Billionaire Ken Fisher’s Cheap Stock Picks Include Wells Fargo

Wells Fargo & Co (NYSE:WFC) was another of Fisher’s stock picks with the filing disclosing ownership of close to 19 million shares. Wells Fargo, of course, is now Warren Buffett’s largest publicly traded stock position by market value after Berkshire Hathaway added shares last quarter (research more stocks Buffett is buying). While the bank doesn’t look like a good value in terms of its book- the stock’s P/B ratio is 1.3- in earnings terms it is indeed a cheap stock as its trailing and forward P/Es are close to 10. That is in line with where other large banks are currently trading.

According to the 13F Fisher had 3.3 million shares of International Business Machines Corp. (NYSE:IBM) in its portfolio at the beginning of January. IBM carries trailing and forward earnings multiples of 14 and 11, respectively. The company did manage 6% earnings growth in the fourth quarter of 2012 versus a year earlier, and essentially flat revenue. As it happens IBM is another Buffett favorite; another large position in the stock is held by billionaire David Shaw’s D.E. Shaw, which owned 2.3 million shares according to its own filing (see more stocks D.E. Shaw owns).

The fund reduced its stake in JPMorgan Chase & Co. (NYSE:JPM) between October and December but still owned about 12 million shares at the close of 2012. JPMorgan Chase is generally thought of as a less stable bank than Wells Fargo, though it also trades at a discount to that peer: its trailing earnings multiple is 10 and the stock is priced right about at the book value of its equity rather than a significant premium. Highfields Capital Management, managed by Jonathon Jacobson, reported a position of 6.8 million shares in JPMorgan Chase though that fund had been selling the stock as well.

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