Dan Loeb’s 5 Stock Picks With The Most Upside Potential Including Apple Inc. (AAPL)

Third Point owned 10 million shares of Delphi Automotive PLC (NASDAQ:DLPH), a manufacturer of auto components including parts related to electrical, electronic, and powertrain systems. The entire auto ecosystem trades at low multiples, and Delphi is no exception: its trailing P/E is 9. With the company’s earnings actually being about flat in the third quarter compared to the same period in 2011, and analysts expecting growth in the industry, the PEG ratio comes out to 0.5 here as well. Billionaire John Paulson cut his stake last quarter, but his Paulson & Co. still had 25 million shares in its portfolio (see Paulson’s favorite stocks).

Apple Inc. (NASDAQ:AAPL) was another of Loeb’s picks. It too has a five-year PEG ratio of 0.5, with analysts insisting that the company will be able to continue its high earnings growth rates while the market seems to expect no growth- the trailing P/E multiple is only 12. Apple was actually the most popular stock among hedge funds last quarter, and therefore the top tech stock as well (find more tech stocks hedge funds are crazy about). We wouldn’t be quite as optimistic as the analyst consensus, but we do think that Apple can continue to deliver at least some growth and that it is therefore another good value play.

Health insurer WellPoint, Inc. (NYSE:WLP), which has a PEG ratio of 0.7, rounded out our list of high-upside Loeb picks. WellPoint trades at 8 times earnings, whether we consider trailing results or estimates for 2013. The market is skeptical here as well, and we think this is due to a combination of the company’s flat results and worries over future government regulation of health insurers. Of course, even given the apparently low price we’d be cautious for similar reasons. Fellow billionaire Leon Cooperman’s Omega Advisors sold shares last quarter but still had 1.3 million shares at the end of September (research more stocks Cooperman is trading).