Hillshire Brands (HSH) & Other Lesser Known Stocks From Rivals Bill Ackman and Dan Loeb

When looking at the holdings of Dan Loeb and Third Point, two smaller names stick out in particular: Wesco International (NYSE: WCC) and Hillshire Brands (NYSE:HSH). Wesco sits at No. 12 in Loeb’s 13F portfolio, while Hillshire is two spots behind the position. Both stocks have gained an average of 4.1% over the past month, and each presents a solid investment opportunity moving forward.

Wesco, the distributor of various electrical and industrial supplies, currently trades at a lowly forward earnings multiple near 11x and sports a PEG ratio close to 1.0. The Street expects earnings to grow by over 30% in the next 12 months. Of the 20 analysts that cover the stock, 12 hold buy ratings, and the average price target represents a 9-10% upside from current levels near $68 a share.

Hillshire, meanwhile, was part of a spin off from Sara Lee last summer. The packaged meat producer had a nice earnings beat in its latest quarter (Q1 FY2013), reporting a 51-cent EPS compared to a 32-cent consensus. Hillshire cited lower costs and strength in its top-tier brands as drivers behind the outperformance, and reiterated its 2013 EPS guidance of $1.40-$1.55.

If the company can meet on the high side of this range, this would mark an 8% growth from one year earlier, falling right in line with the sell-side’s annual EPS forecast over the next half-decade. A forward P/E of 17.4x is slightly elevated in comparison to key competitors like Hormel (15.8x) and Unilever (16.1x), but it’s important to note that the stock actually becomes a value play if Hillshire continues issuing EPS beats.

The company reports second quarter financials on January 31st—another solid performance could have investors feeling rather cheery by Valentines Day.

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Disclosure: I have no positions in any of the stocks mentioned in this article