NetApp Inc. (NASDAQ:NTAP) is expected to see revenues up 3% in FY2013 and makes up 3.9% of Maverick’s 13F portfolio. The data storage company should show robust growth with increased IT spending tailored toward storage products. Major competitor EMC trades at 2.6x sales, whereas Netapp is at only 2x. Netapp also recently saw an upgrade from Raymond James to outperform, with increased optimism on tighter integration of flash technology. The valuation of Netapp is also intriguing; its forward P/E of 14x is well below its trailing P/E of 27x, suggesting investors are underappreciating the future. George Soros was upping his stake by over 30% last quarter (see all of George Soros’ top picks).
Last but certainly not least, Cigna Corporation (NYSE:CI) makes up 3.8% of Maverick’s 13F portfolio and is a giant in the employee benefits industry. Cigna is expected to see firm-wide premium and fee revenues up 36% this year on the back of its HealthSpring acquisition. With the purchase, the company’s revised expected annual EPS growth (10%) is above its closest peers. The acquisition also added some 850,000 additional commercial members, and revenue growth is expected to be up 8% in 2013, with a large portion of this growth coming from elderly customers.
On a valuation basis, Cigna trades relatively in line with major peers, compared to Humana (9x) and WellPoint (8x), but it also generates solid return on equity of 17%. It should be mentioned that David Einhorn is the top fund owner of Cigna with over 5.5% of his 13F invested in the healthcare company (check out David Einhorn’s top picks).
Apple Inc. (NASDAQ:AAPL), meanwhile, is one of the cheapest stocks around, and Qualcomm presents a solid growth opportunity. We also like Avago given its exposure to the appliance market, which should prove to be robust with a rebound in consumer spending. Netapp will be able to grow on the back of increased IT spending, and Cigna will see interesting potential from a rapidly aging population.
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