While many hedge funds were deep in the red in 2015, Ken Griffin‘s Citadel Investment Group posted double-digit returns. The company’s main funds posted a return of 12.6% with $15 billion in assets under management, according to a report by Bloomberg. Citadel managed that by dividing funds among a number of teams that invested in a wide range of markets, while the biggest losers had concentrated portfolios and were stung by poor performers like Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and SunEdison Inc.
According to reports from Ken Griffin’s recent divorce proceedings, the famous hedge fund manager has a gross monthly salary of nearly $100 million, or roughly $68.5 million after taxes. A man that gets paid this much to manage assets is definitely worthy of our time. So, in this article, we’ll look at some of the most bullish moves made by the fund last quarter, according to its latest 13F filing.
Imitating hedge funds and other institutional investors can help identify some of the most profitable stocks on the market. However, our extensive research that covered the period between 1999 and 2012, showed that the best approach is to follow these investors into their small-cap stocks. Our backtests showed that the 15 most popular small-cap stocks among hedge funds managed to generate a monthly alpha of 81 basis points, versus an alpha of 0.7 percentage points posted by their top 50 large-cap picks (see more details here).
Big Bet On Cable
Number five on our list of Citadel’s most bullish moves is Charter Communications, Inc. (NASDAQ:CHTR), now the second-largest cable operator in the United States. During the second quarter, the fund’s stake was increased by 245% to 1.41 million shares worth $322 million. Following the takeover of Time Warner Cable, Charter Communications, Inc. (NASDAQ:CHTR) became one of the favorite stocks among the hedge funds followed by Insider Monkey. At the end of June, 134 of those funds were invested in the company, up from 98 a quarter before. Chase Coleman, the manager of Tiger Global Management, is also bullish on this stock, having more than doubled his bet on it to 4.25 million shares, making it his fund’s second-largest public equity position at the end of the quarter. Through the acquisition of Time Warner Cable, Charter Communications, Inc. (NASDAQ:CHTR) has joined the big boys of the cable business. For the second quarter, the company posted earnings of $15.17 per share on the back of $6.16 billion in revenue. Charter Communications said its second quarter performance was driven by growth in internet, commercial and video revenue.
Biotech Poised for Rebound?
Next up is Biogen Inc (NASDAQ:BIIB), the biotechnology company that develops treatments for neurodegenerative, hematologic and autoimmune diseases. According to its 13F filing, Citadel boosted its holding in the stock by 300% over the course of the second quarter, having indicated ownership of 1.36 million Biogen shares in its latest 13F filing, a position valued at approximately $328 million. Biogen Inc (NASDAQ:BIIB)’s drug Tecfidera is a leader in the $19 billion multiple sclerosis drug market. In the second quarter, the company registered a 12% increase in sales of Tecfidera despite FDA warnings regarding some of the side effects of the drug. Biogen also has two major drug candidates for the treatment of Alzheimer’s disease and spinal muscular atrophy which are still in the testing phase. Overall, hedge fund interest in Biogen Inc (NASDAQ:BIIB) was on the rise in the second quarter, as the number of hedge funds in our system long the stock jumped to 73 at the end of the second quarter, from 64 registered three months earlier. Tiger Cub Andres Halvorsen is also betting big on this stock, having increased his fund’s holding by 1,291% to 3.21 million shares worth close to $776 million in the quarter.
Turn the page to take a look at Ken Griffin’s three most bullish second quarter moves.