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Three Stocks Hedge Funds Love

Stocks in this article: ENR ROC JOY

NEW YORK ( TheStreet) - If star hedge fund manager Alexander Roepers of Atlantic Investment Management has his way, these returns will keep "going and going."

Speaking at the Value Investing Congress, Roepers recommended several names, including battery and personal care products maker Energizer Holdings (ENR), which he mentioned last year as well. Since mentioning the stock as an investment idea, shares have returned 5%.

Roepers, whose fund takes stakes between 2% and 7%, and doesn't wage proxy battles, noted Energizer has a very shareholder friendly management team. The hedge fund legend thinks shares could reach as high as $100 in the next 6 to 12 months for a variety of reasons, including a strategic franchise, and predictable cash flows.

Energizer competes with P&G (PG) in the personal care products and shaving sectors, particularly after the latter's acquisition of Gillette.

Turning his attention away from Energizer, Roepers mentioned Rockwood Holdings (ROC), a specialty chemicals maker based in Princeton, N.J. Roepers sees shares reaching as high as $70 for a number of reasons, citing, in particular, its lithium division, which is growing 8% per annum. Lithium is one of the core themes of Roeper's analysis for being long Rockwood. Rockwood also has divisions involved in advanced ceramics, performance additives and surface treatment. Shares have gained just over 20% year-to-date.

Joy Global (JOY) is another name Roepers mentioned as a long investment idea. The surface and underground mining company has come under pressure recently with China's growth slowing, but Roepers thinks shares are worth $100 in the next year. He noted that Joy Global's major competitor, Bucyrus, was acquired by Caterpillar (CAT). Joy Global shares have vastly underperformed the major indices this year, losing 36.7%, compared to a near 15% gain in the S&P 500 and the Nasdaq's hike of more than 20%.

Roepers also mentioned two companies which trade in Europe, Clariant, which is based in Switzerland, and FLSmidth, an engineering service company.

-- Written by Chris Ciaccia in New York

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