Ken Heebner’s Cheap Stock Picks Include Goldman Sachs Group, Inc. (GS)

According to the 13F, Heebner bought 2.5 million shares of Textron Inc. (NYSE:TXT), the $7.5 billion market cap aerospace and defense company perhaps best known for manufacturing Cessnas. We’d note that Textron Inc. (NYSE:TXT)’s stock is also quite responsive to fluctuations in market indices, with a beta of 2.0. With trailing and forward P/Es of 13 and 11 respectively, however, it might also be worth considering for investors who are willing to take on the significant macro risk. On the other hand, recent results have not showed much growth at Textron Inc. (NYSE:TXT).

The fund reported owning 970,000 shares of Discover Financial Services (NYSE:DFS) as of the beginning of April. Discover Financial Services (NYSE:DFS) trades at only 11 times its trailing earnings, even though its net interest income and its earnings per share both increased nicely in the first quarter of 2013 versus a year earlier (Discover Financial Services (NYSE:DFS) recently converted its FY to the calendar year). Analysts are cautious here, but again the stock is priced cheaply enough that either modest earnings growth or continued buybacks, let alone both, could make it attractive.

As a result Heebner has actually come up with a number of interesting picks, although some of these stocks do feature high beta statistics and become less appealing for investors whose portfolios are already highly exposed to the market. Discover and Goldman Sachs Group, Inc. (NYSE:GS) in particular stand out for generating more moderate growth rates alongside their low earnings multiples, though of course either of these financial stocks could be compared to their peers- many other megabanks, for example, are also potential value stocks.

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