The Highest-Earning Hedge Fund Manager in 2015 Reveals His Top Stock Picks for Q2

Chicago billionaire Ken Griffin, the Founder and Chief Executive Officer of Citadel Advisors, was the highest-paid hedge fund manager in 2015, earning a stunning $1.7 billion paycheck during a year when most hedge funds lost millions of dollars. The monetary windfall allowed the CEO of Citadel to secure the title of highest earnign hedge fund manager for the second-consecutive year. The $23 billion Citadel hedge fund has posted double-digit gains each year since the financial crisis, when the investment firm lost a whopping 55%. The Chicago-based investment firm had a portfolio worth a massive $79.25 billion on March 31, though that was down from $91.63 billion recorded at the end of the December quarter. Having this in mind, let’s proceed to the discussion of Mr. Griffin’s five largest equity positions as of the end of the March quarter.

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#5. Bristol-Myers Squibb Co (NYSE:BMY)

 – Number of shares owned by Citadel (as of March 31): 5.02 Million

 – Value of Citadel’s holding (as of March 31): $320.71 Million

Citadel upped its stake in Bristol-Myers Squibb Co (NYSE:BMY) by 10% during the first three months of 2016, ending the March quarter with 5.02 million shares valued at $320.71 million. The New York-based drugmaker has seen its market value increase by 3% since the beginning of 2016. Just recently, BMS released its financial results for the first quarter of 2016 and raised its top- and bottom-line guidance for the full year, as sales of anti-cancer treatment Opdivo, blood thinner Eliquis, and Hepatitis C drug Daklinza each rose more than anticipated. The company anticipates full-year revenue to increase in the low double-digit range, compared to the previously-anticipated growth in the mid-single-digit range. In April, BMS acquired private biotechnology company Padlock, which is focused on creating medicines for the treatment of destructive autoimmune diseases. Samuel Isaly’s OrbiMed Advisors owns 7.62 million shares of Bristol-Myers Squibb Co (NYSE:BMY) as of March 31.

#4. Yahoo! Inc. (NASDAQ:YHOO)

 – Number of shares owned by Citadel (as of March 31): 8.94 Million

 – Value of Citadel’s holding (as of March 31): $329.06 Million

Billionaire Ken Griffin and his team trimmed Citadel’s exposure to Yahoo! Inc. (NASDAQ:YHOO) by 1.15 million shares during the first quarter of 2016. The quarter-end stake was worth $329.06 million and accounted for 0.42% of Citadel’s gigantic portfolio. The embattled Internet company appears to be focused on selling its core businesses after facing strong pressure from Jeffrey Smith’s Starboard Value LP throughout 2015. Just recently, Yahoo added four Starboard-designated directors to the Board, including Mr. Smith, who also joined the company’s strategic review committee. It is being bandied about in the media that billionaire Warren Buffett is backing a consortium which includes Quicken Loans founder Dan Gilbert, a group which is seeking to acquire Yahoo’s assets. The consortium, which is said to be primarily interested in Yahoo! Finance, is one of several bidders who entered the second round of bidding for Yahoo’s core businesses. Shares of Yahoo have gained 12% year-to-date. Jeffrey Altman’s Owl Creek Asset Management was the owner of 15.05 million shares of Yahoo! Inc. (NASDAQ:YHOO) at the end of March.

We’ll go over the top three stock picks of billionaire Ken Griffin on the next page.

#3. Visa Inc. (NYSE:V)

 – Number of shares owned by Citadel (as of March 31): 4.31 Million

 – Value of Citadel’s holding (as of March 31): $329.65 Million

The Chicago-based investment firm was bullish on Visa Inc. (NYSE:V) in the first quarter of this year, as Citadel increased its Visa stake by 41% quarter-over-quarter. The upped stake, which comprises 4.31 million shares, was valued at $329.65 million on March 31. The shares of the credit card company have been weighed down recently by a lawsuit filed by retail giant Wal-Mart Stores Inc. (NYSE:WMT) over Visa’s chip-enabled debit cards. The Arkansas-based discount retailer claims that Visa insists Wal-Mart allow customers to use signatures instead of personal identification numbers (PINs) to verify debit card transactions. The usage of PINs is considered more secure, but Visa argues that customers prefer the other transaction method. The lawsuit alleges that Visa earns more money from signature-based transactions than from those using PINs. Visa shares are 1% in the red for the year. Ken Fisher’s Fisher Asset Management reported ownership of 14.79 million shares of Visa Inc. (NYSE:V) in its latest 13F filing.

#2. Home Depot Inc. (NYSE:HD)

 – Number of shares owned by Citadel (as of March 31): 2.69 Million

 – Value of Citadel’s holding (as of March 31): $359.55 Million

Citadel owns 2.69 million shares of Home Depot Inc. (NYSE:HD) as of the end of March, up by a hefty 62% quarter-over-quarter. The 2.69 million-share stake was worth $359.55 million at the end of March and constituted 0.45% of Citadel’s portfolio. Earlier this week, the world’s largest home improvement retailer based on net sales released its first quarter financial results, which beat analysts’ expectations. In addition, the company raised its bottom- and top-line estimates for the full 2016 year. Even so, Home Depot shares closed in the red on the day of the earnings release, as management told analysts that same-store sales growth dropped from 10.2% in February to 6.7% in March and then to 4.3% in April. The Atlanta-based company increased its fiscal 2016 revenue projection to annual growth of 6.3%, while comparable-store sales are anticipated to grow by 4.9%. Home Depot’s shares are flat year-to-date. Cliff Asness’ AQR Capital Management had 2.23 million shares of Home Depot Inc. (NYSE:HD) in its portfolio at the end of March.

#1. Facebook Inc. (NASDAQ:FB)

 – Number of shares owned by Citadel (as of March 31): 4.47 Million

 – Value of Citadel’s holding (as of March 31): $510.37 Million

Facebook Inc. (NASDAQ:FB) was the largest equity holding in Citadel’s ocean-sized pool of holdings at the end of March, accounting for 0.64% of the firm’s $79.25 billion portfolio. The Chicago-based asset manager upped its Facebook stake by roughly 95% during the first three months of 2016, to 4.47 million shares, which were valued at $510.37 million. Reportedly, the social media giant is currently testing its enterprise social network for businesses, known as “Facebook at work”, which may unlock a new revenue stream for the company in the near future. Facebook’s enterprise-focused platform, which is currently in beta mode, is being used by approximately 450 companies around the globe. As most small- and medium-scale companies may not have an existing platform to keep in touch with employees, “Facebook at work” may represent an extremely useful tool for them. Facebook’s stock has gained 12% since the start of 2016. Andreas Halvorsen’s Viking Global acquired a new stake of 20.13 million shares of Facebook Inc. (NASDAQ:FB) during the January-to-March period.

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