Agrium, Chevron, and More: Billionaire Richard Chilton’s Cheap Stock Picks

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CHILTON INVESTMENT COMPANYRichard Chilton founded Chilton Investment Company in 1992 and has since become a billionaire as the fund’s fundamental value-oriented investment strategy has produced good returns. The fund recently filed its 13F for the third quarter of 2012; this filing discusses many of Chilton’s long equity positions (see Chilton’s stock picks). We thought it might be interesting to look at some of the low-multiple stocks in the fund’s portfolio and see if they are worthy of further research. Here is our quick take on Chilton’s five largest holdings by market value in stocks with trailing and forward P/E multiples of 12 or lower:

Agrium Inc. (NYSE:AGU) was one of Chilton’s five largest holdings with the fund owning about 890,000 shares, and trades at 12 times trailing earnings. Agrium is a wholesaler and retailer of fertilizers and other agricultural products, and JANA Partners (a value hedge fund managed by Barry Rosenstein) has been buying up shares in the company and encouraging management to split the business in two to create more shareholder value. Find out more about JANA and Agrium. Net income was down 57% in the third quarter compared to the same period in 2011, but the stock is up strongly as the market expects higher demand for agriculture products as the demand for food increases.

Chilton also liked Corning Incorporated (NYSE:GLW), reporting a position of 6.8 million shares. Corning provides products including specialized glass displays and optical fiber, and has a market capitalization of $18 billion. This places its valuation at 10 times trailing earnings. Its business has also been performing poorly recently- last quarter its earnings were down 36% versus a year earlier- but Wall Street analysts expect the company to rebound and get steady growth over the next several years. The forward P/E multiple is 9, and the five-year PEG is 0.8. As a result we think that the company is well worth considering on a value basis.

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