Billionaire Steve Cohen’s Cheap Stock Picks Include Discover

Avago Technologies Ltd (NASDAQ:AVGO), an $8.4 billion market cap designer of semiconductor products, was another of Cohen’s stock picks with fairly low earnings multiples; the stock trades at trailing and forward P/Es of 15 and 12, respectively. Avago’s stock has sold off just a bit in the last year against a rising market, and revenue growth last quarter was fairly low versus a year earlier (though of course little growth is required at this pricing). Lee Ainslie’s Maverick Capital, even after cutting its stake, was the largest shareholder in our database of 13F filings.

Cohen and his team were buying oil major Occidental Petroleum Corporation (NYSE:OXY), closing December with 1.8 million shares in their portfolio. Occidental made our list of the most popular energy stocks among hedge funds for the fourth quarter of 2012 (check out more energy stocks hedge funds love). The stock trades at 15 times trailing earnings, which is actually higher than many of its peers, though net income is expected to improve to the point where the forward P/E is 11. That is certainly low in absolute terms though we would certainly explore Exxon Mobil Corporation (NYSE:XOM) and other oil majors as alternatives.

SAC had owned a small position in Discover Financial Services (NYSE:DFS) at the beginning of October but built it up to 3.4 million shares by the end of 2012. Discover is valued at 9 times trailing earnings, whether we look at trailing results or consensus for the fiscal year ending in November 2014. The financials actually look good as well with decent growth rates in net income entirely due to increasing revenue. Cliff Ansess’s AQR Capital Management roughly doubled the size of its own position in Discover (see more stocks AQR was buying).

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

Comments
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

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

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!