Billionaire Steve Cohen’s Most Promising Stock Picks

Page 1 of 2

Small-cap and mid-cap stocks don’t get as much attention from bankers, third-party analysts, and the media, which often leaves them less efficiently priced than large- and mega-caps. Hedge funds sometimes take advantage of this by dedicating their research teams to work on these lower-valuation stocks as well, and so often earn substantial alpha from their investments. Retail investors can use smaller-cap stocks that hedge funds reported owning as a list of suggestions which may result in outperformance; we’ve determined that the most popular small-cap stocks among hedge funds can earn about 120 basis points of alpha per month (learn more about our hedge fund small cap strategy). Investors can’t buy every single small-cap stock that any hedge fund likes and so it probably works best to review each pick in search of those with the best potential. Here are five stocks which billionaire Steve Cohen’s SAC Capital Advisors reported owning on its most recent 13F (see the full list of Cohen’s stock picks) with market capitalizations between $1 billion and $5 billion:

Branded and generic drug manufacturer Endo Health Solutions Inc (NASDAQ:ENDP) was SAC’s top pick in that range with the fund reporting a position of 4.6 million shares. The stock price is down 27% in the last year, but sell-side analysts are confident that the company will deliver high earnings in 2013. D.E. Shaw, a large hedge fund managed by David Shaw, also had a large position in Endo at the end of the third quarter (check out more stocks D.E. Shaw liked).

Steven CohenSAC also liked Superior Energy Services, Inc. (NYSE:SPN), with its position of 6.2 million shares at the end of September being much larger than three months earlier. Read more about Superior. Superior is an oilfield equipment and services company which most notably provides services related to offshore drilling. It currently trades at 10 times earnings, whether we consider trailing results or consensus for this year, and its five-year PEG ratio is 0.5 as analysts expect considerable earnings growth over the next several years. We think it has at least some upside potential and could be a good value stock.

Three more stocks SAC owned:

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!