Billionaire Steven Cohen Reveals Two New Stock Picks, While Roberto Mignone Boosts Chimerix Inc. (CMRX) Stake

In a Schedule 13G filing, Point72 Asset Management L.P. reported initiating a new stake of 3.95 million Class A shares of DSW Inc. (NYSE:DSW), which represents 5.0% of the company’s shares. So let’s attempt to stipulate what might have guided Cohen to go long DSW. The company mainly operates through two segments: the DSW segment and the Affiliated Business Group segment. The former segment provides a wide variety of dress, casual and athletic footwear and accessories, while the latter one supplies merchandise to three other retailers. The shares of the footwear retailer have lost 36% over the last year, presumably because of weak comparable store sales growth. DSW Inc. (NYSE:DSW) reported total net sales of $1.95 billion for the nine months that ended October 31, compared with $1.86 billion reported for the same period a year earlier (both segments generated higher sales year-over-year). At the same time, the company’s net income for the nine-month period of fiscal year 2015 totaled $124.3 million or $1.39 per share, up from $122.5 million or $1.35 per share reported a year ago.

Although DSW reported lower comparable store sales for the third quarter of fiscal year 2015 relative to the third quarter of the prior year, the company appears to be trading at a discount at the moment. The stock trades at a trailing price-to-earnings ratio of only 13.23, which is substantially below the average of 21.04 for the S&P 500 companies. Moreover, analysts anticipate earnings per share of $1.61 for fiscal year 2016, giving the stock a forward P/E of 14.27 (compared to 15.65 for the S&P 500 Index). To sum up, there seems to be some upside for the stock in the upcoming year, even without considering the strengthening consumer sentiment in the nation. Nonetheless, the hedge fund sentiment towards the stock was negative in the third quarter, as the number of smart money investors in our system with positions in the footwear retailer dropped to 29 from 36 quarter-over-quarter. Jim Simons’ Renaissance Technologies reported owning 1.02 million shares of DSW Inc. (NYSE:DSW) through its 13F for the September quarter.