Billionaire David Shaw’s Cheap Stock Picks Include Apple Inc. (AAPL)

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D.E. Shaw increased its stake in Exxon Mobil Corporation (NYSE:XOM) by 28% to a total of 2.7 million shares. Oil majors are also generally trading at least close to value territory, and Exxon Mobil Corporation (NYSE:XOM) happens to be valued at 11 times forward earnings estimates. Earnings were about flat in the first quarter of 2013 versus a year earlier, though the company’s revenue fell by over 10% over the same time frame. We’re interested in oil majors, but with many of Exxon Mobil’s peers also priced cheaply it would be worthwhile to see if their financial performance is any better.

Pfizer Inc. (NYSE:PFE) rounds out our list of D.E. Shaw’s cheap stock picks- the pharmaceutical company carries trailing and forward P/Es of 13 and 12, respectively, with the filing showing 6.8 million shares in the fund’s portfolio at the beginning of April. As with many pharmaceutical companies, Pfizer Inc. (NYSE:PFE) pays a high dividend yield of 3.5%, and with a beta considerably less than 1 might also be an attractive stock for income or defensive investors. We would note, however, that revenue was down in its most recent quarter compared to the same period in the previous year.

As a result, we think that we would avoid Pfizer at least for the time being. Apple Inc. (NASDAQ:AAPL) is certainly cheap in terms of valuation metrics, and would be poised for big gains if the company can halt its decline, but it might be best to wait for further results there as well. We’ve mentioned that Exxon Mobil might not be as interesting as the company’s peers, and while Wells Fargo and Marathon are certainly of interest we’re aware that those stocks’ industries are also generally cheap and so similar companies might be worth considering as well.

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

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