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Blackstone's Top Value Stocks

James Altucher

12/11/07 - 10:35 AM EST
When The Blackstone GroupBX went public this summer, the initial public offering dominated headlines, but since then, IPO shares of the hedge fund/private equity fund have dropped about 40%.

Many of the stocks owned by Blackstone Kailix Advisors LLC, the hedge fund arm of The Blackstone Group, however, are up for the year, and several are up substantially. It may be that investing in the best stocks that the hedge fund owns may offer a better investment play than investing in the stock of the hedge fund itself.

With that in mind, Stockpickr has reviewed all the stock holdings of Blackstone Kailix Advisors and extracted the stocks with the lowest price-over-earnings-to-growth ratios, compiling them in the Top Blackstone Group Stocks. Not all of these stocks are up for the year, but their low PEG ratios may make them nice values.

One of the Blackstone stocks with the lowest PEG ratios is NobleNE, a Texas-based oil and gas drilling services company with a low PEG of 0.6. The stock has a price-to-earnings ratio of 14 and a yield of 0.3%.

Noble is also owned by Clough Capital, a Boston-based hedge fund with $2.1 billion under management. Clough also owns SchlumbergerSLB, which has a PEG of 1.3, and TransoceanRIG, with a PEG of 0.8.

Another Blackstone stock with a low PEG is Continental AirlinesCAL, which has a P/E of 7 and a PEG of 0.6.

Continental also shows up in the portfolio of Westcore Select Fund, which specializes in mid-cap stocks. The fund, which has $2.8 billion under management, has generated an average annualized return of 17% for the past three years. Other stocks in the fund's portfolio include Constellation BrandsSTZ, with a 1.6 PEG, AMRAMR, with a PEG of 0.4, and Electronic ArtsERTS, with a PEG of 2.1.

Goldman SachsGS, with a PEG ratio of 0.7, is another Blackstone stock. Goldman has a P/E of 9 and a yield of 0.7%.

Goldman is also a favorite of Forbes columnist and money manager Ken Fisher, who also likes China MobileCHL, with a PEG of 1.4, and Baker HughesBHI, with a PEG of 1.4.

Got to Stockpickr.com for the Blackstone Stocks with the lowest PEG ratios as well as the entire Blackstone Kailix Advisors portfolio.