Akre Capital Management’s Stock Picks for 2013 Include Mastercard

The fund also liked Moody’s Corporation (NYSE:MCO), adding shares over the course of the fourth quarter of the year. Warren Buffett’s Berkshire Hathaway had over $1 billion invested in Moody’s at the end of September (find Buffett’s favorite stocks). Moody’s trades at 15 times trailing earnings, and has been experiencing strong growth; analyst estimates for the next several years imply a five-year PEG ratio of 0.9. With the stock not particularly expensive and performance strong it might be worth considering.

Ross Stores, Inc. (NASDAQ:ROST) was another of Akre’s top picks as the fund owned 1.9 million shares at the beginning of January. Revenue and earnings were both up 11% in Ross’s most recent quarterly report (for the fiscal quarter ending in October) versus a year earlier, a good sign for the discount apparel store. Some future growth is already priced in- the trailing P/E is 18- but it could be a candidate for a “growth at a reasonable price” stock. Renaissance Technologies, founded by billionaire Jim Simons, had a large position in Ross Stores at the end of the third quarter (research more stocks Renaissance liked).

Akre reported owning about 230,000 shares of Markel Corporation (NYSE:MKL). The insurance company’s earnings multiples are close to 20 as the financial community is generally skeptical of the impending acquisition of Alterra Capital Holdings Ltd (NASDAQ:ALTE); however, we have noticed a streak of insider purchases at Markel over the past few months (see a history of insider purchases at Markel). Net income has been up and the P/B ratio reflects a moderate premium to the book value of Markel’s equity. Markel’s chief investment officer, Tom Gayner, spoke with us earlier this year about his investment process and other topics (read our exclusive interview with Tom Gayner).

Disclosure: I own no shares of any stocks mentioned in this article.

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