Hedge Fund Levin Capital Strategies’ Stock Picks for 2013

JPMorgan Chase & Co. (NYSE:JPM), which was one of the most popular stocks among hedge funds in the third quarter of 2012 (see the full top ten list), was another of Levin’s favorite stocks in Q4. The fund entered 2013 with 4.6 million shares of the megabank in its portfolio. We like the combination of value and stability that JPMorgan Chase offers: even with its decent reputation compared to banks such as Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) it still trades at a small discount to the book value of its equity and at 9 times forward earnings estimates; that forward P/E is in line with how those peers are valued.

Levin upped its stake in Medtronic, Inc. (NYSE:MDT) from about 3 million shares at the beginning of October to 4.4 million shares at the end of December. In Medtronic’s most recent quarterly report, for the quarter ending in October, net income was down 26% from a year earlier and revenue growth, while positive, was only modest. While the earnings multiples are low for a large-cap company- the trailing P/E is 14, for example- we don’t like the company’s recent performance and would avoid it for now. Diamond Hill Capital, managed by Ric Dillon, is another major Medtronic shareholder (research more stocks Diamond Hill owns).

Macy’s, Inc. (NYSE:M) rounded out Levin’s five largest 13F holdings. The department store has actually been reporting decent numbers recently, and is a candidate for value status with trailing and forward P/Es of 12 and 11 respectively. Analyst expectations imply a five-year PEG ratio of 0.9. We don’t particularly like the industry but the value metrics look good and the company’s performance appears acceptable. Lee Ainslie’s Maverick Capital initiated a position of 5.7 million shares in Macy’s during Q3 2012 (find more stocks Ainslie was buying).

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

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
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

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!