Tiger Cub Lee Ainslie’s Low P/E Stock Picks Include Apple Inc. (AAPL)

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It’s been some time since Tiger Cub Lee Ainslie’s Maverick Capital filed its 13F for the first quarter of 2013, disclosing many of its long equity positions as of the end of March. However, we believe that there are still a couple ways for investors to make use of 13F filings. For one, we’ve found that it’s possible to use 13Fs to develop investing strategies; the most popular small cap stocks among hedge funds, for example, earn an average excess return of 18 percentage points per year. We can also screen individual managers’ top picks for stocks with low earnings multiples and determine if these names might in fact be good value stocks. Read on for our thoughts on the five largest holdings in Maverick’s most recent 13F with both trailing and forward P/E multiples of 13 or lower (or see the full list of stocks the fund reported owning).

Ainslie and his team added to their holdings of Apple Inc. (NASDAQ:AAPL) during the first quarter of 2013. Apple Inc. (NASDAQ:AAPL), which regained its place as the most popular stock among hedge funds (check out the rest of the top ten list), trades at 10 times trailing earnings and that is with a large share of its market cap in the form of cash. As such it looks to us that the market is expecting Apple Inc. (NASDAQ:AAPL)’s bottom line to continue to decay going forward. With the company planning to return more cash to shareholders, it should be worth watching in case management is able to stabilize its business and margins.

MAVERICK CAPITALMaverick bought 7.2 million shares of hospital company HCA Holdings Inc (NYSE:HCA) between January and March after not having owned any of it at the beginning of 2013. While HCA has also been having margin problems- which caused a significant decline in earnings in its last quarterly report compared to the first quarter of 2012- Wall Street analysts expect the company to recover. Their forecasts of slightly higher earnings per share for 2014 imply a forward P/E of 10. Fellow Tiger Cub John Griffin’s Blue Ridge Capital had 4.9 million shares in its portfolio according to that fund’s own 13F.

Fidelity National Financial Inc (NYSE:FNF), a $5.5 billion market cap company with a focus on title insurance (though it also has auto parts and restaurant business units), was another of Ainslie’s cheap picks. It is valued at 13 times forward earnings estimates, as the sell-side expects the company’s earnings from the middle of last year to revert to lower levels. Fidelity National Financial’s beta is 0.6 and the dividend yield is 2.7%, so defensive investors might be somewhat interested in digging more into the company to find out more about its future prospects and why analysts expect lower EPS in the future.
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