Billionaire Glenn Dubin’s High Upside Potential Picks Include Transocean LTD (RIG)

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Transocean LTD (NYSE:RIG) was another of Dubin’s high upside potential picks with the filing disclosing ownership of 2.9 million shares. Billionaire activist investor Carl Icahn has recently taken a relative large position in the deepwater drilling company, urging management to return more cash to shareholders (research more stocks Icahn owns). Currently, Transocean LTD (NYSE:RIG) trades at 8 times forward earnings estimates and with the sell-side expecting further growth on the bottom line going forward the stock’s five-year PEG ratio is 0.5. We’d be interested in comparing Transocean LTD (NYSE:RIG) to its peers in offshore drilling.

The fund had two equipment rental companies among its top ten picks, with 1.6 million shares of United Rentals, Inc. (NYSE:URI) in its portfolio at the beginning of April. As with Hertz, United Rentals is dependent on macro factors and carries a high beta (3.0 in this case). While the forward P/E is 9, a number of market players are bearish on the stock and as a result the most recent data shows that 16% of the float is held short. SAC Capital Advisors, managed by billionaire Steve Cohen, was buying United Rentals, Inc. (NYSE:URI) between January and March, closing Q1 with 1.1 million shares (check out Cohen’s stock picks).

Highbridge further showed its general market bullishness by increasing its stake in $2.3 billion market cap building materials company Louisiana-Pacific Corporation (NYSE:LPX) to a total of 2.7 million shares. The stock carries trailing and forward P/Es of 23 and 10, respectively, suggesting that it is dependent on higher demand for building materials resulting from a continued recovery in construction and homebuilding in particular. Revenue was up almost 50% in the first quarter of 2013 versus a year earlier. Billionaire Dan Loeb’s Third Point cut its holdings of Louisiana-Pacific Corporation (NYSE:LPX) by 40% during Q1, though the fund still owned 1.8 million shares (find Loeb’s favorite stocks).

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

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