Billionaire Steve Cohen’s High Upside Potential Stock Picks Include Apple Inc. (AAPL)

Page 1 of 2

Steven CohenBillionaire Steve Cohen and his hedge fund SAC Capital Advisors have been in the news recently as the government investigates related hedge funds for suspicious trading activity. The fund’s success, despite its large size (SAC recently had $14 billion under management), has made it followed by many in the financial community. We have gone through the fund’s most recent 13F filing (see Cohen’s stock picks) and identified some stocks which have high upside potential, as measured by having a low PEG ratio (which is determined by the P/E multiple and forecasted earnings growth rates). Earnings projections aren’t always accurate, but they can at least offer a quantitative measure of a company’s potential. Here are five stocks which SAC reported owning at the end of the third quarter with low PEG ratios:

The hedge fund moved heavily into $14 billion market cap oil and gas company EnCana Corporation (NYSE:ECA), with its position of 5.3 million shares being much larger than what SAC had owned at the beginning of July. According to sell-side expectations, the PEG ratio is 0.4. Encana also pays a dividend yield of about 4%, and it might be worth taking a closer look at the company. Third Avenue Management, which is managed by Marty Whitman, owed 4.2 million shares according to that fund’s 13F (find more stocks Third Avenue owned).

Cohen and his team liked American International Group, Inc. (NYSE:AIG), increasing SAC’s stake to a total of 8.7 million shares. AIG’s P/B ratio is 0.5, representing quite a large discount to the book value of the insurer’s equity, and according to analyst expectations it is priced cheaply at a PEG ratio of 0.4. It is a good candidate for value status. Apparently a number of investors liked the stock last quarter: according to our database of 13F filings from hedge funds and other notable investors, AIG was the third most popular stock after not being in the top ten three months earlier. See the rest of the top ten stocks.

Apple Inc. (NASDAQ:AAPL) was another popular stock among hedge funds- the most popular, in fact- that SAC owned. Apple’s trailing P/E is only 12, which seems difficult to square with its recent high growth rates; even if earnings growth becomes more modest, it could be undervalued at that multiple. Billionaire David Shaw’s D.E. Shaw had over $1 billion invested in Apple Inc. (NASDAQ:AAPL) at the end of the quarter (check out D.E. Shaw’s favorite stocks). We would expect at least low growth from the company and so we would consider Apple Inc. (NASDAQ:AAPL) a buy.

Page 1 of 2
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 10 Largest Pharmaceutical Companies In the World

The 10 Most Expensive Android Apps

The 9 Most Expensive Designer Bags in the World

The 7 Most Expensive Real Estate in the World

The 10 Most Expensive eBay Items Ever Sold

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

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!