal, and recycling services across North America. Waste Management’s strategic acquisitions, such as the $7.2 billion purchase of Stericycle, are expected to enhance cash flow significantly. Recent financial results revealed a 5.5% increase in revenue, amounting to $5.4 billion, and a record EBITDA margin of 30%. The company continues to focus on core initiatives to boost margins and service quality, leveraging its extensive assets and digital platforms to maintain a competitive edge.
Canadian National Railway (CNI)
Canadian National Railway remains a top investment for Bill Gates, favored for its defensive business model. The company has shown resilience despite declining freight volumes and higher interest rates, with earnings per share (EPS) rising by 15% year-over-year. In the second quarter of 2024, CN Railway reported a 7% revenue increase and projects further EPS growth of 10% to 15% through 2026. This performance underscores the company’s strong pricing power and its potential as a long-term investment.
Caterpillar’s recent stock performance reflects its robust position in the construction, mining, energy, and transportation sectors. The company’s profits have surged due to sustained demand and higher pricing for its machinery, driven by federal infrastructure spending. Although Caterpillar’s mixed Q2 results showed lower-than-expected revenue, strong EPS figures exceeded projections. The company anticipates a slight dip in 2024 revenue compared to 2023 but expects higher operating margins, suggesting continued financial strength.
Overall, Bill Gates’ diversified investment strategy through entities like Strategic Investments and Cascade Investments highlights a focus on long-term growth and stability. Waste Management, Canadian National Railway, and Caterpillar are prime examples of his strategic choices, each showing resilience and potential for future growth. These investments not only enhance Gates’ financial portfolio but also align with his broader goals of sustainability and economic stability through diversified holdings.
