Dollar General Corp. (DG), Delphi Automotive PLC (DLPH): Brazilian Behemoth Jorge Paulo Lemann Is Bullish

Jorge Paulo Lemann is a billionaire, and the Brazilian founded 3G Capital in 2004. With a net worth of over $10 billion, Lemann is considered a “professor” by none other than Warren Buffett; that’s high praise. 3G Capital is managed by Alexandre Behring, who joined the firm in 2005, and it has a billion-dollar U.S. equity portfolio. Because it’s important to track hedge fund sentiment for its market-beating potential, we’re going to take a look at Lemann’s top five stock picks from the second quarter, via his 13F filing with the SEC.

Jorge Paulo LemannIn first we have Dollar General Corp. (NYSE:DG), with a position worth $73.6 million. 3G Capital held this discount retailer in its 13F portfolio at the end of the previous quarter, in the very same spot. The size of the hedge fund’s position in Dollar General has shrank by about $17 million, but shares are up more than 23% year-to-date, so a bit of downsizing is likely just profit-taking. Dollar General’s stock price trades at a cheap forward P/E below 15.0x, and earnings are expected to flirt with 30% growth this year. With a PEG near 1.2, that’s what we’d call growth at a very reasonable price.

Delphi Automotive PLC (NYSE:DLPH), meanwhile, sits in the No. 2 spot. The hedge fund also trimmed its stake in this auto parts supplier just a smidgen, but shares have also had a nice 2013 (+45%), so it’s clear that Paulo Lemann and Behring know how to pick ’em.

Nielsen Hldg NV (NYSE:NLSN),  GNC Holdings Inc (NYSE:GNC) and  Coty Inc (NYSE:COTY) round out 3G Capital’s top five. Nielsen, the widely-used analytics company, has seen decent single-digit appreciation in its stock price this year, and it is set to  buyout competitor Arbitron, if the FTC doesn’t block the deal (it could still happen).

GNC, meanwhile, offers 3G exposure to the booming health and wellness industry with no fear of multi-level marketing issues; the company offers a franchise-based model. Shares are up almost 60% in 2013. Coty, on the other hand, has seen its shares lose a little over 3% on the year, but it does offer decent growth prospects in the luxury/fragrance market.

Continue reading Insider Monkey for more coverage of 13F season, but in the meantime, check out another hedgie’s top bets:

Why Tiger Global Traded Groupon For Priceline

Disclosure: none