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By Matt Doiron

The Bill and Melinda Gates Foundation, which is managed by Michael Larson, filed its 13F for the fourth quarter of 2012 in February. This filing publicly disclosed many of its long equity positions in U.S. stocks as of the end of December (see which stocks the trust owned). We use 13Fs from hedge funds and other notable investors such as the Gates Foundation to develop investment strategies; for example, we have found that the most popular small-cap stocks among hedge funds produce an excess return of 18 percentage points per year (read more about small cap stock picks). Of course it's also worth investigating which stocks the trust liked in a number of categories, including those stocks which meet the traditional value investor criteria of having low price-to-earnings multiples. Here are our thoughts on the trust's five largest holdings by market value, which have both trailing and forward P/Es of 16 or lower:

The trust reported a position of over 10 million shares in Caterpillar Inc. (NYSE:CAT). The construction and mining equipment company's stock is down 17% in the last year, and after some very good quarters Caterpillar finally saw its financials suffer in the fourth quarter of 2012. Revenue was down 7% versus a year earlier, and earnings fell sharply. The trailing earnings multiple is only 11, so there is something of a value case to be made, but many of its competitors are also cheap in terms of the trailing P/E. We think that it would be wise to compare Caterpillar to peers such as CNH Global and Joy Global.

Canadian National Railway (NYSE:CNI) was another of Larson's top picks at a position of 8.6 million shares. At 16 times trailing earnings, Canadian National is priced at a discount compared to peer Canadian Pacific (billionaire activist investor Bill Ackman is attempting to transform that company). Growth on both top and bottom lines has been modest, and the stock actually looks about fairly valued (as opposed to undervalued) unless business can pick up. Canadian National's market cap is $43 billion, making it one of the larger railroads publicly traded on U.S. exchanges.

According to the 13F the trust owned over 11 million shares of Wal-Mart Stores, Inc. (NYSE:WMT) following a small increase in its position. The discount retailer carries trailing and forward P/Es of 15 and 12, respectively, and perhaps unsurprisingly has little exposure to the broader economy with a beta of 0.4. However, we would note that the dollar stores are valued only slightly higher than Wal-Mart in terms of their trailing earnings yet have continued to record strong growth rates in some cases; they might be more attractive investments even if they are less "pure value" stocks than Wal-Mart.

The Bill and Melinda Gates Foundation Trust joined 53 other filers in our database in owning Exxon Mobil Corporation (NYSE:XOM), making the supermajor one of the most popular energy stocks among hedge funds (see the full top ten list). Net income was up 6% last quarter compared to the fourth quarter of 2012, though revenue was down by a similar amount. Wall Street analysts do expect earnings at Exxon Mobil to come down a bit over the next couple years, but the forward P/E is still low at 11. That is actually higher than many other oil majors, but Exxon Mobil's market leadership and decent financial performance may be worth the premium.

BP plc (NYSE:BP), for example, trades at only 8 times forward earnings estimates but that company experienced a large decline in earnings in its most recent quarter compared to the same period in the previous year. The trust disclosed ownership of 7.1 million shares of BP, which actually has a higher trailing earnings multiple than Exxon Mobil - its discount on a forward basis is due to higher expectations in terms of a recovery on the bottom line. BP's dividend yield of about 5% gives it some prospects from an income perspective, though in terms of value it might not be as good a buy as its peers.

Source: Bill And Melinda Gates' Foundation Likes These Cheap Stocks