Billionaire Steve Cohen’s High Upside Potential Picks Include Michael Kors Holdings Ltd (KORS)

Auto parts manufacturer Visteon Corp (NYSE:VC) was another of Cohen’s high upside potential picks; his fund owned 2.6 million shares per the filing, and the five-year PEG ratio is 0.8. This is due to general analyst optimism on many auto related industries- with a trailing P/E of 17, Visteon is certainly not a pure value play. While many bulls argue that U.S. consumers will soon have to buy new cars to replace an aging auto fleet, we just don’t think recent numbers have been good enough to recommend buying the stock.

According to the 13F, SAC increased its stake in offshore driller Transocean LTD (NYSE:RIG) to a total of 2.6 million shares by the end of Q1.Transocean is another stock where analysts are more optimistic than the market: consensus forecasts for next year imply a forward P/E of only 8, though those forecasts do include an expectation of considerably higher earnings per share in 2014 than for this year. Billionaire activist Carl Icahn has been pushing the company to return more cash to shareholders, which could result in a competitive yield for the stock.

Transocean does seem like an interesting company, but given how strongly its value status depends on improving its earnings while recent performance has not been so strong we think it is best placed on a watchlist for now. GNC and Michael Kors look interesting, in that while both have moderate to high earnings multiples they at least currently join those characteristics with enough earnings growth that the stocks could be quite appealing if those trends continue. We think either of the two could be worthy of further research.

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