Hedge funds and mutual funds aren't the only organizations that manage money. University endowment funds also direct large amounts of investments.

In recent weeks, Stockpickr reviewed the portfolios of Harvard and Yale. This week, we look at the University of California system.

The various schools in the University of California system have a combined student body of more than 191,000 students, with the seventh-largest endowment in the U.S., according to the National Association of College and University Business Officers.

One of the stocks that the University of California thinks deserves a high enough grade to be worth buying is Exxon Mobil (XOM). On CNBC's "Fast Money" recently, Jeff Terranova said that Exxon is one of his top two energy picks for six to eight weeks into 2009, when he expects oil to start recovering. Last week, it was reported that it was hit with a $6.1 million fine for not reducing pollution at four of its refineries.

Exxon Mobil, which is rated a buy by TheStreet.com Ratings, has a price-to-earnings ratio of 8, which unfortunately is a bit high compared with the average P/E of its competitors, such as Chevron (CVX), with a P/E of 6, and BP (BP), with a P/E of 5. Exxon Mobil's price-earnings-to-growth ratio is 1.08 which is somewhat better than BP, with a PEG of 1.11, but not as good as Chevron's PEG of 0.7. Exxon pays a yield of 2.1%, which is fairly low compared with other oil multinationals.

Exxon Mobil is owned by Traxis Partners, a New York City-based hedge fund founded by noted trader Barton Biggs. Founded in 2003, the investment advisory firm specializes in global, multi-asset class investment strategies. Other stocks owned by Traxis include General Electric (GE), with a P/E ratio of 8 and a PEG of 0.9; DR Horton (DHI), with a forward P/E of 74; and Weatherford International (WFT), with a P/E of 5 and a very low PEG of 0.3.

Another stock owned by the University of California is Merck (MRK), the large pharmaceutical company. According to Jim Cramer, the stock could be benefiting from the weak dollar. The company recently announced that its restructuring strategy, which includes eliminating 7,200 jobs, is moving forward successfully and that it should reach its goal of $2 billion in revenues from India, China and other emerging markets. It is also developing a division called Merck BioVentures for producing biotechnology-based treatments and products. However, earlier in the month, the company came out with a lowered guidance, which is below analyst estimates. The stock has a P/E of 14, which is right in line with the large pharma industry average; its PEG ratio of 1.8 is very close to its competitors',
such as Sanofi-Aventis's (SNY) 1.7 PEG.

Merck is also owned by Eton Park Capital, which was founded in 2004 by former Goldman Sachs trader Eric Mindich. It has approximately $3.4 billion under management. Eaton Park also owns Merrill Lynch (MER), with a forward P/E of 6; Goodyear Tire & Rubber (GT), with a P/E of 5 and an extremely low PEG ratio of 0.12; and VeriSign (VRSN), with a forward P/E of 15 and a PEG of 1.23.

For more ideas, check out the Stockpickr.com portfolio of the top stocks of the University of California.

Posted on Dec. 21, 2008