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

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

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

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

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!