David Blood and Al Gore’s Top Picks Include QUALCOMM, Inc. (QCOM)

The fund was buying shares of medical device company Becton, Becton, Dickinson and Co. (NYSE:BDX) in the first quarter of 2013 for a total of 3.8 million shares. The stock trades at 16 times forward earnings estimates, so here too Generation is depending on the company producing significant earnings growth going forward. However, business was about flat in its most recent quarterly report compared to the same period in the previous fiscal year with net income down slightly. Citadel Investment Group owned 1.6 million shares; that fund is managed by billionaire Ken Griffin (research more stocks Citadel owns).

$8.8 billion market cap laboratory instruments company Waters Corporation (NYSE:WAT) was another of Generation’s top picks with the filing disclosing ownership of 3.4 million shares. The stock is valued at 18 times its earnings, whether we compare that valuation to trailing results or to what the sell-side is expecting Waters to earn next year. Earnings have been up strongly, but it looks to be a short-lived increase as sales numbers have only barely risen (and as with Danaher, net income growth derived entirely from margins is likely unsustainable). Cantillon Capital Management reported a position of 1.1 million shares according to our database.

According to the 13F, Blood and his team increased their stake in QUALCOMM, Inc. (NASDAQ:QCOM) by 53% between January and March. As with many of the companies we’ve discussed here, QUALCOMM, Inc. (NASDAQ:QCOM) features a trailing earnings multiple in the high teens; however, both revenue and income from continuing operations were up about 20% in its last quarterly report from their levels a year ago. Analysts expect high growth to continue, with the result being a five-year PEG ratio of 0.7. Billionaire Stephen Mandel’s Lone Pine Capital disclosed ownership of 8.3 million shares (see more stock picks from Lone Pine Capital).

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