Qualcomm, Inc. (QCOM), Aflac, Dollar General: Ken Griffin’s Picks That Can Pop

Page 1 of 2

CITADEL INVESTMENT GROUPBillionaire and founder of Citadel Investment Group – Ken Griffin – started out trading options in his college dorm room and now manages one of the largest hedge funds in the world. In reviewing Citadel’s most recent 13F filing, we have found five stocks that Griffin owns that can pop in the interim. These stocks have large upside potential, as determined by their long-term earnings growth expectations and current valuation, based on P/E ratios (check out Ken Griffin’s latest picks).

Qualcomm, Inc. (NASDAQ:QCOM) has a PEG of 1.0 and also pays a modest dividend yielding 1.6%. At a trailing P/E of 18x and a forward P/E of only 13x, Qualcomm is one of the great growth and value stories in the semiconductor industry – especially when compared to major peers Broadcom (26x trailing P/E) and Texas Instruments (21x trailing P/E). The semiconductor company is expected to see revenues up 25% in FY2013 due to increased demand for high-end chips.

The long-term demand for Qualcomm’s chipsets, meanwhile, will be a strengthening economy that should drive an increase in consumer spending, notably on smartphones. What we believe is one of the underappreciated growth drivers is Qualcomm’s newest chipset, Snapdragon, which gives the chipmaker exposure to the popular iPhone model that Intel previously had a stranglehold on. Billionaire George Soros is one of this tech company’s big-name supporters (check out George Soros’ new picks).

Citadel increased its Aflac Incorporated (NYSE:AFL) stake by 350% last quarter. This insurer has a dividend yielding 2.6% that is a payout of only 22% of earnings. Following the Japanese earthquake and tsunami, Aflac saw steep sales pressures due to the fact that over 70% of revenues are derived from the region. Sales are now expected to rebound in the high single digits from 2012 and 2013, with U.S. sales helping carry the company – up 5.2% year over year in 3Q.

From a valuation standpoint, Aflac is attractive with a PEG of 0.8 and trading at a mere 9x earnings. When looking at Aflac’s zero-debt balance sheet, strong dividend yield, and solid 5-year expected earnings CAGR (10%), it’s easy to see why the company is one of Ken Griffin’s deep value-high upside picks.

GNC Holdings Inc (NYSE:GNC) saw Citadel increase its stake in the vitamin and nutrition retailer by 80% in 3Q. GNC is the cheapest of Citadel’s five stocks listed here, trading at a PEG of only 0.7. This is due in part to the vitamin company’s industry-leading 5-year expected earnings CAGR of 22%. GNC trades – at a 16x P/E – well below top peer Vitamin Shoppe’s 29x earnings valuation. The specialty retailer is also cheap on a P/S basis, at 1.4x compared to Vitamin Shoppe’s 1.9x. Jim Simons is one of GNC’s key investors alongside Griffin (see Jim Simons’ latest picks).

Continue reading to check out two of Ken Griffin’s most promising growth names…

Page 1 of 2
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 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

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!