American Capital Ltd. (NASDAQ:ACAS) was another of AQR’s small cap picks with the filing disclosing ownership of 6.9 million shares. The company invests senior debt, mezzanine debt, and equity with a focus on energy-related businesses and government contractors. It too carries a P/B of less than 1- 0.8, to be precise- and the forward earnings multiple is 12. Those are value levels, and even with the complexity of the business it might be worth further research. Billionaire John Paulson’s Paulson & Co. reduced the size of its position by 30% to 3.8 million shares (check out Paulson’s stock picks).
According to the 13F, Asness and his team owned 2.2 million shares of $3.7 billion market cap insurance company Assurant, Inc. (NYSE:AIZ). Assurant, Inc. (NYSE:AIZ) looks quite cheap: it trades at 8 times earnings, whether we use trailing numbers or analyst consensus for 2014, and at a P/B ratio of 0.7. Wall Street analysts expect at least moderate growth over the next several years, and as a result the five-year PEG ratio is 0.8. As such we’d be interested in taking a closer look at the company. Ric Dillon’s Diamond Hill Capital had 1.8 million shares in its portfolio at the beginning of January (research more stocks Diamond Hill owns).
AQR increased its holdings of Brocade Communications Systems, Inc. (NASDAQ:BRCD) by 31% between October and December to a total of nearly 14 million shares. The $2.6 billion market cap data storage company grew its revenue by 5% in the quarter ending in January 2013 (the first of its fiscal year). The sell-side is expecting considerable improvements in net income over the next couple years, and as a result the forward P/E is 8. Elliott Management, managed by billionaire Paul Singer, reported a position of 15 million shares in its filing following significant sales in the previous quarter.
Disclosure: I own no shares of any stocks mentioned in this article.