Billionaire Ken Fisher Likes Apple Inc. (AAPL), Cisco, and More Cheap Stocks

The most popular stock among hedge funds, Apple Inc. (NASDAQ:AAPL) (find the rest of the top ten), was another of Fisher’s favorites. The recent decline in the stock has placed Apple at only 12 times trailing earnings, even though at least in recent quarters its growth rates has been good and despite competition from Google and Amazon it has a strong position in growing consumer technology markets. Even though we’re not as bullish as the analyst consensus- the five-year PEG ratio is 0.5- we still think that Apple qualifies as a value stock.

Fisher reported owning almost 19 million shares of Wells Fargo & Company (NYSE:WFC), which was another stock on the top ten list. Wells Fargo may trade at a premium to the book value of its equity- the P/B ratio is 1.2- at a time when many other large banks are priced at a discount, but it has gotten a good enough return on these assets that the trailing P/E is only 10. In addition, Warren Buffett has been buying even more shares of the bank (see Warren Buffett’s favorite stocks). We’re not sure that Wells Fargo is the best buy of the bank stocks, but we certainly wouldn’t be short it anymore either.

JPMorgan Chase & Co. (NYSE:JPM) joined Wells Fargo in the portfolio; Fisher more than doubled its stake to over 13 million shares. As we mentioned, a number of large banks are currently valued at less than book: JPMorgan Chase is one of these, with a P/B ratio of 0.9. It’s also cheaper than Wells Fargo in terms of P/E multiples, with a trailing P/E of 9. Billionaire Louis Bacon’s Moore Global Investments initiated a position in the stock during the third quarter (check out more stock picks from Louis Bacon). We think that, especially with earnings rising, JPMorgan Chase offers a good blend of value and stability, and is more attractive than Wells Fargo or other industry peers.