‘Hedge Hunter’ Roberto Mignone’s Favorite Investments: General Motors Company (GM), Morgan Stanley (MS), Google Inc (GOOG)

Page 1 of 2

Despite the fact that hedge funds are often viewed as slow and underperforming investment vehicles of the financial world of yesteryear, there are still ways to parse the data to beat the market. At Insider Monkey, we track the best picks of the best hedge funds, and we’ve used this dual-screening technique to help retail investors achieve stock market superstardom.

Our small-cap strategy outperformed the market by 18% a year for more than a decade, and since sharing these picks with the public last fall, we’ve outperformed the S&P 500 index by 22.5 percentage points in only 5.5 months. We’ve also built the Billionaire Hedge Fund Index in collaboration with MarketWatch, which was up on the general indices by the high-single-digits in 2012.

BRIDGER MANAGEMENTHere’s how to use this strategy yourself, but our point is simple. It has been rewarding, historically, to pay attention to the smart money. With that in mind, let’s take a look at one hedgie in particular: Roberto Mignone’s Bridger Management. Using Mignone’s latest fourth quarter 13F filing with the SEC, we can see which stocks he was using to prepare for 2013. Here’s his top five.

General Motors Company (NYSE:GM) is the hedge fund manager’s No. 1 stock pick, and it has been a rewarding investment of late. Mignone’s GM position comprises roughly 5.5% of his entire equity portfolio, and shares of the automaker are up 19.2% since the start of the fourth quarter. Wall Street’s average price target on GM represents another 27% upside from current levels.

The crux of this stock’s bullish thesis lies in its ability to provide solid growth at a reasonable price (GARP). Bolstered by strong emerging market demand and its ability to expand assembly operations domestically, the sell-side forecasts EPS growth of 27% next year, and a long-range annual rate of 12-13% through at least 2017. Shares of GM still trade at a meager PEG of 0.77, and are at parity with their book valuation. It’s easy to see why Mignone holds the stock with such high regard.

Morgan Stanley (NYSE:MS) is the hedgie’s second largest equity position, slightly smaller than his stake in GM. Though they operate in completely different sectors, Morgan Stanley’s investment idea is essentially the same: it’s a GARP play. At just over 0.7 times book, shares of MS trade at one of the lowest valuations of all the S&P 500-listed financial stocks, and its growth potential is one of the best. On average, analysts expect Morgan Stanley to generate EPS growth of 16.3% a year over the next half-decade—5th highest in its entire sector.

TripAdvisor Inc (NASDAQ:TRIP), meanwhile, is Mignone’s No. 3 pick, and is also a popular investment choice of Stephen Mandel, Jim Simons and George Soros (check out Soros’s full portfolio here). TripAdvisor has been in Mignone’s portfolio since the first quarter of last year, and over the past twelve months, shares of the online travel company have gained a whopping 42.8%.

Google Inc (NASDAQ:GOOG) has been in TripAdvisor’s proverbial “backyard” ever since its 2011 acquisition of ITA Software, but these are only issues over the long, long term. Looking at a shorter time horizon, TripAdvisor is a strong momentum play, through and through.

Why is this the case?

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

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!