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Billionaire Ken Griffin’s Top Five Shakeups: Apple Inc. (AAPL), McDonald’s Corporation (MCD), Comcast Corporation (CMCSA)

Billionaire investor and founder of Citadel Advisors, Ken Griffin, shook up his top five holdings during the fourth quarter. With some $115 billion of assets under management, it’s worth paying attention when Griffin is rearranging his portfolio to the extent he’s done for 4Q. This includes upping his stake in five large-cap stocks, including a couple cable picks and a real estate stock. Griffin founded Citadel in 1990, shortly after launching a convertible-bond arbitrage fund his sophomore year at Harvard. Before that, Griffin was trading options out of his dorm room as early as 1986 (check out Griffin’s cheap stock picks).


Citadel Advisor picks

Apple Inc. (NASDAQ:AAPL) was a 91% increase for Griffin last quarter and is now his largest stock holding. The tech giant has been in tumble mode since September last year, having fell close to 40%. However, with the selloff, the stock now carries a 2.5% dividend yield and Apple still remains the top tech stock loved by hedge funds (see all 10). For its last quarter earnings, Apple Inc. (NASDAQ:AAPL) showed revenue and earnings up nicely, while iPhone unit sales were up over 29% year over year and 84% sequentially. As well, iPad unit growth was up 48% year over year and 63% sequentially. One overlooked positive is that the company continues to open stores, having opened eleven new retail stores last quarter, including four in the fast growing China market. Revenues for its China segment reported a total revenue growth of 67% year over year.

The numbers don’t appear all that bad, right? The selloff by investors comes as the rate of growth appears to be slowing. Year over year 2011 sales growth was 66% and earnings growth was 83%, while 2012 growth was only 45% (revenue) and 59% (earnings). Other big news includes management’s lowered guidance for the current quarter, now expecting revenues in the range of $41 billion and $43 billion, whereas consensus had been $45 billion before the announcement (see why Warren Buffett would buy Apple).

McDonald’s Corporation (NYSE:MCD) saw Griffin up his shares owned by over 37,000% last quarter and has put the fast food stock as his second largest holding. Being the world’s largest fast food chain the company has a vast presence, which helps insulate it from slowdowns related to certain countries. What’s more is that McDonald’s still has room to grow, where it currently owns less than 9% of the $1 trillion global fast food market. McDonald’s also has a long-term target of 3% to 5% sales growth and 6% to 7% operating income growth irrespective of what macroeconomic conditions arise.

McDonald’s Corporation (NYSE:MCD) is also very good at returning capital to shareholders, including share repurchases and dividend payments. The company returned $5.5 billion to shareholders in the form of share repurchases and dividend payments in 2012. The fast food chain has a history of increasing dividends every year since the inception of its dividend payment in 1976, including its recent 10% hike in September 2012. The retail giant now has a 3.1% dividend yield (read more about McDonald’s big beat).

Comcast Corporation (NASDAQ:CMCSA) is Griffin’s fourth largest stock holding after a 108% from fourth quarter shares. Comcast has seen market infringement from the likes of wireless companies, including AT&T and Verizon, which have been snatching up Comcast video subscribers. During the fourth quarter, Comcast lost 7,000 video subscribers, compared to losing 17,000 in the prior-year quarter. Despite this, the company did manage to gain 341,000 high-speed Internet subscribers and 168,000 telephony customers. As far as rewarding shareholders, the Board has also decided to repurchase $2 billion in shares in 2013 and increased the dividend payout 16%; the stock now pays a dividend yielding 1.9%.

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