Cliff Asness’s Top Stock Picks Include Exxon Mobil Corporation (XOM)

The fund reported owning 4.4 million shares of JPMorgan Chase & Co. (NYSE:JPM) at the beginning of April. The 76% gain in the bank’s stock price over the last year has swelled its market capitalization to slightly above the book value of the equity, though on an earnings basis JPMorgan is still arguably a value play. Specifically, the trailing and forward P/E multiples are 10 and 9 respectively and recent quarterly reports show that earnings have been up. JPMorgan Chase & Co. (NYSE:JPM) made our list of the ten most popular stocks among hedge funds in the first quarter of 2013 (see the full top ten list).

AQR slightly increased its stake in The Procter & Gamble Company (NYSE:PG) to a total of 2.6 million shares. The personal products company is a classic example of a defensive stock, with a beta of 0.3, a dividend yield of just over 3%, a market cap over $200 billion, and strong brand names. However, demand for safe assets has bid up the company’s earnings multiples into the high teens, even though The Procter & Gamble Company (NYSE:PG)’s stability should mean that the business has limited growth prospects. Warren Buffett’s Berkshire Hathaway is another major shareholder in Procter & Gamble (find Buffett’s favorite stocks).

Pfizer Inc. (NYSE:PFE) rounds out our list of Asness’s top stock picks. As with many other large pharmaceutical companies- as well as many of AQR’s favorite stocks in general- Pfizer Inc. (NYSE:PFE) pays an attractive dividend yield (3.5% in this case). The stock also trades at 13 times trailing earnings, and so requires little growth going forward in order to justify the current valuation; although revenue has been down, the company may be worth a look. Pfizer was billionaire Ken Fisher of Fisher Asset Management’s top pick for 2013, and that fund owned almost 31 million shares as of the end of March (here are more stocks Fisher owned).

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