Multi-Billion Dollar Hedge Fund’s Top Picks for 2013: First American Financial Corp (FAF), Interpublic Group of Companies Inc (IPG)

Page 1 of 2

Hedge funds are often managed by some of the most talented investment professionals with billions of dollars at their disposal.  And with investment minimums that put them out of range for the average investor, their trading strategies and portfolio holdings are often hard to find and even harder to track. Fortunately, at Insider Monkey, we track 450 of the world’s most elite hedge fund managers and our research has shown that over time, their best picks have routinely outperformed, historically speaking.  For more than a decade in our back tests, our strategy beat the market by 18 percentage points a year, and since we’ve started sharing these picks with the public, it has outpaced the S&P 500 by more than 20 percentage points in just six months (learn how to use this strategy yourself).

Let’s look at one of those hedge funds in particular: Ariel Investments managed by John W. Rogers (see his entire equity portfolio here).

First American Financial Corp

On top lies First American Financial Corp (NYSE:FAF). It’s little surprise why First American takes the No. 1 spot. Everything about this company screams stability, from its core business (title and specialty insurance) to its price-to-earnings ratio of 8.9 versus an industry average of 13.7. Thanks to low mortgage rates and the subsequent need for title insurance, First American Financial Corp (NYSE:FAF)’s recent earnings report beat market expectations and nearly doubled bottom line totals from the same quarter last year. Rogers reduced his stake in the business by about 772,000 shares from the prior quarter, but it is still the most dominant stock in his portfolio.

Interpublic Group of Companies Inc (NYSE:IPG) is an advertising and marketing services company and is No. 2 on Ariel Investments’s list of equity holdings. The advertising conglomerate weathered a lackluster earnings report last month and continues to probe new year-over-year highs at $13.00. The stock is looking very strong into the end of the 1st quarter with a P/E ratio of 13.8 versus its industry’s average of 20.5, and looks to be a strong buy recommendation with an upside target of $14.25. Rogers upped his position in Interpublic Group of Companies Inc (NYSE:IPG) by 10% from the previous quarter.

At No. 3 is Lazard Ltd (NYSE:LAZ).  The investment bank and financial services business had a favorable earnings report last month–$1.44 for year ended 12/31/12 versus $1.31 year ended 12/31/11.  But because the stock seems overvalued at $37.00 to $37.55, it didn’t really get the boost it needed from the favorable news. Rogers cut his position in Lazard from the third quarter by only 2%, and analysts appear to be split between a BUY and HOLD recommendation….

Page 1 of 2
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

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!