In this article, we discuss the 10 financial stocks to buy according to Ken Griffin’s Citadel Investment Group. If you want to skip our detailed analysis of these stocks, go directly to the 5 Financial Stocks to Buy According to Ken Griffin’s Citadel Investment Group.
Ken Griffin founded Citadel Investment Group in 1990, which is a Chicago-based hedge fund with a portfolio value of $481 billion as of Q3 2021, with Griffin serving as the chief investment officer and the CEO. In the third quarter, 21.08% of Griffin’s 13F securities consisted of stocks from the finance sector, with the remaining portfolio concentrated in the information technology, industrials, healthcare, consumer discretionary, and communications sectors. Billionaire Ken Griffin grew his Q3 investments by approximately $129 billion as compared to the prior-year quarter, via quantitative investment strategies including equities, commodities, global fixed income, and credit.
Continuing to seek out growth driven and market leading companies, Griffin was one of the notable investors in the privately held Cohesion, a key player in smart building and digital twin SaaS technology, with the company using these funds for product expansion for optimizing building environment and health.
Citadel Investment Group’s multi-strategy flagship fund, Wellington, outperformed markets in September by gaining 7.8%, which resulted in a year-to-date performance of 18.5%.
Ken Griffin of Citadel Investment Group
The most notable financial stocks in Ken Griffin’s Q3 portfolio include Arthur J. Gallagher & Co. (NYSE:AJG), Morgan Stanley (NYSE:MS), Mastercard Incorporated (NYSE:MA), and Bank of America Corporation (NYSE:BAC), among others discussed in detail below.
Our Methodology
We used the Q3 portfolio of Ken Griffin’s Citadel Investment Group to select his top 10 financial stocks, ranking the companies according to Griffin’s stake value in each holding.
For further context on each company, we have mentioned important comparison metrics like the Q3 performance, analyst ratings, and the hedge fund sentiment surrounding each stock.
Financial Stocks to Buy According to Ken Griffin’s Citadel Investment Group
10. Blackstone Inc. (NYSE:BX)
Citadel Investment Group’s Stake Value: $160,475,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 54
Blackstone Inc. (NYSE:BX), a New York-based private equity and alternative investment management firm, posted on October 21 its Q3 results. EPS in the quarter equaled $1.28, beating estimates by $0.36. Revenue over the period totaled $3.04 billion, increasing 108.54% year-over-year, outperforming estimates by $872.28 million.
On November 4, BofA analyst Craig Siegenthaler reinstated coverage of Blackstone Inc. (NYSE:BX) with a Buy rating and a $182 price target, implying 30%-35% total return potential, stating that the company has a “special opportunity” to grow in the retail channel, which will drive earnings growth above expectations.
Citadel Investment Group increased its stake in Blackstone Inc. (NYSE:BX) by 46% in the third quarter, holding 1.37 million shares worth $160.4 million. Overall, 54 hedge funds in the Q3 database of Insider Monkey were bullish on Blackstone Inc. (NYSE:BX), with total stakes amounting to $2.5 billion.
Rajiv Jain’s GQG Partners is the biggest Blackstone Inc. (NYSE:BX) stakeholder from Q3 2021, with 6.33 million shares worth $736.8 million.
In addition to Arthur J. Gallagher & Co. (NYSE:AJG), Morgan Stanley (NYSE:MS), Mastercard Incorporated (NYSE:MA), and Bank of America Corporation (NYSE:BAC), Blackstone Inc. (NYSE:BX) is a notable financial stock from Ken Griffin’s Q3 portfolio.
Here is what Artisan Partners has to say about Blackstone Inc. (NYSE:BX) in its Q3 2021 investor letter:
“Among our top Q3 contributors were Blackstone. Investment stalwart Blackstone’s virtuous cycle is in full swing. Throughout Blackstone’s history, excellent investment performance and capital protection have allowed the firm to increase fundraising in existing verticals as well as launch new endeavors. Historically, less than 10% of assets under management mature in any given year, and that number should move lower with continued growth in perpetual capital vehicles. Blackstone’s A+ rated balance sheet and capital-light model are the backbone of its 85% of cash flow distribution policy via a variable quarterly dividend. In short, this is a long-duration fee stream and robust capital-raising engine.”
9. MetLife, Inc. (NYSE:MET)
Citadel Investment Group’s Stake Value: $161,614,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 39
MetLife, Inc. (NYSE:MET) is a leading American provider of life insurance, annuities, and employee benefit programs, serving customers across more than 60 countries. In the third quarter, 39 hedge funds were long MetLife, Inc. (NYSE:MET), holding stakes worth $1.14 billion, with Pzena Investment Management being the leading company stakeholder.
Ken Griffin, via Citadel Investment Group, owns 2.61 million MetLife, Inc. (NYSE:MET) shares, worth $161.6 million, representing 0.03% of the hedge fund’s total investments for the third quarter.
MetLife, Inc. (NYSE:MET) reported solid Q3 results on November 3, posting an EPS of $2.39, beating estimates by $0.68. Revenue over the quarter totaled $17.09 billion, outperforming estimates by $805.82 million, making MetLife, Inc. (NYSE:MET) one of the top financial stocks from Ken Griffin’s Q3 portfolio.
Goldman Sachs analyst Alex Scott initiated coverage of MetLife, Inc. (NYSE:MET) on December 2 with a Buy rating and a $77 price target, stating that MetLife, Inc. (NYSE:MET) is positioned to succeed in the U.S. and Mexico Employee Benefits market, has growth opportunities in Asia, and enjoys a sizable excess capital position that could grow as the company carries out further strategic initiatives.
8. State Street Corporation (NYSE:STT)
Citadel Investment Group’s Stake Value: $169,656,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.03%
Number of Hedge Fund Holders: 42
Ken Griffin increased his stake in State Street Corporation (NYSE:STT) in the third quarter by 65%, owning over 2 million shares of the company, valued at $169.65 million. State Street Corporation (NYSE:STT) is one of the leading American bank holding companies, and it is the largest custodian bank worldwide. Offering services including investment management, foreign exchange, stock trading, and securities lending, State Street Corporation (NYSE:STT) is one of the top financial stocks to buy according to Ken Griffin’s Citadel Investment Group.
On October 18, State Street Corporation (NYSE:STT) announced Q3 earnings, posting earnings per share of $2, exceeding estimates by $0.08. The revenue totaled $2.99 billion, up 7.4% from the prior-year quarter, beating estimates by $22.36 million.
Citi analyst Keith Horowitz on October 22 raised the price target on State Street Corporation (NYSE:STT) to $115 from $100 and kept a Buy rating on the shares post the Q3 results.
At the end of September, 42 hedge funds tracked by Insider Monkey reported owning stakes in State Street Corporation (NYSE:STT), up from 37 funds in the previous quarter. Harris Associates is the largest State Street Corporation (NYSE:STT) stakeholder in Q3, with 4.86 million shares worth $412.2 million.
7. Arthur J. Gallagher & Co. (NYSE:AJG)
Citadel Investment Group’s Stake Value: $207,115,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.04%
Number of Hedge Fund Holders: 32
Arthur J. Gallagher & Co. (NYSE:AJG), one of the largest global insurance brokers, represents 0.04% of Ken Griffin’s total Q3 13F securities. Griffin holds 1.39 million Arthur J. Gallagher & Co. (NYSE:AJG) shares as of September this year, amounting to $207.1 million. Griffin increased his position in the company by 345% in Q3, making Arthur J. Gallagher & Co. (NYSE:AJG) one of the best financial stocks according to the billionaire.
Arthur J. Gallagher & Co. (NYSE:AJG), on October 28, reported its Q3 results. Earnings per share came in at $1.33, beating estimates by $0.12. The quarterly revenue gained 16.49% year-over-year, totaling $2.11 billion, exceeding estimates by $153.8 million.
Jefferies analyst Yaron Kinar initiated coverage of Arthur J. Gallagher & Co. (NYSE:AJG) on November 18 with a Buy rating and a $205 price target. The analyst expects Arthur J. Gallagher & Co. (NYSE:AJG) to continue to execute well on organic growth while outgrowing its peers, and believes that the company will do so without compromising on margins.
By the end of September, 32 hedge funds were bullish on Arthur J. Gallagher & Co. (NYSE:AJG), with total stakes valued at $1.38 billion. Millennium Management is one of the largest Arthur J. Gallagher & Co. (NYSE:AJG) stakeholders from the third quarter, increasing its stake in the company by 9672% as compared to the previous quarter, holding a $139.2 million position.
6. Global Payments Inc. (NYSE:GPN)
Citadel Investment Group’s Stake Value: $231,919,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.04%
Number of Hedge Fund Holders: 68
Global Payments Inc. (NYSE:GPN) is a financial technology company providing a connected infrastructure that serves multiple dimensions of commerce, conducting billions of secure monetary transactions every year. Ken Griffin’s stake in Global Payments Inc. (NYSE:GPN) increased by 15% in the third quarter, with the billionaire owning 1.47 million Global Payments Inc. (NYSE:GPN) shares worth $231.9 million.
On November 2, Global Payments Inc. (NYSE:GPN) reported earnings for the third quarter, posting an EPS of $2.18, beating estimates by $0.03. The quarterly revenue gained 14.57% year-over-year, exceeding estimates by $10.29 million.
Barclays analyst Ramsey El-Assal on December 10 lowered the price target on Global Payments Inc. (NYSE:GPN) to $182 from $195 and kept an Overweight rating on the shares. The analyst observed that Global Payments Inc. (NYSE:GPN)’s organic performance so far in Q4 has “proven resilient”. However, he lowered Q4 margins “a bit” so they are accurately aligned with company guidance.
Of the 68 hedge funds that were long Global Payments Inc. (NYSE:GPN) in the third quarter, Orbis Investment Management is the leading company stakeholder, with an approximately $500 million position.
Global Payments Inc. (NYSE:GPN) is one of the best financial stocks to buy according to Ken Griffin’s Citadel Investment Group, just like Arthur J. Gallagher & Co. (NYSE:AJG), Morgan Stanley (NYSE:MS), Mastercard Incorporated (NYSE:MA), and Bank of America Corporation (NYSE:BAC).
Here is what Artisan Mid-Cap Fund has to say about Global Payments Inc. (NYSE:GPN) in its Q3 2021 investor letter:
“Global Payments has delivered solid results so far this year and recently revised its 2021 outlook upward. However, shares have been pressured as investors weigh the competitive threat from faster growing emerging payments companies. We have spent significant time contemplating this risk, and given our belief the company will not completely thwart the competition, we trimmed our position size. That said, we still believe Global Payments belongs in the CropSM of our portfolio. The company has long been shifting its business away from legacy payments technology toward durable growth areas such as software and omnichannel commerce. Furthermore, it is making substantial cloud investments in partnership with Google and Amazon Web Services to future-proof its underlying technology stack. These decisions lead us to believe management’s targets (~10% revenue growth, ~20% EPS growth) remain achievable and should lead to solid stock returns over the longer term.”
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Disclosure: None. 10 Financial Stocks to Buy According to Ken Griffin’s Citadel Investment Group is originally published on Insider Monkey.
