We track quarterly 13F filings from hundreds of hedge funds and other notable investors as part of our work researching investment strategies; we have found, for example, that the most popular small cap stocks among hedge funds outperform the S&P 500 by an average of 18 percentage points per year. We also like to screen filings from individual funds according to a number of criteria, including low earnings multiples. By looking for these “cheap” stocks, we can help investors identify targets for further research which may be good value stocks. Read on for our quick take on the five largest holdings in billionaire Michael Price’s MFP Investors’ portfolio as of the end of March with both trailing and forward P/Es of 13 or lower (or see the full list of Price’s stock picks).
The fund reported a position of 1.8 million shares in Intel Corporation (NASDAQ:INTC) in the filing. Intel Corporation (NASDAQ:INTC) is valued at 12 times earnings, whether we consider its trailing results or analyst consensus for 2014. If the company does manage to keep its earnings stable over the next year and a half, that would be an improvement on its recent growth rates: revenue slipped last quarter compared to the first quarter of 2012, pushing net income down by 25%. At current prices and dividend levels Intel’s annual yield is 3.7% so it is a potential income stock as well.
Price was one of the fund managers getting into Hess Corp. (NYSE:HES) between January and March, as the oil and gas company plans to spin out its non-upstream operations in order to become more focused on exploration and production activities. It currently trades at 11 times forward earnings estimates. That represents a premium to some larger oil and gas companies, but is certainly low in absolute terms and the breakup of Hess Corp. (NYSE:HES) does have some potential to create shareholder value as management becomes better able to focus on core operations.
MFP trimmed its stake in Symetra Financial Corporation (NYSE:SYA), a $2.2 billion market cap life insurance company, by 17% during the first quarter of the year but still closed March with 1.5 million shares in its portfolio. Symetra Financial Corporation (NYSE:SYA) is valued at a considerable discount to the book value of its equity (the P/B ratio is 0.6) and its earnings multiples are low as well. However, the company’s margins have been shrinking and as a result earnings declined by over 10% in its most recent quarter compared to the same period in the previous year despite higher sales.