Hedgie’s Top Picks Have Already Beaten the Market by 3% in 2013: Verisk Analytics, Inc. (VRSK), FEI Company (FEIC)

In short, both have key long-term advantages that don’t look like they’ll end any time soon, and legendary billionaires Jim Simons (see his favorite stocks) and Israel Englander hold both of these companies in their portfolios. That’s some great company for Andrew Sandler to have, obviously, and ardent investors should pay attention to this stable, undervalued duo.

Helmerich & Payne, Inc. (NYSE:HP) was a new position for Sandler last quarter, and it’s notable that the oilwell drilling contractor has taken a spot so near to the hedge fund manager’s heart. For long-term investors buying into Helmerich between 2011 and the beginning of 2012, there hasn’t been much of a reason to be bullish—shares have yielded mid-single-digit returns with a relatively paltry dividend.

Since the start of 2013, however, Helmerich has popped more than 17%, rewarding those investing more recently, such as Sandler. Record Q1 results reported last month have supported this stock quite nicely, and a continued natural gas rebound should only fan the flames of this proverbial fire. In addition to Sandler ‘s bullishness, Wall Street expects 9-10% upside from current levels, and even that may be conservative.

Last but certainly not least, Tanger Factory Outlet Centers Inc. (NYSE:SKT) rounds out Sandler and his fund’s top five, and saw a 22% boost last quarter. Tanger is a REIT, and as its name suggests, it focuses on factory outlet properties. Despite a dividend yield (2.4%) that places it at 27th out of 34 companies operating in the Retail REIT industry, it has returned more than 20% over the past year.

Driving investors into Tanger seems to be its ability to provide solid growth—not value—as analysts predict its annual EPS growth over the next five years to outperform 80% of its peer group. All in all, growth of about 8% a year is expected, and although shares trade at relatively unattractive price multiples, it’s difficult to bet against Tanger’s momentum in a generally bullish industry.

Due to the potential to see returns like this, it’s always important to watch the smart money, and Andrew Sandler’s top five picks are a great example of why we track this space. Each has returned an average of 9.2% since the start of 2013, outperforming the SPY by nearly three percentage points.

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