Steven Cohen is one of the legendary traders. This billionaire was ranked as the 35th richest man in America, according to Forbes. As of September 2011, he has an estimated net worth of $9.3 billion. He was graduated from Wharton with a B.S. in economics and worked in the options arbitrage department at Gruntal & Co. after graduation. He made $8,000 profit on the first day of the job and he eventually go on to make the company about $100,000 per day. He ran his own trading group at Gruntal for about eight years before he launched his own company, SAC Capital, in 1992. Based in Stamford, Connecticut, SAC uses both fundamental and quantitative analysis based approaches. The fund was started with $20 million of Cohen’s own money, and now it manages around $15 billion.
We encourage investors to focus on the best stock picks of the smartest investors in the world, such as Cohen. One of the ways to identify the best stocks in Cohen’s portfolio is to find out the stocks with high upside potential. Below we compiled a list of top 20 stocks in Cohen’s latest 13F portfolio that have high upside potential. All companies have market cap of over $2 billion and average analyst recommendation of buy or strong buy (2=buy and 1=strong buy).
Company Name | Ticker | Value | Activity | Analyst |
BAKER HUGHES INC | 160076 | 170% | 1.9 | |
HESS CORP | 120305 | 74% | 1.9 | |
PLAINS EXPLORATION | 119202 | 5% | 1.9 | |
APPLE INC | 99527 | -56% | 1.7 | |
LIBERTY CAPITAL | LCAPA | 84700 | 140% | 1.9 |
UNITED TECHNOLOGIES | 77856 | 11895% | 1.8 | |
E N S C O PLC | 74765 | -38% | 1.9 | |
UNION PACIFIC CORP | 70379 | 3832% | 1.8 | |
CONSOL ENERGY INC | 66805 | 24% | 1.8 | |
GREEN MOUNTAIN COFFEE | 58635 | -42% | 1.9 | |
ANADARKO PETROLEUM | 58473 | -36% | 1.9 | |
MACYS INC | 58134 | -46% | 1.9 | |
THERMO FISHER SCIENTI | 53253 | -3% | 1.7 | |
COVIDIEN PLC | 51277 | -39% | 1.7 | |
SCHLUMBERGER LTD | 50672 | -11% | 1.8 | |
AVAGO TECHNOLOGIES | 47062 | 399% | 1.7 | |
DANAHER CORP | 46429 | 567% | 1.7 | |
LIBERTY MEDIA CORP | 43677 | -66% | 1.9 | |
QUALCOMM INC | 43390 | 4150% | 1.9 | |
A E S CORP | 38998 | 13% | 1.5 |
The largest position in Cohen’s portfolio with high upside potential is Baker Hughes Inc (BHI). SAC Capital reported to own $160 million worth of the stock at the end of September, up 170% from the end of June. The average analysts’ estimate for this stock is 1.9. BHI was up 10.86% so far since the end of the third quarter, beating the 6.10% for SPY. The second largest position is Hess Corp (HES). Cohen increased his stakes in this stock by 74% over the third quarter. At the end of September, his SAC Capital invested $120 million in HES. HES returned 9.4% since the end of September, outperforming the market by more than 3 percentage points. Cohen also invested nearly $120 million in Plains Exploration & Production Company (PXP). The stock soared 47.82% since September 30, heavily beating the market by over 40%. Ken Griffin and D. E. Shaw were also bullish about PXP.
During the third quarter, Cohen significantly increased his stakes in United Technologies Corp (UTX). According to the latest 13F of SAC Capital, the fund had $79 million invested in UTX at the end of the third quarter, up 11895% from the end of the second quarter. UTX returned 4.36% since the end of September, lower than the 6.10% for SPY, but the analysts are quite bullish about UTX. Their average recommendation score for UTX is 1.8.
Cohen also largely increased his position in Union Pacific Corp (UNP) by 3832%. At the end of the third quarter, SAC Capital had $70 million invested in UNP. The stock gained 22.26% since the end of September, outperforming the market by more than 16 percentage points. Ken Fisher had $283 million invested in UNP shares.
Other stocks in Cohen’s portfolio with high upside potential include Apple Inc (AAPL), Liberty Capital (LCAPA), ENSCO Plc (ESV), Consol Energy Inc (CNX), and Green Mountain Coffee Roasters (GMCR). Green Mountain went as low as $34 in November but seems to get its groove back. We like Apple and energy related stocks the most in this group. Apple is trading like it is going to have low single digit growth rates over the next few years whereas analysts expect the stock to grow its earnings by around 20% annually over the next five years. Energy stocks are attractive because of the increasing demand from emerging markets. They also provide protection against a decline in the value of dollar which we expect to happen.
Disclaimer: This article is based on SEC filings made by the fund discussed in the article. The stock holdings reflect aggregate positions held by the fund at the end of the reporting period. The fund may have other positions in its portfolios or the positions may have changed dramatically since the end of the reporting period. The author isn’t affiliated with the fund and isn’t compensated by the fund. The opinions discussed in the article are solely Insider Monkey’s and the fund doesn’t recommend or endorse the stocks discussed in the article. Investors should contact an investment professional to tailor their portfolios for their investment goals, risk tolerance, and investment horizon.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
