Billionaire Bruce Kovner’s Top Stock Picks for Q2 Include General Motors Company (GM)

Page 2 of 2

Ford Motor Company (NYSE:F) was another of Caxton’s favorite stocks, with the filing disclosing ownership of 6.5 million shares. Automakers have been popular value stocks, as many investors claim that the U.S. consumer auto fleet is very old in historical terms and that soon consumers will have to replace their cars. Ford Motor Company (NYSE:F) did record double-digit growth rates on both top and bottom lines last quarter compared to the first quarter of 2012, and trades at only 10 times trailing earnings. It might be worth looking into, though value investors would want to compare the company to its peers before buying.

Joining Ford Motor Company (NYSE:F) as an automaker at the top of the fund’s portfolio was General Motors Company (NYSE:GM). General Motors Company (NYSE:GM) is also thought of as a value play- it had actually made our previously mentioned list of the most popular stocks, and Warren Buffett’s Berkshire Hathaway is a major shareholder (find Buffett’s favorite stocks). General Motors Company (NYSE:GM) is valued at a small premium to Ford in terms of trailing earnings, but Wall Street analysts are forecasting strong earnings growth and its five-year PEG ratio is 0.6. We would note that in contrast to Ford, General Motors Company (NYSE:GM)’s business has been weaker than a year ago and we’d be interested in learning more about why that is.

According to the 13F, Caxton owned 5.2 million shares of Saks Inc (NYSE:SKS), up from 1.5 million shares three months earlier. The $1.8 billion market cap department store gets quite a premium valuation from the market- for example, the trailing P/E is 30- and with net income actually down 45% in its most recent quarter compared to the same period in the previous fiscal year it doesn’t look like a good value. 32% of the float is held short, so many market players agree with that conclusion; our database shows Southeastern Asset Management, managed by Mason Hawkins, with almost 27 million shares at the end of last year.

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

Page 2 of 2