Billionaire Ken Griffin’s Newest Stock Picks: ADT Corp (ADT), Gulfport Energy Corporation (GPOR)

CITADEL INVESTMENT GROUPThe end of earnings season does not mean the end of excitement for us at Insider Monkey; we keep our ears to the ground for the round of 13F filings that usually post during and after each quarterly earnings season. Hedge funds are required by the SEC to disclose many of their equity, option, and bond positions, and we analyze these documents to glean the most impactful information out of them each quarter. Our research has led us to find that the most popular small cap stocks amongst hedge funds have outperformed the market by 18 percentage points per year (learn more about this phenomenon here). Billionaire Ken Griffin of Citadel Advisors, LLC recently made his filing public; read on to see our take on his newest picks during Q4 2012.

Citadel’s quantitative investing model and $65bn in AUM enables the fund to trade and hold thousands of positions at a time. Out of the 790 new stocks purchased in the last quarter of 2012, ADT Corp (NYSE:ADT) was given the most capital, with 0.23% of portfolio devoted to the security company. ADT commands 25% of the market share of the $13bn industry in which it operates. The company reported earnings at the end of last month, delivering a 13% rise in net earnings year over year and announcing a $600m common stock buy back from Credit Suisse International. The stock is still trading at a 15% deficit to analyst’s one year price targets. Doug Silverman of Senator Investment Group holds over $200mm of ADT Corp (NYSE:ADT) (view his other holdings here).

Gulfport Energy Corporation (NASDAQ:GPOR) was Citadel’s second-largest new position. The independent oil and gas company has a relatively small market cap of $2bn and operates primarily in the Louisiana Gulf Coast and in the Permian Basin. GPOR announced a public offering of 7.75mm shares of common stock in mid-February; the dilution brought on a drop in share price, contributing to the -6.3% depreciation the stock has returned since the start of 2013. Despite the near-term fall, Wall Street has high hopes for GPOR and its future site production, with most analysts issuing a Buy rating for Gulfport Energy Corporation (NASDAQ:GPOR). Billionaire Jim Simons has a conservative $5.5mm invested (see his top picks here).

Autodesk, Inc. (NASDAQ:ADSK) is a strong player in the CAD (computer-aided design) industry with its comprehensive and knowledgeable business solutions. Despite missing every earnings announcement in 2012, ADSK managed to beat its latest announcement in February, which came on the heels of positive ratings acknowledgement from Wedbush, RBC Capital, and Goldman Sachs in January. Higher revenues and higher earnings versus the prior-year quarter set the precedent that ADSK would like to continue in 2013, as the company guided revenue growth for this fiscal year. Two Sigma Advisors beefed up its position substantially according to its most recent 13F (check out the fund’s portfolio here).

Which other stocks found their way into Citadel’s portfolio?

Cobalt International Energy, Inc. (NYSE:CIE) was another new oil and gas play for Citadel; contrary to GPOR, CIE’s main exploration areas lie in the Gulf of Mexico and in offshore West Africa. The stock has suffered through the past twelve months, losing 22% of its value, with a significant drop occurring in January after the announcement of a 40mm share secondary public offering. Despite this, Wall Street is once again bullish on many of these smaller exploration companies, advocating accumulation and projecting much higher price targets for the future. Citadel initiated this position as a corporate bond purchase. Dallas-based HBK Investments made a similar debt investment in CIE (see the fund’s top five positions here).

Textron Inc. (NYSE:TXT) was the fifth-largest new addition to Citadel’s portfolio, comprising 0.07% of the fund’s assets. Also a bond purchase, Griffin devoted $43mm towards the fixed income investment. Textron operates in a wide number of industries, including defense, finance, and aerospace (Cessna jets, Bell helicopters). The company’s recent Q4 2012 earnings announcement in January showed a slight miss on the surface, although net earnings gave a profit and revenue grew over the same quarter from last year. Billionaire Steve Cohen joins Griffin in holding TXT bonds (view SAC Capital Advisor’s full holdings here).

Disclosure: I do not own shares of any stocks mentioned in this article.

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!