Billion-Dollar Hedge Fund’s Best Stock Picks Include Coinstar, Inc. (CSTR), Assured Guaranty Ltd. (AGO)

In third place we have Live Nation Entertainment, Inc. (NYSE:LYV), which is the fifth largest position in Fine’s stock portfolio. As its name suggests, Live Nation is a live concert company, which focuses on both boutique and large-scale events, with a part-ownership in the House of Blues chain. The sell-side expects Live Nation to experience accelerating EPS growth over the next half-decade, with particularly strong growth over the next two years. With a forward P/E in excess of 300x, though, these prospects may be already baked into the stock, so to speak. It may be wiser to wait for a more attractive entry point.

One spot after Live Nation in Fine’s portfolio lays PolyOne Corporation (NYSE:POL), another small-cap stock. PolyOne operates in one of the most dependable segments around—polymer materials and additives—and has also seen remarkable appreciation over the past 12 months, gaining 67%. A dividend yield below 1% isn’t outstanding, but a sales multiple below 0.7x still indicates there’s some value to be had. PolyOne is coming off four consecutive quarterly earnings beats, and reports its Q4 (FY2012) financials on January 29th; we’ll be watching closely.

Debra Fine’s fifth favorite small-cap stock is Hornbeck Offshore Services, Inc. (NYSE:HOS), sitting at the No. 7 spot in her portfolio. Hornbeck provides water-based support to offshore oil and gas companies, and has lost close to 10% over the past six months. Generally speaking, a more bullish onshore energy environment—particularly in the U.S.—has given the bears a reason to sell anything deepwater-related.

Still, over the longer term, Hornbeck is expected to generate annual earnings growth of about 25% through 2017. Recent uncertainties have pushed the stock down to 16 times forward earnings, so there are reasons for investors to consider buying in.

For more related coverage, continue reading here:

Here’s How One Hedge Fund Lost Twelve Million Dollars

The Terrible 20: Underperforming Stocks with High Short Interest

Why Does Billionaire Louis Bacon Love AGO?

Disclosure: I have no positions in any of the stocks mentioned in this article