Billionaire Steve Cohen’s Favorite Small Cap Stocks Include Carter’s, Inc. (CRI)

The fund reported a position of 2.6 million shares in Visteon Corp (NYSE:VC), an auto parts company specializing in climate, electronic, and interior components. Once again, the financial community is looking for growth here (as is the case with many other auto related companies); Visteon Corp (NYSE:VC)’s trailing and forward earnings multiples are 17 and 12 respectively. Sales have been up, going by the company’s recent reports, but not at a particularly high rate. We’re not sure that Visteon Corp (NYSE:VC) is the most attractive source of potential value among auto related companies, and would suggest looking at its peers instead. JANA Partners, managed by Barry Rosenstein, was another major shareholder in the company (check out Rosenstein’s stock picks).

Cohen and his team nearly tripled their stake in Carter’s, Inc. (NYSE:CRI), the $4.1 billion market cap children’s apparel company (its brands include OshKosh). In the first quarter of 2013, Carter’s, Inc. (NYSE:CRI) experienced a 28% increase in net income though this came primarily from higher margins as revenue was up only 7%. With the stock valued at 18 times forward earnings estimates, it looks to us that it might be about fairly valued- growth rates will likely have to increase in order for it to prove undervalued at this price. Billionaire Andreas Halvorsen’s Viking Global owned 3.4 million shares of Carter’s, Inc. (NYSE:CRI) at the end of the quarter (find Halvorsen’s favorite stocks).

According to the 13F, SAC was buying shares of RenaissanceRe Holdings Ltd. (NYSE:RNR) between January and March, closing the quarter with 1.4 million shares in its portfolio. RenaissanceRe Holdings Ltd. (NYSE:RNR), which provides reinsurance coverage, is more of a traditional value stocks with both its trailing and forward P/Es under 10. However, revenue and earnings were both down modestly in its most recent quarter compared to the same period in the previous year. The company does have some potential if it can slow its decline, and RenaissanceRe is also a defensive name with a beta of 0.4.

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