Billionaire George Soros’s High Upside Potential Picks Include American International Group Inc (AIG)

Soros dumped most of his shares of American International Group Inc (NYSE:AIG) but maintained a stake of 2.9 million shares in the bailed-out insurer. With many other filers in our database selling American International Group Inc (NYSE:AIG) last quarter, the stock slipped to third in our list of the most popular stocks among hedge funds (see the full top ten list). The stock’s five-year PEG ratio is 0.9, suggesting that analysts see some upside potential in the company. In addition, American International Group Inc (NYSE:AIG) remains priced at a discount to the book value of its equity with a P/B ratio of 0.7. We think that the stock should trade a bit below book, but this discount could certainly narrow further.

Acacia Research Corporation (NASDAQ:ACTG) is a $1.2 billion market cap company which maintains a portfolio of intellectual property assets; the 13F showed Soros with 3.6 million shares at the end of the first quarter of 2013. The sell-side is projecting $2.98 in earnings per share for 2014, which makes for a forward P/E of only 8, and the five-year PEG ratio is considerably less than 1. The stock is down over 30% in the last year, however, as both revenue and earnings have been down sharply. While this may be due to unusual business conditions, we’d still be cautious here.

The billionaire reduced his stake in Motorola Solutions Inc (NYSE:MSI) to 1.7 million shares by the end of March. Motorola Solutions Inc (NYSE:MSI)’s five-year PEG ratio is 0.9, as analysts expect moderate growth in the company’s earnings over the next several years while the current valuation represents a trailing P/E in the teens. Earnings were up over 20% last quarter compared to the first quarter of 2012, though revenue was about flat. Tiger Global Management, one of the Tiger Cub hedge funds, was buying Motorola Solutions and reported 2.9 million shares in its own 13F (research more stocks Tiger Global was buying).

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