Delphi Automotive PLC (DLPH), Herbalife Ltd. (HLF): Billionaire Dan Loeb’s High Upside Potential Picks

Third Point was selling some of its shares of $3.2 billion market cap industrial equipment wholesaler WESCO International, Inc. (NYSE:WCC) but still had a little under 1.4 million shares in its portfolio at the beginning of January. WESCO trades at a premium to the companies we’ve mentioned thus far in terms of its trailing earnings, with a P/E of 18. Its upside potential is therefore much more dependent on growth. The most recent data shows that 19% of the outstanding shares are held short. Alan Fournier’s Pennant Capital Management was another major shareholder in WESCO (check out more stocks Pennant owns).

International Paper Company (NYSE:IP) rounds out our list of Loeb’s picks with high upside potential; while that company’s trailing earnings have been low, this has been in part due to special items. With analysts expecting those to subside, and the industry in general to improve, International Paper trades at only 9 times forward earnings estimates. We are, however, skeptical and would worry that analysts are being too optimistic about the paper industry in particular. Senator Investment Group, managed by Doug Silverman, recently reported a large position in International Paper (research more stocks Senator has been buying).

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