Warren Buffett and Billionaires Are Crazy About These 7 Stocks

5. 2. Liberty Global (LBTYA): Buffett had another $436 million invested in Liberty Global, but this time through its A shares. Stephen Mandel, David Einhorn, and Larry Robbins are also betting on this stock. Credit Suisse has a $50 price target on LBTYA on the assumption that Liberty GLobal is a large-cap EBITDA growth story. Here is what the said in their August 2014 report:

“LBTY has usd2.6bn of the current buyback programme remaining to do to end 2015 (on hold during the Ziggo offer period). Meanwhile LBTY leverage is falling due to rising EBITDA and we forecast will continue to on EBITDA growth and with Ziggo consideration being two thirds LBTY shares. So there would seem plenty of scope for the buyback programme to continue beyond 2015 (we assume usd1.5bn pa vs FCF of usd2bn+).

On these assumptions, LBTY EV/EBITDA falls to 7.6x in 2015E and 6.9x in 2016E, a discount to its peers and some European telcos as well. FCF yield rises to 9.4% in 2015E (the upper end of European telco valuations) and 11.6% by 2016E (above the upper end of the European telco range). We raise our target price to usd50 a share, which would leave LBTY on 7.6x 2016E EV/EBITDA and a 2016E equity FCF yield of 9.5%.”