One of Robertson’s picks was Sirius XM Radio Inc (NASDAQ:SIRI); he increased his holdings by 16% last quarter, to a total of 5.9 million shares. Sirius’s revenue was up 14% in the third quarter compared to the same period in 2011, though net income was down sharply. We’d also note that there is considerable short interest in the stock, so investors should not put too much emphasis on the PEG metric; a number of market players think it’s overvalued at these prices. Fellow billionaire Leon Cooperman’s Omega Advisors was another buyer during the third quarter (find more stocks Cooperman was buying).
American International Group, Inc. (NYSE:AIG) was the third most popular stock among hedge fund during the third quarter of the year (see the top ten) after not having made the list at all three months earlier. Robertson reported owning about 520,000 shares of the insurer. AIG trades at 10 times forward earnings estimates, and analysts expect net income to grow over the next several years, making it look appealing to value investors. We also like that it is trading at half the book value of its equity; even though we probably would value the stock at a discount to book value, it would be a smaller one than that.
The most popular stock among hedge funds had been Apple Inc. (NASDAQ:AAPL), and this was Robertson’s largest 13F position by market value at the end of the quarter as he owned just over 100,000 shares. Apple carries trailing and forward P/E multiples of 12 and 9, respectively, and posts a five-year PEG ratio of 0.5. It looks to us like the analyst consensus strongly favors high earnings growth, while investors seem to be assuming that Apple won’t be able to grow its bottom line at all going forward. We’d look for moderate growth at the company, so while we’re not as bullish as the sell-side we’d consider it a buy. Billionaire Dan Loeb’s Third Point was buying Apple last quarter (check out Loeb’s stock picks).
Robertson liked Ocwen Financial Corporation (NYSE:OCN), with his position of about 760,000 shares being 68% larger than it was at the beginning of July. Millennium Management, which is managed by billionaire Israel Englander, had also been buying the stock (see Englander’s favorite stocks). Ocwen is a savings and loan company whose stock price has more than doubled in the last year. The forward P/E multiple is 8, and the five-year PEG ratio is 0.6; it may be worth taking a closer look at the company.
$550 million market cap Chinese mapping and navigation company AutoNavi Holdings Ltd (NASDAQ:AMAP) had its earnings increase 9% last quarter versus a year earlier, but revenue rose at a greater rate and Wall Street analysts apparently expect growth to continue: at 17 times trailing earnings, the stock’s PEG ratio is 0.7. Robertson actually had the largest position of any hedge fund or notable investor in our database of 13F filings, at about 520,000 shares. It may be too small for hedge fund managers to notice (though it looks to have over $1 million in daily dollar volume) or investors may be avoiding Chinese companies.
