One of these peers is Marathon Petroleum Corp (NYSE:MPC), which Halvorsen also initiated a large position in during Q1 of this year. At least recently this company has been experiencing growth on both top and bottom lines, yet it too qualifies as trading at value levels as its trailing P/E is only 8. We’d be interested in doing more research on the company to see if it might be able to continue its recent growth. Investors should note that, like Valero and other companies in the industry, Marathon has a fairly high beta (at 2.9, specifically).
The Allstate Corporation (NYSE:ALL), the $22 billion market cap insurer, rounds out our list of Viking Global’s cheap picks as the filing disclosed ownership of 4.6 million shares. Allstate carries trailing and forward earnings multiples of 10 and 9, respectively, so the market is pricing in something between stable performance and an actual decline in EPS. Net income was in fact down 7% last quarter compared to the first quarter of 2012 despite rising revenue. We wouldn’t rule it out as a value stock but we would like to see some indication that the financials could improve.
While Halvorsen does have a number of picks with low earnings multiples, many of them have been seeing lower earnings and/or revenue going by recent reports. We actually think that we might avoid the finance and insurance picks at least for now, and even in Lyondellbasell’s case it might be better either to hold off entirely or to check for better deals in chemicals. The downstream oil and gas companies are trading at essentially pure value levels, however, and with Marathon in particular growing its business recently it seems to be worth considering.
Disclosure: I own no shares of any stocks mentioned in this article.