Billionaire Andreas Halvorsen’s New Stock Picks Include The Boeing Company (BA)

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Valero Energy Corporation (NYSE:VLO), a $21 billion market cap oil and gas refining and marketing company, was another of Viking Global’s new picks. The stock trades at 7 times earnings, whether we use trailing numbers or analyst consensus for 2014 in our analysis; really, the entire downstream portion of the oil and gas industry is carrying low multiples at this time. With analysts expecting Valero Energy Corporation (NYSE:VLO) to increase its earnings over the next several years, the five-year PEG ratio is 0.8 and we think it’s well worth considering as a value stock alongside its peers.

Halvorsen disclosed ownership of 2.8 million shares of Marathon Petroleum Corp (NYSE:MPC), another refining and marketing company. We’ve mentioned that this whole peer group is cheap going by earnings numbers, and Marathon (not to be confused with former parent Marathon Petroleum Corp (NYSE:MPC) Oil) is no exception with trailing and forward P/Es of 8. Financial results also appear to be on an upward trend, with double-digit percentage gains on both top and bottom lines last quarter compared to the first quarter of 2012.

We agree with Viking Globa that downstream energy companies look interesting, and would be interested in investigating Valero Energy Corporation (NYSE:VLO) and Marathon Petroleum Corp (NYSE:MPC) compared to their peers. The Boeing Company (NYSE:BA) also has some appeal, although we might want to wait for more financial results there to better evaluate hitting analyst targets for next year. In the cases of Adobe Systems Incorporated (NASDAQ:ADBE) and Cemex SAB de CV (ADR) (NYSE:CX), we’re considerably less interested as we can see that recent results have not been strong while the current valuations seem to be speculating on high growth going forward.

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

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