From Asian Internet stocks, which have boomed over the last year, to food and paper products companies, prominent hedge fund investors listed their favorite stocks on Thursday at an industry meeting dominated by talk of where markets will move.
John Burbank stuck with the Chinese Internet stocks that helped boost returns at his $3.8 billion Passport Capital last year. Real estate Internet portal Soufun Holdings, which climbed 121 percent in the last year, and discount online retailer Vipshop Holdings, which climbed 417 percent in the last year, made the list as his favorites.
"I am not negative on U.S. Internet companies but China is trading at a bigger discount," Burbank said at the annual SkyBridge Alternatives Conference known as SALT.
Burbank, whose picks have long included international companies and who taught in English in China decades ago, said "China is fundamentally changing and there is something to bet on." This year Burbank's flagship fund is up 0.5 percent through April, a person familiar with the number said.
Leon Cooperman, who runs $10.5 billion Omega Advisors, still likes banking company Monitise, listing it for the second straight year as a favorite and saying that its price can double in a year.
Cooperman also sounded a more positive note on the U.S. stock market at a time some other prominent hedge fund managers have issued a note of caution about how much higher equities can move. Although stocks moved to record territory earlier this week, the S&P 500 has been struggling to move meaningfully higher this year after gaining 30 percent last year.
He said U.S. stock prices are not a bargain but noted that the market "isn't priced to perfection" either, forecasting that the S&P 500, now trading at 1,870 could end the year at 2,000.
Steve Kuhn, head of fixed income trading at $14 billion Pine River Capital Management, advised selling out of bonds and moving into low volatility stocks, calling these types of companies "boring but beautiful."
He included food company ConAgra and paper and packaging manufacturer Rock-Tenn as picks. With Rock-Tenn he joked "this is a company that will not be disinter- mediated by Google."
Cooperman said stocks are still the best alternative among financial assets and likened investing in U.S. government bonds to trying to walk in front of a steamroller to pick up a dime.
Meanwhile Michael Novogratz, a principal at Fortress Investment Group, said that a sizable bet against U.S. Treasuries "makes sense."
(Editing by Eric Walsh)