Billionaire Steve Cohen's Biggest Buys
Marshall is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Even though the future of Cohen and SAC remains uncertain, it doesn't mean that Cohen's biggest stock purchases during the first quarter should be shunned. Cohen has a number of interesting stocks that he is bullish on--let's see why (check out Cohen's favorite small caps).
Amazon trades at a P/E that's well above its peers and above the S&P 500. Even with a five-year annualized expected EPS growth rate of 37%, Amazon's PEG ratio is upwards of 5.6. Amazon also has a P/B multiple of nearly 15 times, a 135% premium to the peer group. The valuation does appear to be rich, but Amazon still has sizable interest from hedge funds, with 58 hedge funds owning the stock going into 2013. Billionaire Ken Fisher of Fisher Asset Management had the most valuable position in Amazon, worth some $613 million, accounting for 1.7% of its total 13F portfolio (check out Fisher's top picks).
Part of Suncor's advantage is its significant oil-sands platform, with long-lived oil-sands reserves. The oil company also has an asset base that includes conventional reserves at offshore Eastern Canada and the North Sea. The company plans on increasing production to more than 1 million barrels of oil-equivalent per day by 2020, where oil sands production will grow by 10% and company-wide production will grow by 8% over the next 10 years.
Suncor trades at a 19.2 times trailing P/E, which is above some of its major peers. However, on a forward P/E basis, Suncor trades at only 9.3 times, suggesting the market is underestimating the company's interim growth capabilities.
Visa's business model makes it a solid cash-flow-generating company. The pick up in the U.S. economy should lead to an increase in consumer spending and payment volume, as well as payment volume increases in overseas markets. The EPS growth over the next five years is expected to come in at 18.6% annually over the next five years.
A few of the initiatives driving this growth will be the company's move into mobile payments and money-transfer services. Going into the second quarter, Visa had some of the most robust hedge fund interest among all companies, with 88 hedge funds long the stock, a 9% increase from one quarter earlier. John Scully's SPO Advisory Crop has the most valuable position, worth close to $842 million and accounting for 11.4% of its total 13F portfolio (check out SPO's top stocks).
As far as valuation goes, GNC currently trades at a P/E that is around 105% relative to the S&P 500, whereas its five-year average relative to the S&P P/E is 130%. Analysts expect EPS to grow at an impressive 18.9% annually over the next five years, putting its PEG ratio at a low 0.8
Everyone knows Amazon is the king of the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of competitors'. The Motley Fool's premium report will tell you what's driving the company's growth, and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.
Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Visa. The Motley Fool owns shares of Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!