Billionaire Israel Englander’s Small Cap Picks Include Hillshire Brands Co (HSH)

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Hillshire Brands Co (NYSE:HSH), the producer of packaged meat and other food products, was another of the fund’s small cap picks. The stock trades at 18 times forward earnings estimates, which is in the same range as many other food related companies as many investors look for fairly safe consumer staples investments. Others may be speculating about Hillshire Brands Co (NYSE:HSH) as an M&A target, with Berkshire Hathaway recently buying Heinz and a Chinese company announcing a prospective purchase of Smithfield. Citadel Investment Group, managed by billionaire Ken Griffin, reported a position of 3.4 million shares in Hillshire Brands Co (NYSE:HSH) in its own 13F (find Griffin’s favorite stocks).

Rounding out our list is $3.4 billion market cap Missouri and Kansas electric utility Great Plains Energy Incorporated (NYSE:GXP). As might be expected for a utility, Great Plains Energy Incorporated (NYSE:GXP) more or less fits the profile of a classic defensive stock: its beta is only 0.4, and its dividend yield is almost 4% at current prices. It should be noted that the company cut its quarterly dividend payment in half in early 2009, and there have only been a couple small increases since that time. Both the trailing and forward P/Es come in at 14.

We’re not particularly excited about any of Millennium’s picks, though McDermott International (NYSE:MDR) and Gardner Denver, Inc. (NYSE:GDI) are cheap enough on an earnings basis that if they can stabilize their business, or possibly even generate some earnings growth, they may be worth considering. Gulfport Energy Corporation (NASDAQ:GPOR) might also be worth monitoring as well, though we’ve mentioned that the current valuation is fairly aggressive and the company would need to improve considerably in order to justify where it currently trades.

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

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