Billionaire Stanley Druckenmiller’s New Stock Picks Include AIG

Johnson & Johnson (NYSE:JNJ) was another of Druckenmiller’s new picks with the filing reporting a position of about 720,000 shares. At a beta of 0.5 and a dividend yield of over 3%, the personal products company is often used as an income or defensive stock. Johnson & Johnson’s sales were up 8% in the fourth quarter of 2012 versus a year earlier. The stock does trade at 20 times trailing earnings, and so would be of questionable value at these prices. Fisher Asset Management, managed by billionaire Ken Fisher, owned over 10 million shares of Johnson & Johnson (check out Fisher’s stock picks).

Another high-yield stock Druckenmiller added to his portfolio was $39 billion market cap electric utility The Southern Company (NYSE:SO). The dividend yield at Southern is over 4%, and as might be expected for a utility it has nearly no exposure to the broader economy with a beta of 0.1. Of course, the flip side to being a utility is that growth is low and with earnings multiples in the teens investors who are coming more from a value background might not be as interested as income investors. That market could be well served to look at Southern along with other large-cap utilities.

Druckenmiller bought 2.8 million shares of Cemex SAB de CV (NYSE:CX), an $11 billion market cap cement company. Because cement demand is tied to construction Cemex’s stock is sensitive to market indices with a beta of 2.6, meaning that these new stock picks tend to cluster towards those with strong or weak relationships to the economy rather than those in the middle. Cemex is expected to be narrowly unprofitable this year and analyst consensus for 2014 does not make the current valuation look attractive either with a forward P/E of 43.

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