8 Top Picks From Hedge Fund Billionaire John Paulson

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 |  Includes: AEM, ETE, GLD, HIG, MOS, NWS, NYX, SUG
by: Hawkinvest

John Paulson made a fortune for himself and his investors when he shorted sub-prime mortgages. Many have called this the greatest trade ever, helping Paulson rise to fame. This year has been tougher on Paulson's fund as a number of bets have not fared too well. Paulson was known to have made investments in financials like Bank of America (NYSE:BAC) and Hartford Financial (NYSE:HIG), both of which have fallen sharply in the past couple of months. Another stock that has not performed well in 2011 is Sino-Forest (OTC:SNOFF), which dropped sharply after serious allegations were made against it. Even though the first half has not been the best for some of Paulson's investments, it still makes sense to consider the positions in his funds and consider that it might be time to buy some of his favorites at bargain prices. This CNBC article lists a number of the stock holdings at Paulson & Co. Here are a few stocks in the fund to consider:

Hartford Financial Services (HIG) is a leading insurance company, and also offers other financial products both in the USA and globally. Recently, Hartford announced that 2nd quarter profits would be well below expectations due to asbestos litigation and losses from major storms. This lower than expected profit and a major market correction has caused the shares to drop and has created a great buying opportunity for longer term investors.

Here are some key points for HIG:

  • Current share price: $15.86
  • The 52 week range is $15.67 to $31.08
  • Earnings estimates for 2011: $2.86 per share
  • Earnings estimates for 2012: $3.85 per share
  • Annual dividend: 40 cents per share which yields 2.2%
  • Book value: $45.93 per share

News Corp (NASDAQ:NWS) is a major media company that owns television channels, newspapers and more. In the last few weeks this stock has been hit over a phone hacking scandal. This problem does not seem to be going away quickly, so headline risks could continue to keep this stock under pressure. The CNBC states that: "Paulson & Co. purchased a $184 million stake in News Corp. this past quarter."

Here are some key points for NWS:

  • Current share price: $15.89
  • The 52 week range is $13.83 to $19.08
  • Earnings estimates for 2011: not available on Yahoo Finance
  • Earnings estimates for 2012: not available on Yahoo Finance
  • Annual dividend: 19 cents per share which yields 1.1%
  • Book value: $11.23 per share

The Mosaic Company (NYSE:MOS) is a leading producer of fertilizers. The CNBC article states "John Paulson's firm purchased a $152 million stake in the firm this past quarter."

Here are some key points for MOS:

  • Current share price: $60.04
  • The 52 week range is $55.70 to $89.24
  • Earnings estimates for 2011: $4.31
  • Earnings estimates for 2012: $5.53
  • Annual dividend: 20 cents per share which yields .3%
  • Book value: $26.07 per share

NYSE Euronext (NYSE:NYX) is a leading stock exchange company. The CNBC article states: "Paulson & Co. picked up a $103 million position in NYSE Euronext last quarter, but I suspect the purchase was for his firm's Paulson Partners Enhanced Fund as a merger arbitrage opportunity."

Here are some key points for NYX:

  • Current share price: $24.56
  • The 52 week range is $24.40 to $41.60
  • Earnings estimates for 2011: $2.60
  • Earnings estimates for 2012: $2.94
  • Annual dividend: $1.20 per share which yields 4.4%
  • Book value: $27.32 per share

Southern Union (NYSE:SUG) is a leading natural gas company. Natural gas has been weak and could get weaker if the economy goes into a recession. I would not invest in any natural gas company now, but Paulson seems to like this one.

Here are some key points for SUG:

  • Current share price: $41.04
  • The 52 week range is $23.60 to $44.65
  • Earnings estimates for 2011: $1.91
  • Earnings estimates for 2012: $2.07
  • Annual dividend: 60 cents per share which yields 1.4%
  • Book value: $20.89 per share

Agnico-Eagle Mines (NYSE:AEM) is a major gold producer. One of Paulson's best bets lately has been gold and gold mining companies. CNBC reports that Paulson & Co., has a stake worth about $44 million in this company along with a massive stake in the Gold Shares ETF (NYSEARCA:GLD) below worth about $4.6 billion.

Here are some key points for AEM:

  • Current share price: $64.84
  • The 52 week range is $54.19 to $88.20
  • Earnings estimates for 2011: $2.52
  • Earnings estimates for 2012: $4.23
  • Annual dividend: 65 cents per share which yields 1%
  • Book value: $22.63 per share

SPDR Gold Shares (GLD) is an exchange traded fund that tracks the price of gold bullion. This ETF is one of the largest investments made by Paulson's funds.

Here are some key points for GLD:

  • Current share price: $168.42
  • The 52 week range is $118.71 to $185.85
  • Earnings estimates for 2011: Not applicable
  • Earnings estimates for 2012: Not applicable
  • Book value: n/a

Energy Transfer Equity (NYSE:ETE) is natural gas pipeline company. The CNBC article above states that Paulson bought shares worth about $182 million in this past quarter.

Here are some key points for ETE:

  • Current share price: $36.61
  • The 52 week range is $33.21 to $47.34
  • Earnings estimates for 2011: $1.59
  • Earnings estimates for 2012: $2.11
  • Annual dividend: $2.50 per share which yields 6.5%
  • Book value: n/a

Data is sourced from Yahoo Finance. No guarantees or representations are made. Hawkinvest is not a registered investment advisor and does not provide specific investment advice. The information is for informational purposes only. You should always consult a financial advisor.

Disclosure: I am long HIG.