What Does Billionaire Ken Griffin’s Citadel See In Visa Inc (V)?

Page 1 of 2

We track quarterly 13F filings from hundreds of hedge funds, including billionaire Ken Griffin’s Citadel Investment Group (see Griffin’s stock picks). Even with the inherent delay in 13Fs (the most recent batch reports long equity positions as of the end of March), we think that there are still a couple ways to make use of the information. We’ve found that the most popular small cap stocks among hedge funds generate an average excess return of 18 percentage points per year, and think that more strategies are possible as well. The most recent filing can also be compared to the previous one to see what top managers were buying last quarter; we don’t recommend blindly following these picks, but they can be sources of potential ideas for further analysis. It turns out that Citadel more than doubled its holdings of Visa Inc (NYSE:V) between January and March, to a total of 1.4 million shares.

Visa Inc (NYSE:V)’s operating revenues grew by 15% in its most recent quarter (its fiscal Q2 ended in March of 2013) compared to the same period in the previous fiscal year, and despite rises in costs the company’s pretax income grew at the same pace. Earnings fell over the same time frame, but this was entirely due to a higher effective tax rate. Adjusted earnings per share are expected to rise considerably during the current fiscal year, to $7.48 (up from $6.20, which would represent a 21% increase); we’d note that significant buybacks took place in the first half of Visa’s fiscal year, potentially boosting EPS.

CITADEL INVESTMENT GROUPThe $7.48 figure gives a current-year earnings multiple of 24. Analysts continue to be optimistic about Visa’s prospects beyond that point, but the forward P/E is still 21. This indicates that the market expects high EPS growth to continue over the long term. We certainly like what the company has been doing recently, but this suggests that it would take the company a long growth period to prove undervalued at this price and so we’d be cautious here. Billionaire and Tiger Cub Andreas Halvorsen’s Viking Global reported a position of 2.6 million shares in Visa at the end of the first quarter of this year (find Halvorsen’s favorite stocks).

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
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 Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors 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 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!