DineEquity Inc (DIN), Asbury Automotive Group, Inc. (ABG): Michael Dell’s Top Stocks

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The company beat 1Q EPS expectations, posting $1.60 versus consensus of $1.50, and also set fiscal 2014 EPS guidance at $7.00. Fifteen analysts have the stock rated a “buy,” while only four have the stock as a “hold.” Consensus shows that analysts expect PVH to grow EPS at an annualized 12.1% over the next five years. The consensus price target is $119.40, a 6% upside from current levels.

Billionaire Ken Griffin is alongside Dell as one of PVH Corp (NYSE:PVH)’s largest hedge fund shareholders (check out Griffin’s latest buys).

Let’s make sure our car runs

Delphi Automotive PLC (NYSE:DLPH) makes up 14.6% of the MSD Capital portfolio and is its fourth largest holding. Delphi Automotive PLC (NYSE:DLPH) is a vehicle components manufacturer, providing electronic, powertrain, safety and thermal solutions to the global auto industry. Like the tailwinds for Asbury, a rise in global auto sales should help lift Delphi Automotive PLC (NYSE:DLPH).

Delphi Automotive PLC (NYSE:DLPH) has a global presence and has strategically located over 90% of its production in low-cost regions. Delphi is still a turnaround play after dumping its unprofitable European businesses.

Revenue growth in Asia is expected to outpace other regions, where Delphi Automotive PLC (NYSE:DLPH) already has a strong backlog. Also, the acquisition of FCI Group’s Motorized Vehicle Division in 2012 is expected to boost operating margins and be accretive to 2013 EPS. Much like Asbury, Delphi is expected to grow EPS at an impressive 16.4% annualized rate over the next five years, putting its PEG at only 0.69.

Billionaire Paul Singer’s Elliott Management is heavily concentrated in Delphi, with nearly 30% of its portfolio invested in the company (see Elliott’s top picks).

Bottom line

Although the attention for Michael Dell centers around the future of the tech company that bears his name, he has some notable bets placed on some under the radar stocks. DineEquity Inc (NYSE:DIN) is an undervalued play in the small-cap restaurant space. I also think higher employment and increasing consumer spending will be positives for PVH, not to mention the tailwinds related to the Warnaco acquisition. Both Asbury and Delphi should perform nicely on the back of a rebound in auto demand.

Marshall Hargrave has a position in Dell. The Motley Fool owns shares of Asbury Automotive Group.

The article Michael Dell’s Top Stocks originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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