J.C. Penney Company, Inc. (JCP), Lexmark International Inc (LXK) & More: Hedge Funds Have Been Busy

Billionaire Ken Griffin’s Citadel Investment Group has bought additional shares of Halcon Resources Corp (NYSE:HK), giving the fund a total of over 18 million shares in its portfolio. See Griffin’s stock picks. Halcon Resources Corp (NYSE:HK) is a $2.5 billion market cap oil and gas exploration and production company; despite the fact that its production mix is about 70% oil (which currently has a more favorable market environment than natural gas), it experienced an operating loss in 2012 due to higher costs. The forward earnings multiple is only 9, but we think that we would prefer to look at other shale E&P companies such as Continental Resources, Inc. (NYSE:CLR) and Kodiak Oil & Gas Corp (USA) (NYSE:KOG).

Citadel has been buying another exploration and production company with a focus on shale plays, disclosing ownership of 1.9 million shares of Carrizo Oil & Gas, Inc. (NASDAQ:CRZO). This was up from only about 15,000 shares at the end of December. 80% of the company’s revenue comes from oil, and Carrizo Oil & Gas, Inc. (NASDAQ:CRZO) has managed better results in the last year than Halcon with net income increasing 51% in 2012. At its current price the stock carries trailing and forward P/Es of 18 and 10, respectively, showing that analysts are bullish on the business’s prospects.

ZHONGPIN INC. (NASDAQ:HOGS), a Chinese meat products company, rounds out our list as Brian Taylor’s Pine River Capital Management now owns 3.3 million shares. ZHONGPIN INC. (NASDAQ:HOGS) is an acquisition target, and is currently trading at considerably less than the proposed transaction price; the transaction is expected to close within the next few months, though the closing date has been pushed back from Q1. We have estimated an unlevered return of about 5% if the transaction does go through. It would be important to look into any factors which might scrap the acquisition, though that return is high for a merger arb situation if a deal does happen in the near future.

Disclosure: I own no shares of any stocks mentioned in this article.