Kahn Brothers’s Top Stock Picks Include Citigroup Inc (C)

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According to the 13F, the fund owned 1.2 million shares of Merck & Co., Inc. (NYSE:MRK) at the beginning of April. With a dividend yield of 3.6% and a beta of 0.4, Merck is in those terms a slightly more interesting income stock than Pfizer. However, from a value perspective it doesn’t look quite as good: both revenue and earnings declined in its last quarterly report compared to the first quarter of 2012, and the trailing P/E is 24. Our database shows that Citadel Investment Group, managed by billionaire Ken Griffin, had 3.5 million shares of Merck in its own 13F portfolio (research more stocks Citadel owned).

The New York Times Company (NYSE:NYT) rounds out our list of Kahn Brothers’ stock picks with the filing disclosing ownership of 5.2 million shares. The newspaper has actually rallied in the last year and is up over 60%, even as revenue struggles and declining margins have caused net income to be much lower than its levels a year ago. The trailing and forward P/Es are 21 and 32 respectively, showing that analysts expect financials to continue to weaken. A number of market players are bearish on the New York Times, with the most recent data showing 16% of the float held short, and it does not in fact seem like a good value.

Disclosure: I own no shares of any stocks mentioned in this article.

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