Steven Cohen Building a ‘House’ For His Portfolio With These Stocks

At a forward P/E below 9x, a PEG near 0.5 and a ridiculously low sales multiple almost 80% below parity, Goodyear is even cheaper than RenaissanceRe. With the recent capital allocation boost, we expect Cohen to continue his bullish ways into the foreseeable future.

Visteon

Staying in the auto sector, Visteon Corp (NYSE:VC) is another favorite small-cap of Cohen’s. Like Goodyear, this OEM supplier is in the midst of an event-driven appreciation, with shares up over 60% in the past twelve months. After selling its auto lighting business to Varroc last year, a $100 million repurchase plan was announced. With new CEO Timothy Leuliette on board soon after, $200 million more in buybacks were announced this past January.

Last month,Visteon upped this repurchase plan a third time to $1 billion (through 2015), a direct result of the company’s sale of its joint venture stake in its car interiors business to China’s Huayu Automotive Systems. This updated buyback plan represents almost a third of Visteon’s total market cap.

Final thoughts

Steven Cohen’s bigger name investments typically get the most attention from investors, but it’s the small-cap companies that provide some surprising value opportunities. When sprinkled with a dash of event-driven appreciation, it’s easy to see why the hedge fund manager is long, particularly on Visteon and Goodyear. We’ll continue to watch these two small-cap auto players very closely.

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