Noam Gottesman’s Top Stock Picks Include Facebook Inc (FB)

The fund added shares of Apple Inc. (NASDAQ:AAPL) and owned a little less than 100,000 shares at the end of 2012. General pessimism about Apple contributed to it no longer being the most popular stock among hedge funds last quarter (check out hedge funds’ top five stocks). It is now down 14% in the last year. Apple is not a growth stock: it is valued at only 10 times its trailing earnings, meaning that as long as it can preserve its current business it will prove a good value. The next couple years should see a race between lower margins and growing tablet and smartphone sales.

Qualcomm, Inc. (NASDAQ:QCOM) was another of GLG’s top picks, with a position of over 770,000 shares. The communications equipment company is coming off a high-growth quarter, with the first quarter of its fiscal year (the quarter which ended in December 2012) seeing large increases in both sales and net income. The trailing and forward P/Es are 17 and 14, respectively. Billionaire Ken Fisher’s Fisher Asset Management reported owning 9.1 million shares of Qualcomm in its own 13F filing (research more stocks Fisher owns).

Gottesman nearly doubled the size of the fund’s position in Citgroup Inc. (NYSE:C) and closed December with 1.2 million shares in its portfolio. At a P/B ratio of 0.7, Citi is still priced at a significant discount to the book value of its equity even after moving up in price over the last year. Revenues were up slightly last quarter versus a year earlier, and margins expanded as well. Appaloosa Management, managed by billionaire David Tepper, cut its stake slightly but Citigroup was still one of its largest holdings (see Tepper’s favorite stocks). Analyst estimates for Citigroup imply a forward P/E of 8.

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