Corvex Management CEO Keith Meister recommended shares of CenturyLink on Monday.
"CenturyLink is acquiring Level 3 and the acquisition is truly transformative," the hedge fund manager said. "The Level 3 merger is game changing. It secures CenturyLink's dividend for the long term."
The idea from the former CEO of Icahn Enterprises was presented at the Sohn Investment Conference in New York. Meister founded Corvex in 2010.
The investor estimated the combined company will generate $10 billion of annual EBITDA and $3 billion of free cash flow. Meister sees 40 percent upside in the shares.
It is "cheap on both absolute and relative basis. It represents an improving story," the hedge fund manager said.
CenturyLink shares jumped by more than 2 percent after Meister's recommendation Monday. Shareholders approved the $34 billion
"It is our biggest position today," the investor concluded.