Billionaire David Shaw’s Low P/E Stock Picks: Apple Inc. (AAPL), International Business Machines Corp. (IBM), Wells Fargo & Co (WFC)

The fund increased its holdings of $67 billion market cap Occidental Petroleum Corporation (NYSE:OXY) by 86% to a total of 3.9 million shares. A drop in net income in the fourth quarter of 2012 versus a year earlier has contributed to Occidental carrying a trailing P/E of 15- decent on an absolute basis, but actually a bit expensive compared to some other large energy companies and certainly a level we’d normally associate with growing earnings. Revenue was up a bit over the same period but overall we are skeptical that Occidental is in fact a good value.

D.E. Shaw was also buying shares of Marathon Petroleum Corp (NYSE:MPC) between October and December, and closed 2012 with 3.6 million shares in its portfolio. Marathon Petroleum is a $29 billion market cap refining and marketing company (not to be confused with Marathon Oil, which is an exploration and production company following the 2011 spinout of Marathon Petroleum).  The stock trades at 9 times earnings, whether we use trailing results or consensus for 2014. However, analysts do expect net income to tick up over the next several years resulting in a five-year PEG ratio of 0.7.

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