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Billionaire David Tepper’s Small Cap Picks Include US Airways Group, Inc. (LLC)

Huntsman Corporation (NYSE:HUN), a $4.4 billion market cap chemicals company, was another of Appaloosa’s small cap picks with the filing disclosing ownership of 7.4 million shares. With demand for many chemicals dependent on the broader economy, Huntsman’s beta is 2.5. Revenue was about flat in its most recent quarter compared to the same period in the previous year, but little growth is required given the trailing P/E of 12. Passport Capital, managed by John Burbank, had Huntsman Corporation (NYSE:HUN) as one of his largest holdings by market value at the beginning of January (research more stocks Burbank likes).

According to the 13F Tepper and his team owned 2.4 million shares of Owens Corning (NYSE:OC), the provider of building materials including glass fiber and insulation. Owens Corning is another company tied to macro factors (namely construction) and so its beta is high as well at 1.8. Consensus earnings estimates for 2014 imply a forward P/E of 12, with expectations for continued growth pulling the five-year PEG ratio below 1. However, once again business was not particularly strong in its last quarterly report. Tiger Cub John Griffin’s Blue Ridge Capital was another major shareholder in Owens Corning (NYSE:OC).

Appaloosa cut its stake in Sealed Air Corp (NYSE:SEE) by 10% but still had 1.8 million shares of the $4.4 billion market cap packaging products company in its portfolio at the end of December. At that valuation, Sealed Air Corp (NYSE:SEE) trades at 14 time forward earnings estimates and that figure is based on forecasts that earnings will rise over the next couple years. Scopia Capital, a hedge fund with over $2 billion in assets under management, was buying shares during the fourth quarter (see Scopia’s stock picks).

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

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