Tiger Cub John Griffin’s Long Term Stock Picks Include Amazon.com, Inc. (AMZN)

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Range Resources Corp. (NYSE:RRC) had been one of Griffin’s top picks two years ago, and he still had 3.2 million shares in his portfolio at the beginning of April. A $12 billion market cap natural gas and oil company, Range has apparently been hit hard by low natural gas prices. Production has been up, but poor market conditions mean that even with the sell-side expecting considerable improvements next year the stock is valued at 36 times forward earnings estimates. Investors should prefer to look for less speculative ways to play natural gas.

Rounding out our list of Blue Ridge’s long term stock picks is Amazon.com, Inc. (NASDAQ:AMZN). Amazon.com, Inc. (NASDAQ:AMZN)’s earnings have been very low on a trailing basis, and even with analysts looking for something of a turnaround in the company next year the forward earnings multiple is over 90. Bulls on the stock believe that Amazon.com, Inc. (NASDAQ:AMZN) will soon be able to shift into a profit-capturing mode following its period of expansion, but that seems like a risky move to us. Billionaire Steve Cohen’s SAC Capital Advisors was buying the stock in the first quarter of the year (find Cohen’s favorite stocks).

These long term picks from Griffin and his team are generally highly dependent on future earnings growth, something we don’t like to rely on when a company’s current business can’t justify its valuation. Investors might look at Dollar Tree as well as other dollar stores to see if that industry can support substantial growth over the next several years; that stock or one of its peers might have enough solid prospects to make it worth considering at current pricing.

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

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