We track quarterly 13F filings from hundreds of hedge funds, including billionaire Ken Griffin’s Citadel Investment Group. Even though the information in these filings is a bit old- the most recent 13Fs disclose many of a fund’s positions as of the end of March- there are still a few ways for investors to make use of it. We’ve found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year (learn more about our small cap strategy) and think that other strategies are possible as well.
Individual filings from top managers can also be screened according to a variety of criteria, including higher-yielding stocks, so that investors can be made aware of potentially interesting prospects for further research. Read on for our thoughts on the five largest holdings in Citadel’s 13F portfolio which pay dividend yield of 3% or higher at current prices and dividend levels (or see the full list of stocks the fund reported owning).
The fund cut its stake in Apple Inc. (NASDAQ:AAPL) by 38% but the consumer technology company was still one of Citadel’s ten largest positions by market value at about 640,000 shares. Following the decline in Apple Inc. (NASDAQ:AAPL)’s share price- down 28% in the last year- it has managed to meet our criteria with a current yield of 3%. The stock trades at 10 times trailing earnings, and given its cash balance it looks to us like the market has already priced in further earnings declines. Apple Inc. (NASDAQ:AAPL) regained its place as the most popular stock among hedge funds from AIG in the first quarter of 2013 (check out the full top ten list).
Griffin and his team were also selling McDonald’s Corporation (NYSE:MCD) but owned 2.6 million shares at the end of March. The current yield here is 3.2%, and with investors generally positive on quick service restaurants the trailing P/E is 18 despite the fact that recent reports have shown an essentially stagnant business at McDonald’s Corporation (NYSE:MCD). Defensive investors would note the combination of yield and limited market exposure; the stock’s beta is 0.3. The Bill and Melinda Gates Foundation Trust had close to 10 million shares in its portfolio per its own 13F (research more stocks the trust owns).