John Griffin was second in command at Julian Robertson's Tiger Management. In 1996, he launched Blue Ridge Capital. His investment style is similar to other Tiger cubs who are long/short equity investors with a long bias. Griffin was one of the top hedge fund managers in 2007, returning 65% and pocketing $625 million. He also personally made $175 million in 2005.
During the tough financial period in 2008, Griffin’s Blue Ridge Capital only lost around 8%. His three-year average return was 17.83% at the end of 2009. We believe that by focusing on the investments of John Griffin, investors are more likely to beat the market in the long term. Let’s take a look at the new moves of his Blue Ridge Capital over the third quarter.
Griffin disclosed a brand new $54.2 million position in American Capital Agency Corp (AGNC) at the end of September. American Capital Agency Corp is a real estate investment trust that invests in residential mortgage pass-through securities and collateralized mortgage obligations on a leveraged basis. The company reported third-quarter total revenue of $326.75 million, up from $62.60 million for the same quarter last year. Net income also increased 317% to $250.4 million. AGNC returned 3.28% since the end of September. It has a market cap of $5.12B and a P/E ratio of 4.14. John Burbank’s Passport Capital also invested $200+ million in AGNC.
In addition to AGNC, Blue Ridge also opened new positions in Illumina Inc (ILMN) and KKR & Co (KKR). According to Blue Ridge’s recent 13F, it had $35.4 million and $24.8 million respectively invested in ILMN and KKR. Unluckily, for the 13 weeks ending October 2, Illumina reported revenue of $235.5 million, slightly lower than $237.31 million for the same period last year. Net income was $20.15 million, down from $35.45 million a year ago. ILMN lost 22.12% since the end of September, during which SPY returned 10.88%. On the other hand, KKR returned 28.65% since the end of third quarter. The company reported third-quarter revenue of $164.81 million, up from $96.02 million for the same quarter last year. Leon Cooperman’s Omega Advisors had $50+ million invested in KKR.
Over the third quarter, Blue Ridge increased its position in Apple Inc (AAPL) by 14% to $458 million. Apple reported revenues of $28.27 billion for the third quarter of 2011, compared with $20.34 billion for the same period a year ago. Its net income was $6.6 billion, compared with $4.3 billion last year. Since the end of September, AAPL lost 0.54%. Rob Citrone had over $700 million invested in AAPL.
Blue Ridge also increased its position in Google Inc (GOOG) by 29% to $242 million. The company reported revenues of $9.3 billion for the third quarter of 2011, compared with $7.3 billion for the same period a year ago. Third quarter net income was $2.73 billion, compared with $2.17 billion in the third quarter of 2010. GOOG returned 19.32% since the end of third quarter. Stephen Mandel had $400+ million invested in Google stocks. Ken Fisher also had $300+ million invested in GOOG.
Blue Ridge Capital sold out a few positions over the third quarter, including Citrix Systems Inc (CTXS), SanDisk Corp (SNDK), Teva Pharmaceutical Industries Ltd (TEVA), and CME Group Inc (CME). TEVA and CME only returned 8.91% and 4.66% respectively since the end of September, while SPY returned 10.88% in the same period.
John Griffin’s largest positions are Apple (AAPL), Amazon (AMZN), Valeant (VRX), Range Resource Corp (RRC), Google (GOOG), Thermo Fisher (TMO), Netflix (NFLX), and Gold Miners ETF (GDX). He also has at least $125 million invested in JPMorgan Chase (JPM), Priceline (PCLN), eBay (EBAY), and Monsanto (MON).
JPMorgan is his largest financial position with a $138 million position. He also had $52 million Goldman Sachs (GS). John Griffin probably lost a significant amount from his NFLX positions, but his portfolio is heavy in technology/internet stocks. We especially like his Apple and Google picks. His bet on gold miners was also recently recommended by other hedge fund managers, like David Einhorn. Investors should take a closer look.
Disclosure: I am long SPY.