ConAgra Foods Inc., Paramount Group Inc, Altera Corporation: Billionaire Ken Griffin’s Biggest New Bets

Ken Griffin runs one heck of a prolific hedge fund at Citadel Advisors. The fund held 7,945 positions at the end of 2014, worth $82.66 billion, up $2.45 billion from the end of the past quarter. Of those nearly 8,000 positions, 924 of them were new positions, opened during the fourth quarter of 2014, while Griffin also made additions to 3,440 of the existing positions. That compared to 666 positions that were closed, and 3,497 existing positions that were trimmed. Let’s take a look now at the biggest of those new positions, to see which new stocks caught Griffin’s eye the most in the fourth quarter.

Ken Griffin

First up is ConAgra Foods Inc. (NYSE:CAG), in which Griffin’s new position of 3.79 million shares vaulted him right to the top of the charts among funds we track. While the $137.47 million stake only amounts to 0.16% of Griffin’s portfolio, it’s nonetheless a big move into the packaged foods company, which counts Hunt’s, Orville Redenbacher’s, and Chef Boyardee among its brands.

ConAgra Foods Inc. (NYSE:CAG) enjoyed a strong run to close out 2014 after dipping over 22% between August 2013 and February 2014, as the company suffered through weaker sales and scrutinizing during the GMO controversy at the time. ConAgra regained 30% over the final ten months of the year, and 10% over the final three months, despite revenues from its fiscal 2015 second quarter slipping beneath those of the previous year.

Where the attraction in ConAgra Foods Inc. (NYSE:CAG) appears to lie is in its burgeoning frozen potato business, with the American company announcing a partnership with Netherlands-based Meijer Frozen Foods in December, which will see them invest $150 million in potato processing operations in that country to greatly increase their overall capacity. It also recently opened a new plant in China. The frozen potato market is expected to grow by 1.8 billion pounds over the next four years.

Next is Paramount Group Inc (NYSE:PGRE), in which Griffin opened a new position with 6.20 million shares, which also placed him on top of the shareholder list among funds we track, despite it only equalling 0.13% of his portfolio. The real estate investment trust (REIT) owns and operates 18 office properties in three key U.S cities: New York, San Francisco, and Washington, D.C.

Paramount Group (PGRE)

The company, originally founded by German Werner Otto to invest some of the growing wealth from his mail-order business OTTO (which is now one of the largest e-commerce sites in Germany), into American real-estate. The company dates back to the 1970’s, but did not go public until the fourth quarter of 2014, launching a record IPO for a REIT of $2.3 billion. Shares rose an additional 3.9% on IPO day to $18.18 from the IPO price of $17.50, and have since risen another 3.25% to $18.77.

Paramount Group Inc (NYSE:PGRE) was a popular IPO among funds we track, with 15 of them taking a position on IPO day or between then (November 19) and the end of 2014. John Khoury’s Long Pond Capital was the boldest, totalling 3.29 million shares, which represented 3.65% of his portfolio. Discovery Capital’s Rob Citrone had 2.04 million shares.

Last is Altera Corporation (NASDAQ:ALTR), which Griffin opened a position on with 1.89 million shares, the value of which was equivalent to 0.08% of his portfolio. This new position did not make him the largest current shareholder among funds we track, as that honor went to Boykin Curry’s Eagle Capital Management, which held 10.54 million shares. Overall fund activity was bullish, with fund ownership increasing to 27 from 23, but more importantly, fund investment increasing to $1.66 billion from $1.29 billion, a 29% increase.

Altera Corporation (NASDAQ:ALTR) has undergone a choppy three-year period, which has seen shares remain mostly flat. The Silicon-valley circuit designer is known for its Field Programmable Gate Arrays (FPGA) and other circuit solutions. The FPGA market specifically is expected to grow to $9.9 billion by 2020, according to Grand View Research, and Altera’s latest high-performance FPGA, the Altera Arria 10, has been producing industry-leading levels of data center performance of up to 40 GFLOPS-per-Watt in testing conducted by Microsoft, according to an Altera press release today.

However, new entrants like new Silicon Valley rival Flex Logix could chip away Altera Corporation (NASDAQ:ALTR)’s market share, and the growth potential for 2015 appears limited, making Altera a better long-term investment than a short one. Shares are down 2.79% year-to-date.

Disclosure: None