Israel Englander is the founder of Millennium Management. He was once enrolled in the MBA program at New York University. However, he dropped out of the program to work on Wall Street. Later he started Millennium with $35 million in 1989. By 2005, the fund returned 17% per year and its size had grown to $8 billion. Today, its 13F portfolio has a value of nearly $10 billion and Englander is one of the top paid fund managers. According to Forbes, he is the 651st richest person in the world, as of September 2011.
Here we are going to take a look at the low P/E stocks that Englander?s Millennium is bullish about. All companies have at least $10 billion market cap and P/E ratios lower than 10. The market data is sourced from Finviz. As of September 30, 2011, Millennium had at least $20 million invested in these position:
Company Name | Ticker | Value | Activity | P/E |
APACHE CORP | APA | 36954 | 407% | 9.36 |
VALERO ENERGY CORP | VLO | 32689 | 24% | 5.22 |
FREEPORT MCMORAN | FCX | 32515 | 123% | 6.96 |
CITIGROUP INC | C | 27909 | -42% | 7.65 |
DISCOVER FINANCIAL | DFS | 27383 | -37% | 5.99 |
JPMORGAN CHASE & CO | JPM | 26702 | 15% | 7.45 |
MARATHON PETE CORP | MPC | 25573 | New | 4.49 |
MOSAIC CO. | MOS | 23068 | 176% | 8.52 |
AETNA INC NEW | AET | 22134 | 62% | 9.15 |
C F INDUSTRIES HOLDINGS | CF | 21141 | 8% | 8.69 |
The largest low P/E position in the latest 13F portfolio of Millennium is Apache Corp (APA). At the end of September, Millennium had $37 million invested in Apache, which returned 20.36% so far since the end of the third quarter. During the same period, the market returned 13.57%. Apache beat the market by nearly 7 percentage points. The stock has a market cap of $37B and a P/E ratio of 9.36. As of September 30, there are 30 hedge funds with Apache positions in their portfolios. In addition to Millennium Management, Ric Dillon?s Diamond Hill Capital, Boykin Curry?s Eagle Capital Management and Jim Simons? Renaissance Technologies also reported to own Apache at the end of September.
One mega-cap stock with low P/E ratio that Englander is bullish about is JPMorgan Chase & Co (JPM). During the third quarter, Englander boosted his stakes in JPM by 15%. At the end of September, Millennium had $27 million invested in JPM. The stock has a market cap of $133B and a P/E ratio of 7.45. It returned 17.91% since the end of the third quarter, versus 13.57% for SPY in the same period. JPM is also quite popular among hedge funds. At the end of September, Lee Ainslie?s Maverick Capital had $211 million invested in JPM. John Paulson?s Paulson & Co, and Jim Simons? Renaissance Technologies also both invested $100+ million in this stock.
Other large-cap low P/E stocks that Englander loves include Valero Energy Corp (VLO), Freeport McMoran Copper & Gold (FCX), Citigroup Inc (C), Discover Financial Services (DFS), Marathon Pete Corp (MPC), Mosaic Co (MOS), Aetna Inc (AET), and CF Industries Holdings Inc (CF). Stocks with low P/E ratios may have low PE ratios for a reason. One of the ways of picking good low PE stocks is analyzing the stock picks of successful hedge fund managers like Israel Englander.
Disclosure: I am long C.
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