Steve Cohen's SAC Capital is a group of hedge funds considered by many to rank among the top investment firms in the world. In 2007, its International Fund was up a reported 13% for the year.At Stockpickr.com, we keep track of Cohen's stock moves with the SAC Capital portfolio. One position of SAC's worth keeping an eye on is Cabot ( CBT), the fund's second-largest position. Cabot is a maker of specialty chemicals and carbon black, which is by weight the biggest ingredient in making tires. The carbon black business may not be the most dynamic business, but it's a necessary one, and it supplies 90% of the company's current cash flow. Back in September, the board authorized the repurchase of 5 million shares of common stock. This massive increase brings the total number of shares authorized for repurchase to 10 million in total. Cabot, which trades near its 52-week low, has a forward price-to-earnings (P/E) ratio of 11. On valuation terms, I believe the stock could be undervalued by as much as 60%, as its business model is misunderstood. Cabot shares have been under pressure for some time, mostly due in part to its tire business. However, the global trend for auto sales and tire sales worldwide is up. When you factor together management's push into Asia, its carbon black business, its drilling-fluid business and the $20-per-share that the company's inkjet business is worth, Cabot shares should see some nice upside. Another one of SAC's holdings is Wyeth ( WYE), which just received Food and Drug Administration approval for the antidepressant Pristiq. Some analysts believe that Pristiq could help offset the loss of revenue the drugmaker will encounter when antidepressant Effexor, one of its top-selling drugs, loses patent protection in 2010. Cohen has been very active in the biotech sector, especially with Pharmion ( PHRM), which has a forward P/E of 50 and a P/E-to-growth (PEG) ratio of 10.3. Cohen has been actively talking with Pharmion management about the pharmaceutical company's operational plans. That suggests he believes there is much more value to unlock. Keep an eye on these as well as his other positions -- such as Albemarle ( ALB), Century Aluminum ( cenx), Mylan ( MYL), Armstrong World Industries ( AWI) and OM Group ( OMG) -- in the SAC Capital portfolio.