Value investor Michael Price sports an outstanding track record as a money manager.
Price got his start with Max Heine at Mutual Series, where he became chairman and president in 1988. Ten years later he sold Heine Securities, the investment advisor to Mutual Series Fund, to Franklin Resources for $670 million. And in 2001, he started his own company, MFP Investors, which has about $1.6 billion under management. He is ranked 664 on
list of the world's billionaires.
Stockpickr has reviewed all of Price's stock holdings and compiled the
, basing the picks on the stocks' price/earnings-to-growth, or PEG, ratios. The PEG ratio measures the price-to-earnings (P/E) ratio in relation to the company's expected future earnings growth rate. The lower the PEG, the better the value, with a PEG below 2 considered very favorable. Price, who takes a value approach to investing, has several stocks with PEGs below 1.
At the top of the list is
. The investment firm, which has a very low P/E ratio of 4.9, and an excellent PEG of 0.6, recently delivered its latest quarterly dividend of 12 cents a share, which translates to a yield of 3% for investors. On Nov. 1, it filed a Form 8-K with the
Securities and Exchange Commission
disclosing a net asset value of some $15.21 per share.
MVC popped up on the
portfolio, due to the fact that two officers and four directors purchased $1.4 million worth of stock. Other stocks in that recent
Insider portfolio include
Barnes & Noble
, which has a PEG of 1.8, and
General Growth Properties
, with a PEG of 1.3.
American International Group
is another low-PEG stock held by Price. The world's largest insurance company just reported a 27% reduction in its third-quarter earnings, hurt by problems with the housing market and a tighter credit market. The stock has a P/E of 9.1, a PEG of 0.7 and a yield of 1.4%.
AIG is also in the portfolio of
, one of the most successful hedge funds. Its $5 billion Medallion Fund has provided an average annual return of 35% after fees since 1989. Renaissance also holds
Johnson & Johnson
, with a PEG of 1.7, and
, with a PEG of 2.1.
, with a PEG of 0.8, is another undervalued stock owned by Price. The oil company reported a quarterly earnings drop of 5.2% on a 4.3% fall in revenues for its latest quarter. The stock has a P/E of 13 and a yield of 2%.
Michael Price is in good company with ConocoPhillips, as
also owns the oil stock. Some of Buffett's other holdings are
, with a PEG of 0.8, and
, with a PEG of 1.7.
For the rest of these strong value stocks, check out the
. And for his entire holdings, see the
portfolio at Stockpickr.com.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider MVC Capital to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.
At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.
James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs a fund of hedge funds. He is also a weekly columnist for
The Financial Times
and the author of
Trade Like a Hedge Fund
Trade Like Warren Buffett
. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;
to send him an email.
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