Billionaire Stephen Mandel’s High Upside Potential Picks Include QUALCOMM, Inc. (QCOM)

According to the filing, Mandel had 5.5 million shares of hotel and vacation home operator Wyndham Worldwide Corporation (NYSE:WYN). The stock carries trailing and forward earnings multiples of 22 and 14, respectively, demonstrating that the sell-side is forecasting significant improvements in earnings per share over the next year and a half. While Wyndham has been reporting higher revenue, its last quarterly report showed reduced margins and therefore lower net income last quarter compared to the first quarter of 2012. As a result we wouldn’t be too excited about the stock right now.

Lone Pine reported a position of 4.8 million shares in B/E Aerospace Inc (NASDAQ:BEAV), a $6.9 billion market cap provider of aircraft components; this was about even with what the fund had owned at the beginning of the year. While recent numbers have been good, B/E Aerospace is another company which is dependent on high growth going forward- it is currently valued at 27 times its trailing earnings. While analyst expectations are high enough to imply a five-year PEG ratio of 0.8, we’d be somewhat skeptical.

QUALCOMM, Inc. (NASDAQ:QCOM) and Cognizant seem somewhat interesting, in the sense that their valuations are only moderately high and the projections from analysts can be partially justified by what the companies have actually been doing. Kors is certainly an expensive stock, but that is in line with the higher recent growth at that company (and in turn high expectations for the future).

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