Billionaire Stephen Mandel’s Top Picks Include Google Inc (GOOG)

Dollar General Corp. (NYSE:DG) was another of Mandel’s top stock picks with the filing disclosing ownership of over 14 million shares. As a general rule, the dollar stores are valued at small premiums to big-box discount retailers such as Target Corporation (NYSE:TGT) and Wal-Mart Stores, Inc. (NYSE:WMT) but as smaller businesses have better growth opportunities. Dollar General also boasts less market exposure than these two peers, with a beta of 0.1, though recent financials actually haven’t been that strong. Brookside Capital, a hedge fund which is part of the larger Bain Capital organization, had been a major shareholder at the beginning of January.

According to the 13F, Lone Pine owned over 20 million shares of The Gap Inc. (NYSE:GPS) at the end of March. Gap is a potential “growth at a reasonable price” stock; its earnings multiples are in the teens, but the company reported double-digit growth rates on both top and bottom lines in the fourth quarter of its fiscal year (which ended in early February) versus a year earlier. ESL Investments, managed by billionaire Eddie Lampert, had over 14 million shares of Gap in its portfolio at the end of 2012 according to that fund’s own 13F (find Lampert’s favorite stocks).

The fund increased its holdings of Monsanto Company (NYSE:MON) by 24% between January and March, pushing the agricultural technology company into its top five holdings. As with the rest of these picks, nobody would mistake Monsanto for a value stock- the trailing and forward P/Es are 22 and 20, respectively. While the sell-side actually seems to be forecasting slow earnings growth at the company, recent numbers have been very good as revenue rose 15% in its most recent quarter compared to the same period in the previous fiscal year (with net income up at a slightly higher rate). We’d be interested in taking a closer look at the company.

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