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Billionaire Jeffrey Vinik’s New Stock Picks Include Corning

The 13F disclosed a new position of 1.9 million shares in Corning Incorporated (NYSE:GLW). Corning is an $18 billion market cap manufacturer of specialty glasses including for electronics displays. It’s also been having problems with its net margins: revenue was up 14% last quarter compared to the fourth quarter of 2011, but net income fell by over 40%. The stock is arguably trading at value levels, with a trailing earnings multiple of only 11, and the dividend yield is close to 3%. Chilton Investment Company, managed by billionaire Richard Chilton, was also buying Corning (research more stocks Chilton liked).

HB Fuller Co (NYSE:FUL) was another of Vinik’s new stock picks, with the filing showing that the billionaire bought about 680,000 shares between October and December. The $2 billion market cap chemicals company specializes in adhesives and sealants. The stock carries trailing and forward P/E multiples of 16 and 13, respectively, so it does not require much earnings growth in order to justify the current valuation. However, recent sales growth has not translated into improvements on the bottom line. While we wouldn’t rule out HB Fuller, particularly as analyst expectations are high, we would not be particularly excited about it either.

Vinik was also buying Kodiak Oil & Gas Corp (NYSE:KOG), which has gotten considerable attention as a growth stock (its stock price is up 54% in the last year). The oil and gas exploration and production company is based in the Bakken Shale, one of the hottest shale plays in the onshore U.S. As a result, despite a trailing earnings multiple of more than 30 Kodiak’s five-year PEG ratio is 0.4 as analysts expect earnings to rise rapidly as the company continues to develop and then produce from its acreage. Billionaire Israel Englander’s Millennium Management is another investor in Kodiak (learn about more stocks in Millennium’s portfolio).

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

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