Billionaire Louis Bacon’s Cheap Stock Picks Include JPMorgan Chase

Page 1 of 2

We track 13F filings from hedge funds and other notable investors for a number of reasons. For one, we work on researching investment strategies based on the included information: even with the inherent delay that comes from using 13F filings, the most popular small cap stocks among hedge funds generate an excess return of 18 percentage points per year on average (read more about imitating hedge funds’ small cap picks) and we think other strategies are possible as well. A second way to use 13Fs is similarly to a stock screen: simply pull a top investor’s 13F and see which stocks are their top picks. We can also combine ownership with quantitative metrics including P/E multiples to narrow a list of recommendations for future research further. Here are five stocks which billionaire Louis Bacon’s Moore Global (see Bacon’s stock picks) owned at the end of December and which have both trailing and forward P/Es less than 12:

The fund’s top pick in this valuation category was JPMorgan Chase & Co. (NYSE:JPM) with a position of 5.1 million shares. JPMorgan Chase was one of the most popular financial stocks among hedge funds in the fourth quarter of 2012 (find more financial stocks hedge funds loved). It does look like a good value in earnings terms, with a trailing P/E of 10; in addition, the stock is priced almost exactly at the book value of its equity. JPMorgan Chase’s business has also been doing quite well, with revenue up 19% and earnings up 53% in its most recent quarter compared to the same period in the previous year.

MOORE GLOBAL INVESTMENTSAnother big bank Moore liked was Wells Fargo & Co (NYSE:WFC). Wells Fargo is, of course, Warren Buffett’s favorite financial stock with Berkshire Hathaway owning $15 billion worth of the stock at the end of December (check out Buffett’s favorite stocks). In earnings terms, the bank is priced at a small premium to JPMorgan Chase with (for example) a trailing earnings multiple of 11. This is due to a better return on assets, since Wells Fargo’s P/B ratio is well above parity at 1.3. With its safer reputation and better income-statement performance it might be worth this book premium to other banks.

Here are three more stocks the fund owned:

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

On the Move: The 10 Fastest Growing Businesses in 2015

Fast Money: The 10 Highest Paying Fast Food Restaurants

Mixing It Up: The 14 Best Music Mashups of 2014

Rito Pls Buff: The 10 Least Played Champions in LoL Season 4

10 Covers of Popular Songs that are Better than the Originals

Must See TV: The 9 Most Anticipated Shows of 2015

The 15 Biggest Box Office Bombs of All Time

10 Things The World Can’t Stand About Americans

Picture Perfect: The 6 Smartphones with the Best Cameras

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!