10 Best New Stock Ideas by Steven Cohen

BOSTON ( TheStreet) -- Need new investment ideas? Steven Cohen's SAC Capital hedge fund initiated 461 equity bets in the fourth quarter, including recent hot IPO Michael Kors Holdings ( KORS) and Reliance Steel ( RS).

Cohen's Stamford, Conn.-based hedge fund was founded in 1992 and has generated average annual returns of about 30% with a long-short equity strategy, according to The Wall Street Journal. As the largest investor in his own funds, Cohen usually earns more than $1 billion a year.

Steven A. Cohen (SAC Capital)

The hedge fund is known for its trading-oriented style in equities. For example, Cohen pared his position in Apple ( AAPL) during the third quarter before buying up more than 807,000 shares of the iPad and iPhone maker in the fourth quarter. Apple is now Cohen's largest wager with the position carrying a market value of nearly $432.7 million as of Dec. 31, displacing Tyco International ( TYC).

Cohen, who has been at the center of an investigation by the Securities and Exchange Commission involving insider trading, pushed forward with a whopping 331 new positions during the fourth quarter.

Hedge fund and investment managers who oversee more than $100 million are required to disclose their equity holdings, options and convertible debt on a Form 13F filed to the Securities and Exchange Commission within 45 days of the end of a quarter. Funds aren't required to report short positions betting on declines. Cohen ended the third quarter with 1,874 reported holdings with a market value of $13.7 billion.

>>View SAC Capital's Portfolio

The firm increased its ownership in 692 securities, including Starbucks ( SBUX) and Gilead Sciences ( GILD), and decreased positions in 711, including Praxair ( PX) and Netflix ( NFLX). Cohen liquidated 323 positions in stocks like American Tower ( AMT) and Finisar ( FNSR).

Interestingly, Gilead isn't counted as a new buy for Cohen as he previously held a tiny stake in the company. However, in the fourth quarter Cohen picked up 3.9 million shares, making it the fund's third-largest position with a market value of nearly $176 million.

Cohen's newest holdings are the ones most interesting to individual investors who want to follow his trading strategy. The following pages detail SAC Capital's 10 largest new equity positions in the fourth quarter, ranked by market value as of Dec. 31.


10. Wolverine World Wide ( WWW)

Company Profile: Wolverine World Wide is a maker of footwear and apparel under brand names like Wolverine, Cat Footwear, Harley-Davidson Footwear, Hush Puppies, and Patagonia.

SAC Capital's Investment: Cohen's fund bought 413,000 shares of Wolverine in the fourth quarter, which had a market value of $14.7 million as of Dec. 31.

Share Price Performance: Shares of Wolverine climbed 9% in 2011 and are up another 9.5% early into 2012, likely making this a small-but-winning position for Cohen's fund, depending on the purchase date.

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9. MDC Holdings ( MDC)

Company Profile: MDC Holdings is one of the largest regional homebuilders in the U.S.

SAC Capital's Investment: Cohen's fund bought 885,000 shares of the homebuilder in the fourth quarter, which had a market value of $15.6 million as of Dec. 31.

Share Price Performance: Like most homebuilders searching for a bottom, MDC shares were trampled in 2011, dropping nearly 40%. However, since Dec. 31, shares of MDC have rallied 50%.


8. Dunkin' Brands ( DNKN)

Company Profile: Dunkin' Brands is the franchisor of Dunkin' Donuts and Baskin-Robbins restaurants across the U.S. The company held its IPO in July.

SAC Capital's Investment: Cohen's fund bought 738,000 shares of Dunkin' in the fourth quarter, which had a market value of $18.5 million as of Dec. 31.

Share Price Performance: Since the Dunkin' IPO, shares are up 3%. After dropping sharply in November and December, shares have rebounded nearly 15% in 2012.

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7. Lone Pine Resources ( LPR)

Company Profile: Lone Pine Resources is an oil and gas exploration company with operations in Canada. The company was spun off from parent Forest Oil ( FST) in the second quarter.

SAC Capital's Investment: Cohen's fund bought 3.7 million shares of Lone Pine in the fourth quarter, which had a market value of $26.2 million as of Dec. 31.

Share Price Performance: Since the spin-off from Forest Oil, Lone Pine shares have plunged 40% through Feb. 15. However, the stock is up more than 6% since Dec. 31.


6. Comverse Technology ( CMVT)

Company Profile: Comverse Tech is a telecommunications software company, offering services like customer management, billing, and other communications services.

SAC Capital's Investment: Cohen's fund bought 4.3 million shares of Comverse in the fourth quarter, which had a market value of $29.6 million as of Dec. 31.

Share Price Performance: Comverse, which has struggled for years with an options backdating scandal that resulted in the stock getting booted from the Nasdaq in 2007, saw shares fall about 5% in 2011. The stock hasn't been a winner in 2012, either, falling another 8.1%.

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5. Carter's ( CRI)

Company Profile: Carter's is the producer and marketer of infant and children's apparel in the U.S. Its brands include Carter's and OshKosh.

SAC Capital's Investment: Cohen's fund bought 792,000 shares of Carter's in the fourth quarter, which had a market value of $31.5 million as of Dec. 31.

Share Price Performance: Carter's had a booming 2011, with shares surging more than 30% over the 12-month time period. The stock has continued its winning ways in 2012, rising another 8.4%.


4. Charter Communications ( CHTR)

Company Profile: Based in Missouri, Charter is the fourth largest cable network operator in the U.S.

SAC Capital's Investment: Cohen's fund bought 555,000 shares of Charter in the fourth quarter, which had a market value of $31.6 million as of Dec. 31.

Share Price Performance: Charter was a huge winner in 2011, rallying almost 50%. Already this year, shares are up another 8%. The rebound is stunning considering Charter emerged from Chapter 11 bankruptcy protection at the end of 2009.

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3. Shaw Group ( SHAW)

Company Profile: The Shaw Group is a provider of construction and infrastructure services to industries like power generation, processing, chemicals and emergency response.

SAC Capital's Investment: Cohen's fund bought 1.2 million shares of Shaw Group in the fourth quarter, which had a market value of $32.5 million as of Dec. 31.

Share Price Performance: Shaw Group was a dog in 2011, dropping more than 23%. A rebound may be in the offing, with shares up nearly 9% already this year.


2. Michael Kors Holdings ( KORS)

Company Profile: Named after its fashion designer founder, Michael Kors designs and sells women's apparel and accessories. The company held its IPO the week before the Christmas holiday.

SAC Capital's Investment: Cohen's fund bought 1.3 million shares of Michael Kors in the fourth quarter, which had a market value of $35.2 million as of Dec. 31.

Share Price Performance: Since the IPO, shares of Michael Kors are up a whopping 80%. Since the beginning of the year, the stock has climbed almost 60%, likely making this position a big winner for Cohen and SAC Capital.

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1. Reliance Steel & Aluminum ( RS)

Company Profile: Reliance Steel provides metals processing services and operates more than 200 metals service centers in the U.S., Canada, China, Mexico and several other countries.

SAC Capital's Investment: Cohen's fund bought 1.2 million shares of Reliance Steel in the fourth quarter, which had a market value of $61.5 million as of Dec. 31.

Share Price Performance: After the stock fell 5% in 2011, Reliance Steel shares have rebounded nearly 10% in 2012.

>>To see these stocks in action, visit the 10 Best New Stock Ideas by Steven Cohen portfolio on Stockpickr.

-- Written by Robert Holmes in Boston.

>To contact the writer of this article, click here: Robert Holmes.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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