Billionaire Stanley Druckenmiller’s Low P/E Stock Picks Include Pfizer

Brazilian bank Itau Unibanco Holding SA (NYSE:ITUB) was another of Druckenmiller’s stock picks with the filing disclosing ownership of 1.6 million shares. At a market capitalization of $81 billion, Itau Unibanco trades at 12 times trailing earnings and 9 times analyst consensus for 2014. The stock price has fallen 16% in the last year, about in line with exchange-traded funds which track the Brazilian market. Some commodities have fallen in price in the last year, and combined with an increased perception of political risk it’s no surprise that Brazil and Itau Unibanco have been affected. Large hedge fund Arrowstreet Capital was another major holder of the stock.

Druckenmiller cut his stake in SunTrust Banks, Inc. (NYSE:STI) in half but this still left him with about 900,000 shares at the beginning of January. The bank is cheap in both book and earnings terms: it carries a substantial discount to the book value of its equity at a P/B ratio of 0.8 while the forward P/E is 10. This makes it somewhat competitive with larger banks on a value basis. Billionaire George Soros had 1.5 million shares in his portfolio at the end of the fourth quarter, though he had been reducing his position as well (research Soros’s favorite stocks).

Delta Air Lines, Inc. (NYSE:DAL) rounded out our list of Druckenmiller’s top five cheap picks; it was another stock that the billionaire had only started buying since the end of September. Capital Growth Management, managed by Ken Heebner, also initiated a position in Delta last quarter (see more stocks Heebner was buying). Delta stands to benefit from industry consolidation without having to concern itself with integration risk, and it trades at only 13 times trailing earnings. As a result it may not have as much upside as US Airways but should in turn have less of a downside as well.

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