market folly

Market strategist Jeff Saut's latest commentary is out and he focuses on some of his favorite investment ideas. They are:

Wiliams Companies (WMB): He writes that, "Our bullish thesis on Williams is supported by three main points: (1) we believe the company's E&P assets will garner a higher valuation in the market place as a stand-alone entity when the company splits itself into two parts; (2) we believe the market is undervaluing Williams' ownership of the Williams Partner GP, and (3) we expect strong growth from the Canadian midstream assets."

Market Folly readers will recall that Dan Loeb's Third Point outlined this exact WMB thesis as well, as the stock seems to be a hedge-fund-favorite.


Clayton Williams (CWEI): Saut notes, "What does set Clayton Williams apart from the rest of the group is its highly oil-weighted production profile (74%), growing position in high-return oil plays (namely the Permian and Delaware Basin), and cheap valuation. Raymond James Analyst John Freeman last week reiterated his Outperform rating on Clayton Williams and stated that he viewed any pressure in the stock as a buying opportunity."

In his commentary, Saut also explains the rationale behind bullishness on shares of Iberiabank (IBKC), and Equinix (EQIX).

He also points out some of the latest hedge fund moves from 13F filings. While he notes that HCA Holdings (HCA) was one of the largest new buys in the past quarter, he fails to mention that it was because the company had its initial public offering. To see what hedge funds have been buying, we of course point you the new 91-page issue of our Hedge Fund Wisdom newsletter.

For Saut's favorite stocks, you can download a .pdf copy here.