Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

ABT, VLO, TGT, MET, AEP: 5 Industry-Driven Bets This Billionaire is Banking On

Page 1 of 2

MILLENNIUM MANAGEMENTBillionaire Israel Englander founded Millennium Management in 1989 and prior to that, obtained his undergraduate degree from NYU. Englander later dropped out of his MBA program to trade on the AMEX and now manages roughly $13 billion in assets. His strategy utilizes a variety of trading strategies, with the bulk focused on industry-specific long/short positions. Englander’s emphasis is on fleeting anomalies in the financial markets, and he usually steers clear of directional bets. We believe that Englander was not necessarily looking at these five stocks for their intriguing dividend, but he did find a few industry-driven bets that pay solid dividend yields (check out Englander’s newest picks).

Abbott Laboratories (NYSE:ABT) is Englander’s 12th largest 13F holding and pays a 3.1% dividend yield. Abbott has plans to spin off its research and development segment in 2013, with the new company expected to generate nearly half of its sales from Humira. Sales for the remaining Abbott operations are expected to rise 5% in 2013 and the two separate companies are expected to see higher share prices due to multiples expansion, due to the ability to focus on central operations.

The dividend for Abbott post-spinoff is expected to be 56 cents annually, while the new R&D company will pay $1.60 per share annually. Compared to other top pharma companies, Abbott continues to trade on the cheap side at only 16x earnings, versus Pfizer (21x) and Merck (20x). Abbott and its major peers have been performing well over the past year as an aging population continues to boost drug demand. The stock was also a big-time play of billionaire Ken Griffin – founder of Citadel Investment Group – during the third quarter (see Ken Griffin’s top picks).

Valero Energy Corporation (NYSE:VLO) is an oil and gas company that makes up Englander’s 9th largest 13F holding and pays a 2.2% dividend yield. Valero’s refining segment is performing strongly this year, with its latest output averaging 2.7 million barrels per day, up 15% from the same quarter last year. The oil/gas company’s interim strength should come from strong distillate demand and increasing returns on CapEx spending – CapEx is expected to be $3.6 billion by the end of this year, up from $3.0 billion in 2011.

Part of what should drive Valero’s strength is a rise in oil prices on the back of increased demand for fossil fuels. Valero is also quite the value play, trading below the industry on a trailing P/E basis at 16x, at an even greater discount in terms of its forward P/E (6x). T. Boone Pickens had Valero as one of his latest stock picks (check out T. Boone Pickens’ newest picks).

Target Corporation (NYSE:TGT) is the 18th largest holding in Englander’s 13F portfolio, and pays a 2.3% dividend yield. Same store sales for the retailer are expected to be strong in fiscal year 2013, as a 3-4% growth will be driven by a store-remodeling program aimed at providing customers with fresh foods. One other key initiatives for Target are its planned expansion into the Canadian market place.

Target trades in lockstep with its top competitor Wal-Mart on a P/E, P/S and a dividend yield basis. What sets Target apart is its long-term growth rate, which is 2 percentage points above Wal-Mart. Both retailers should see solid growth over the interim due to their breadth of consumer staple product offerings.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!