Billionaire David Tepper’s High Upside Potential Picks Include Apple Inc. (AAPL)

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The Goodyear Tire & Rubber Company (NYSE:GT) was another of Appaloosa’s stock picks. The trailing earnings multiple is not particularly low here, but analysts are likely expecting that an improvement in conditions for the auto industry will benefit Goodyear: the stock’s beta is 2.1. The company is highly levered and there have been concerns about its pension funding, so good times may be more crucial here than at the automakers themselves. Billionaire Steve Cohen’s SAC Capital Advisors was adding shares between October and December and closed 2012 with 6.9 million shares in its portfolio (find Cohen’s favorite stocks).

The fund included US Airways as well as United Continental in its bullish take on the airline industry, with the filing disclosing ownership of over 12 million shares of the former company. US Airways does have to contend with the integration risk as well as the potential benefits of consolidation (and the common claim that the combined company will be able to realize synergies) and does carry low P/Es on both a trailing and a forward basis. Billionaire Stanley Druckenmiller initiated a position of 4 million shares in US Airways during the fourth quarter (check out more stocks Druckenmiller was buying).

Tepper and his team were among the many value investors with a stake in General Motors Company (NYSE:GM). Greenlight Capital’s billionaire manager David Einhorn has been optimistic about GM’s prospects in both Europe and the U.S. as well as in developing markets, and the fund had GM as one of its top picks at the beginning of January (research more stocks Einhorn likes). Currently GM trades at 10 times trailing earnings, indicating that the market expects the company to struggle for quite some time. Analyst expectations imply a forward P/E of 7 and a five-year PEG ratio of 0.5.

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

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