Self-made billionaire Ken Griffin of Citadel Investment Group has significantly increased his stake in Ruckus Wireless Inc (NYSE:RKUS) according to a recent 13G form filed with the Securities and Exchange Commission. The massive $176 billion investment firm has increased its stake in the $957.39 million telecommunications company to 4.69 million shares, up from 632,200 that it reported previously. The new stake amasses 5.4% of Ruckus Wireless’ outstanding shares.
Citadel is a managed futures fund renowned for its secretive and complicated computer algorithms that have helped the fund achieve exceptional returns. Hard hit by the financial crises, Citadel lost about 55% of its value during those trying times. However Griffin got back to the business of making money and by the start of 2012 he had made up for the losses. While most hedge funds struggled last year, Citadel’s equity fund generated whopping 23% returns. The market value of the fund’s public equity portfolio rose to $89.8 billion at the end of the first quarter from $83.07 billion in the quarter before. The consumer discretionary and technology sectors each contributed 22% and 19% to the portfolio value.
Most investors don’t have enough time to do in-depth analysis on each stock that they want to include in their portfolios. Professional investors like Ken Griffin spend weeks conducting due diligence on each company and spend millions obtaining information and paying the salaries of Ivy League educated analysts. That’s why we have always believed that imitating the stock picks of hedge funds and billionaires is an excellent short cut we can take. It doesn’t cost an arm and a leg either. We analyzed the historical stock picks of these investors and our research revealed that the small cap picks of hedge funds performed better than the market and their large-cap picks. A portfolio of 15 most popular small caps among several hedge funds outperformed the S&P 500 Total Return Index by 95 basis points per month between 1999 and 2012. The exceptional results of this strategy got even better in the forward tests we have been conducting since the end of August 2012. The most popular small-cap stocks among hedge funds beat the market by more than 84 percentage points since then, returning 144.4% (see the details here).
The operations of Ruckus Wireless Inc (NYSE:RKUS) involve providing ‘Smart WiFi’ products to mobile carriers, broadband service providers, and corporate enterprises. Its financial results for the first quarter fell short of estimates, with earnings per share (EPS) of $0.07 and revenues of $82.08 million missing the $0.08 EPS and $85.62 million revenue marks expected of it. Moreover, Ruckus Wireless Inc (NYSE:RKUS)’s management provided a soft guidance for the second quarter with revenues falling in the range of $86 million to $91 million and EPS guidance falling between $0.07 and $0.10. The estimates were $90.7 million in revenues and $0.10 EPS. According to CEO Celina Lo, large enterprise deals in the U.S. are taking longer than expected, but are not lost to competitors. The company hopes that its recent move to improve its sales execution in the form of the appointment of new Chief Commercial Officer, Ian Whiting, will solve this problem in the future.