Readers may recognize value investor Karen Finerman from her frequent appearances on CNBC’s Fast Money. Outside of her television appearances, Finerman is the CEO and co-founder of Metropolitan Capital Advisors, a New York-based hedge fund established in 1992.
The 48-year old Finerman recently authored a book titled Finerman’s Rules: Secrets I’d Only Tell My Daughters About Business and Life. The new release offers insights on a variety of topics, including personal finance and advice for career-minded women. Although I do not meet the target female demographic, I consider the book a must-read for both male and female audiences.
With respect to her hedge fund, Finerman maintains a simple goal. The fund aims to outperform large-cap indices such as the S&P 500 using a value-oriented approach, all while incurring less risk.
Here are three stocks owned by Finerman that readers might consider:
Health benefit company
Metropolitan Capital entered the New Year with a large position in WellPoint, Inc. (NYSE:WLP), and Finerman increased her stake even more during the first quarter.
Finerman’s good work has been confirmed by the healthy rally in the stock (no pun intended) that has taken place since April. Shares of WellPoint, Inc. (NYSE:WLP) have outperformed the S&P 500 with a 34% gain through June.
Despite the recent gains, I believe the health benefit company can run higher in the next 12 months. WellPoint, Inc. (NYSE:WLP) reported better than expected Q1 earnings on April 24, with EPS of $2.94 significantly above the consensus of $2.38. Management provided full-year earnings guidance of “at least $7.80” based on anticipated enrollment growth.
In my view, the Q1 earnings beat is the start of a long-term positive at WellPoint, Inc. (NYSE:WLP). New members are likely to join a WellPoint, Inc. (NYSE:WLP) health plan based on the expansion of Medicaid under President Obama’s Affordable Care Act. The company is also benefiting from a new CEO, Joseph Swedish.
On May 13, WellPoint, Inc. (NYSE:WLP) reiterated its full year guidance in a regulatory filing. Numerous Wall Street firms have upgraded the stock in recent weeks, which could lead other hedge funds to ride on Finerman’s coattails.
The company will release Q2 2013 earnings before the market open on July 24. I believe management’s guidance is likely conservative, and the stock could reach $90 before year-end.
Industrial machinery & equipment
As a value investor, Karen Finerman will often buy and hold stocks for the long-term. She continues to view The Timken Company (NYSE:TKR) positively, with a large ownership position as of the most recent SEC filing.
The Timken Company (NYSE:TKR) develops and sells products for friction management and mechanical power transmission, alloy steels, and steel components. The $6 billion company operates outside northeast Ohio with more than 20,000 employees in 30 countries and territories.