Billionaire investor Bill Ackman's Pershing Square Capital Management has allocated nearly 13% of its portfolio to Uber Technologies. Ackman is bullish on Uber based on projections that the company's earnings per share will grow at a compound annual rate of 25% over the next three to five years. Combined with potential valuation multiple expansion and Uber's current discounted forward P/E ratio of 15.9, analysts believe the stock could more than triple in five years.
Axe note: Bill Ackman’s large Uber stake shows confidence in rapid earnings growth, but South African investors should tread carefully.