Billionaire Ken Griffin’s Citadel Investment Group took severe losses during the financial crisis, but has climbed back above its high water mark and is earning profits for its investors again. We have already gone through Citadel’s 13F portfolio for the third quarter of 2012 (see Griffin's stock picks) and decided to look for common holdings between Citadel and CNBC host Jim Cramer’s charitable trust (which discloses its stock portfolio). Here are five stocks which both the hedge fund and the trust owned as of the most recent data:
Griffin and his team owned about 550,000 shares of Apple Inc. (NASDAQ:AAPL) and the technology company was one of Cramer’s picks as well. Apple Inc. (NASDAQ:AAPL) still looks like a good value to us, given that its trailing earnings multiple is only 12 and at least on a historical basis its growth rates look good. The valuation is low enough that even if Apple Inc. (NASDAQ:AAPL)’s growth slows considerably it should still be a good buy at the current price. Wall Street analysts are extremely bullish, with their projections for the next few years implying a five-year PEG ratio of 0.5. Apple was the most popular stock among hedge funds in the third quarter (here are the rest of the top ten).
Citadel moved heavily into Wells Fargo & Company (NYSE:WFC) and closed September with 5.2 million shares in its portfolio. Unlike many other big banks, Wells Fargo’s valuation is greater than its book value- specifically, the P/B ratio is 1.3- but it does have a reputation as a more reliable company and in terms of earnings it is quite cheap at 10 times forward earnings estimates. Wells Fargo is Warren Buffett’s favorite big bank as Berkshire Hathaway owned over 420 million shares; this made it the holding company’s second largest holding (find more of Buffett's favorite stocks).
General Electric Company (NYSE:GE) was another common pick between the two portfolios, and another stock that Citadel was buying a large stake in during the third quarter. Billionaire George Soros was adding shares as well, with 10.4 million shares at the end of September (check out more stocks Soros was buying). GE carries trailing and forward P/E multiples of 17 and 13, respectively. The recent financial performance isn’t particularly appealing, though the stock does boast a dividend yield of 3.6%. Given the company’s stability it might be of interest to income investors.
This popular tech stock was in both portfolios at the end of the third quarter: