In this article, we discuss the 5 stocks that Ken Griffin’s Citadel is piling into. If you want to skip our analysis of these stocks, go directly to Ken Griffin’s Citadel Is Piling Into These 10 Stocks.
5. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 279
Percentage Increase in Stake During Q4: 283%
Amazon.com, Inc. (NASDAQ:AMZN) is a diversified technology company. Major hedge funds hold bullish positions in the stock. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN) with 4.1 million shares worth more than $13.9 billion.
According to the latest 13F filings, Citadel owned 317,175 shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of December 2021 worth $1 billion, representing 0.21% of the portfolio. The company has been in the Citadel portfolio since late 2010.
In its Q1 2021 investor letter, Hayden Capital, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN):We sold our last remaining stake in Amazon this quarter. Amazon was our longest-running investment holding, after having originally purchasing it at the inception of Hayden in 2014, at a price of ~$317.
I gave some details of how Amazon has progressed over these past 6.5 years in last year’s Q2 2020 letter, which partners can find here (LINK). The company has executed amazingly well over this tenure, with revenues up ~3.3x and since our initial purchase, and reported operating income up ~30x over that period.
Generally, I believe there are three reasons to sell an investment:1) we recognize our initial thesis is wrong (sell out as quick as possible), 2) we have a significantly higher returning opportunity to redeploy the capital into (sell-down to fund the new investment), or 3) the company is maturing and hitting the top part of it’s S-curve / business lifecycle, so the business has fewer places to reinvest its capital internally. As such, the future returns will likely be lower than the past. This investment thus becomes a “source of capital” in the future, as we fund earlier-stage investment opportunities.
In the case of Amazon.com, Inc. (NASDAQ:AMZN), we decided to sell due to the third scenario. I’m sure Amazon will continue to generate value for shareholders and continue to keep pace with the broader technology sector. However, I’m just not confident it’s as attractive an investment as when we first invested.
With ~51% of US households having an Amazon Prime account (and with very low churn), each of these households continuing to increase their annual spend with Amazon, and few / no real competitors in sight, Amazon is a dominant force that will only continue to accrue value as consumers continue to move from offline to online purchases for their everyday needs. Likewise, the “cash-flow machine” of Amazon Web Services is in a similar position of strength, with AWS now having ~32% market share and continuing to grow at +30% y/y. Because of this, I think Amazon.com, Inc. (NASDAQ:AMZN) is probably one of the safest investments in the technology sector today.
So why did we decide to sell the investment then? Simply put, Amazon is …”(read the entire letter here)
4. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 62
Percentage Increase in Stake During Q4: 35%
Broadcom Inc. (NASDAQ:AVGO) is a semiconductor manufacturer. Regulatory filings reveal that Citadel owned PUT options on over 1.5 million shares of Broadcom Inc. (NASDAQ:AVGO) at the end of December 2021 worth $1 billion, representing a very small portion of the portfolio.
Broadcom Inc. (NASDAQ:AVGO) remains a top chip stock on Wall Street. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Cantillon Capital Management is a leading shareholder in Broadcom Inc. (NASDAQ:AVGO) with 1 million shares worth more than $669 million.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Broadcom Inc. (NASDAQ:AVGO) was one of them. Here is what the fund said:
“A good way to conceptualize how we think about portfolio construction is to picture a pyramid. At the bottom of the pyramid are the durable compounding growth companies that form the strong foundation, resilience and consistency for the Strategy. We think these companies should comprise just under half of portfolio assets and feature annual revenue growth rates ranging from two times GDP up to 20% as well as healthy free cash flow generation.
Broadcom Inc. (NASDAQ:AVGO) has delivered similar long-term appreciation through a combination of organic growth, capital deployment into new and adjacent opportunities through merger and acquisition activity as well as returning capital to shareholders through buybacks and dividends.”
3. Moderna, Inc. (NASDAQ:MRNA) CALL
Number of Hedge Fund Holders: 43
Percentage Increase in Stake During Q4: 29%
Moderna, Inc. (NASDAQ:MRNA) operates as a biotech firm. Hedge funds have been offloading the stock in recent months as the pandemic wanes. At the end of the fourth quarter of 2021, 43 hedge funds in the database of Insider Monkey held stakes worth $3.8 billion in Moderna, Inc. (NASDAQ:MRNA), compared to 49 in the preceding quarter worth $7.3 billion.
Latest 13F filings show that Citadel owned CALL options on over 3.7 million shares of Moderna, Inc. (NASDAQ:MRNA) worth $955 million at the end of the fourth quarter of 2021. The company has featured in the Citadel portfolio since the first quarter of 2019.
In its Q2 2021 investor letter, Baillie Gifford, an asset management firm, highlighted a few stocks and Moderna, Inc. (NASDAQ:MRNA) was one of them. Here is what the fund said:
“Among the top contributors to Fund performance in the second quarter was Moderna. Moderna, Inc. (NASDAQ:MRNA) has just reported its first profitable quarter in the company’s history – net income for the most recent quarter was $1.2 billion. It reported revenue of $1.9 billion, an impressive increase compared to $8 million a year ago, driven by the sales of its Covid-19 vaccine. Moderna, Inc. (NASDAQ:MRNA) is expecting to deliver up to 1 billion vaccine doses in 2021 and is in discussions to increase global supply to governments around the world. Our long-term focus remains on the transformational potential of Moderna’s technology and its ability to address different diseases.”
2. Meta Platforms, Inc. (NASDAQ:FB)
Number of Hedge Fund Holders: 224
Percentage Increase in Stake During Q4: 99%
Meta Platforms, Inc. (NASDAQ:FB) is a diversified tech firm. According to the latest data, Citadel owned 2.4 million shares of Meta Platforms, Inc. (NASDAQ:FB) at the end of the fourth quarter of 2021 worth $815 million, representing 0.16% of the portfolio. The company has been in the Citadel portfolio since the second quarter of 2012.
Hedge funds have been shedding Meta Platforms, Inc. (NASDAQ:FB) from their portfolios as inflation rises. At the end of the fourth quarter of 2021, 224 hedge funds in the database of Insider Monkey held stakes worth $31.8 billion in Meta Platforms, Inc. (NASDAQ:FB), compared to 248 in the preceding quarter worth $38.5 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Meta Platforms, Inc. (NASDAQ:FB) was one of them. Here is what the fund said:
“We continued to keep our learnings from 2020 in mind during the quarter as we sought to increase the up capture of the portfolio. We also made adjustments to the portfolio’s top 10 holdings to increase the participation of select stocks, including Meta Platforms, Inc. (NASDAQ:FB), while trimming our weighting to stable names, which now represent 47% of the portfolio. Our repositioning has been encouraging so far with the portfolio performing better on up days in the market while maintaining good down capture during more turbulent sessions.”
1. Intel Corporation (NASDAQ:INTC) PUT
Number of Hedge Fund Holders: 72
Percentage Increase in Stake During Q4: 43%
Intel Corporation (NASDAQ:INTC) makes and sells semiconductor products. At the end of the fourth quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in Intel Corporation (NASDAQ:INTC), compared to 66 in the previous quarter worth $6.4 billion.
Securities filings show that Citadel owned PUT options on over 15.2 million shares of Intel Corporation (NASDAQ:INTC) at the end of the fourth quarter of 2021 worth $784 million, representing 0.16% of the portfolio.
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