Ken Griffin’s Citadel Investment Group has filed its 13F with the SEC for the reporting period of March 31. Griffin founded Citadel Investment Group in 1990 with a capital investment of $4.6 million. The fund manager now boasts an equity portfolio valued at an impressive $89.81 billion with his primary investment sectors being consumer discretionary, technology, and finance. During the first quarter of 2015, Griffin added 761 new stocks to his portfolio along with additional purchases in 3,712 stocks. Devon Energy Corp (NYSE:DVN), Dollar General Corp. (NYSE:DG) and Amazon.com, Inc. (NASDAQ:AMZN) are among the top stock holdings of the wealthy fund manager.
Hedge funds and other big money managers like Griffin tend to have the largest amounts of their capital invested in large- and mega-cap stocks like Apple Inc. (NASDAQ:AAPL) because these companies allow for much greater capital allocation. That’s why if we take a look at the most popular stocks among funds, we won’t find any mid- or small-cap stocks there. However, our backtests of hedge funds’ equity portfolios between 1999 and 2012 revealed that the 50 most popular stocks among hedge funds (mostly large- and mega-caps stocks) underperformed the market by seven basis points per month. On the other hand, their top small-cap picks performed considerably better, outperforming the market by 95 basis points per month. This was confirmed through backtesting and in forward tests of our small-cap strategy since 2012. The strategy, which involves imitating the 15 most popular small-cap picks among hedge funds has provided gains of more than 139%, beating the broader market by over 80 percentage points (see the details).
Devon Energy Corp (NYSE:DVN) is the top long position of Griffin, who holds 9.64 million shares valued at $581.35 million. The shares of the natural gas producer have grown 6.09% year-to-date despite its lower-than-expected first quarter 2015 earnings results. What made it an excellent quarter was the fact that the company exceeded its quarterly production guidance for the third time in a row. On the other hand, the oil and gas driller fell short of market expectations in terms of revenue and earnings. Devon Energy Corp (NYSE:DVN) reported revenue of $3.27 billion, well short of market estimates of $3.75 billion, while its earnings fell short of market expectations as well at $0.27 per share, missing the mark $0.05. The oil producer has bagged some large investors including First Eagle Investment Management, Millennium Management, and Ric Dillon‘s Diamond Hill Capital.
Dollar General Corp. (NYSE:DG) comes at number two in the equity portfolio of the Griffin. The billionaire’s position in Dollar General consists of 7.21 million shares with a market value of $543.13 million. The shares of discount retailer Dollar General have grown 3.84% year-to-date and the retailer has a current market cap of $22.62 billion. The retail chain is yet again in focus because of its poor health and safety standards as reported by the U.S. Department of Labor Occupational Safety and Health Administration on Monday. It is important to know that Dollar General Corp. (NYSE:DG) has been cited as many as 40 times for similar occurrences since 2009. In the mean time, the retailer has received a consensus rating of “Buy” by 21 brokerages with a 1-year price target of $78.38. With Dollar General currently trading at $72.88, the consensus price target suggests a modest potential upside of 7.5%. OZ Management, Glenview Capital, and Third Point hold major positions in Dollar General Corp. (NYSE:DG).
Amazon.com, Inc. (NASDAQ:AMZN) is another major investment of Griffin, the position being valued at $464.92 million and consisting of 1.25 million shares of the e-commerce giant. The shares of the online retailer have increased 36.57% year-to-date, and trade at $423.86. The online retailer has presented its contender for mobile display advertising in which it will compete with industry leader, Facebook Inc. The product is called “Advertise Your App on Amazon” and it will allow app developers to advertise their products on Kindle Fire tablets, Fire smartphones, and other Android devices. This could be an exciting advertising platform for app developers who have released their apps through the Amazon Store. Some of the primary investors of Amazon.com, Inc. (NASDAQ:AMZN) include Ken Fisher‘s Fisher Asset Management, Eagle Capital Management, and Lansdowne Partners.
