Billionaire Dan Loeb’s Cheap Stock Picks Include Hess Corp. (HES)

Third Point purchased 1 million shares of Hess Corp. (NYSE:HES) between January and March. Hess Corp. (NYSE:HES) has announced plans to spin out its downstream operations as well, possibly after being prodded into doing so by billionaire Paul Singer’s Elliott Management; that fund had owned 15 million shares according to its own 13F (find Singer’s favorite stocks). Wall Street analysts project that the company will generate $5.91 in earnings per share next year, implying a forward earnings multiple of 11. In absolute terms that’s certainly in value territory, with some potential for the company to improve from being more focused on core operations.

The filing showed Loeb and his team with 950,000 shares of LyondellBasell Industries NV (NYSE:LYB) in their portfolio after cutting their stake in the chemicals company during Q1. Lyondellbasell’s beta is 2.5, reflecting how sensitive the demand for chemicals is on broader economic conditions. The chemicals industry, like agriculture and oil and gas, is home to a number of candidates for value status and Lyondellbasell is no exception with a trailing P/E of 13. We would note that sales have been down going by recent reports, however. Viking Global, managed by billionaire Andreas Halvorsen, was another major shareholder in the stock (research more stocks Viking Global owns).

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