Billionaire Louis Bacon’s New Stock Picks Include Bank of America

LinnCo, LLC (NASDAQ:LNCO) was another of Moore’s new stock picks. Linn is an acquirer of oil and gas acreage in the onshore United States. At a market capitalization of $1.3 billion, it trades at 20 times analyst consensus for 2013. Linn went public in October and is about flat from its levels shortly after that time; it has made two dividend payments, which when annualized imply a dividend yield of over 7%. As a result income investors who are comfortable looking at recent IPOs could look into the sources of its cash flow and see that they are stable enough to support continued payments.

Bacon and his team bought 2.5 million shares of property and casualty insurance company Hartford Financial Services Group Inc (NYSE:HIG) in the fourth quarter of 2012. HIG is another case where the market does not trust the internal asset valuations, judging by the price-to-book ratio of 0.5. However, 10% of the outstanding shares are held short, showing a significant bearish community, and when comparing the current valuation to earnings the company looks in line with Bank of America- the value case there being dependent on significant bottom-line improvement. Billionaire John Paulson’s Paulson & Co. is another major investor in HIG (check out Paulson’s stock picks).

A new position of 1.1 million shares in News Corp (NASDAQ:NWSA) rounded out Moore Global’s top five new holdings. Hedge funds often like to invest in spinouts, as management is better able to focus on operations without having to concern themselves with the larger business (read more about investing in spinouts). The breakup of News Corp will create a similar situation in the mind of many investors, and we have tracked a number of hedge funds owning News Corp. It is the top consumer services stock among hedge funds per our database (research more consumer services stocks hedge funds are excited about).

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