In this article, we discuss the 5 financial stocks to buy according to Ken Griffin’s Citadel Investment Group. If you want our detailed analysis of these stocks, go directly to the 10 Financial Stocks to Buy According to Ken Griffin’s Citadel Investment Group.
5. M&T Bank Corporation (NYSE:MTB)
Citadel Investment Group’s Stake Value: $249,054,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 27
M&T Bank Corporation (NYSE:MTB), one of the best financial stocks to buy according to Ken Griffin, announced on November 16 a quarterly cash dividend of $1.20 per share on its common stock. This reflects an increase of 9% from the previous $1.10 per share Q3 dividend. The dividend will be payable on December 31 to shareholders of record on November 30.
The New York-based M&T Bank Corporation (NYSE:MTB) offers customers a range of financial services including retail banking, investment banking, commercial banking, investment management, and private banking. Ken Griffin holds a $249 million position in M&T Bank Corporation (NYSE:MTB) as of the third quarter of 2021.
On October 20, M&T Bank Corporation (NYSE:MTB) posted solid Q3 results. EPS in the quarter equaled $5.06, topping estimates by $1.56. The quarterly revenue increased 4.97% year-over-year to $1.54 billion, exceeding estimates by $63.21 million.
Citi analyst Jill Shea raised the firm’s price target on M&T Bank Corporation (NYSE:MTB) to $180 from $170 and reiterated a Buy rating on the shares on October 25, citing the strong Q3 results and M&T Bank Corporation (NYSE:MTB)’s capacity for improved commercial loan growth as reasons for the Buy rating.
Adage Capital Management is one of the leading M&T Bank Corporation (NYSE:MTB) stakeholders from Q3, with a $137.8 million stake. Overall, 27 hedge funds monitored by Insider Monkey reported owning stakes in M&T Bank Corporation (NYSE:MTB) at the end of September, worth $774.2 million.
4. Morgan Stanley (NYSE:MS)
Citadel Investment Group’s Stake Value: $249,979,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 65
Ken Griffin owns 2.56 million shares in Morgan Stanley (NYSE:MS), an American multinational investment bank and financial services company, worth approximately $250 million, representing 0.05% of the billionaire’s Q3 portfolio. Morgan Stanley (NYSE:MS) is one of the best financial stocks to buy as per Ken Griffin’s Citadel Investment Group.
On October 14, Morgan Stanley (NYSE:MS) reported earnings for the third quarter, posting an EPS of $2.04, beating estimates by $0.36. Revenue over the period jumped 26.56% year-over-year to $14.75 billion, outperforming estimates by $799.47 million.
Citi analyst Keith Horowitz on December 3 upgraded Morgan Stanley (NYSE:MS) to Buy from Neutral with a price target of $115, up from $105. The analyst stated that the stock offers “high quality at a reasonable price”, with multiple growth catalysts.
The largest Morgan Stanley (NYSE:MS) stakeholder from the third quarter is Eagle Capital Management, with a $1.46 billion position in the company. Overall, the Q3 database of Insider Monkey reported that 65 hedge funds were bullish on the stock, down from 69 funds in the previous quarter.
Here is what Artisan Value Fund has to say about Morgan Stanley (NYSE:MS) in its Q3 2021 investor letter:
“Morgan Stanley, a leading global financial services company, came into the portfolio in late 2020 as a result of its purchase of E*TRADE. The acquisition is a great fit for Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked the business by adding less volatile fee streams to complement its leading positions in cyclical businesses such as advisory, equities and FICC (fixed income, currencies and commodities). We believe the company will prove its resiliency and value over the long term.”
3. Capital One Financial Corporation (NYSE:COF)
Citadel Investment Group’s Stake Value: $279,963,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 55
Capital One Financial Corporation (NYSE:COF) is an American financial corporation facilitating customers with banking facilities, credit cards, savings accounts, and auto loans. Citadel Investment Group holds a $279.9 million position in Capital One Financial Corporation (NYSE:COF), increasing its stake in the company by 130% in the third quarter.
Capital One Financial Corporation (NYSE:COF) reported a strong third quarter performance on October 26, with earnings per share of $6.86, exceeding estimates by $1.66. The Q3 revenue equaled $7.83 billion, surpassing revenue estimates by almost $381 million.
On December 1, Baird analyst David George upgraded Capital One Financial Corporation (NYSE:COF) to Neutral from Underperform with an unchanged price target of $145.
A total of 55 hedge funds were long Capital One Financial Corporation (NYSE:COF) by September end, with Harris Associates being the leading company stakeholder, owning a $946.1 million position as of Q3 2021.
Here is what ClearBridge Investments has to say about Capital One Financial Corporation (NYSE:COF) in its Q2 2021 investor letter:
“Portfolio holdings in the communication services and financial sectors also made strong contributions… In financials, Capital One has also benefited, at least indirectly, from government stimulus that has strengthened customer balance sheets and driven credit losses to record lows. Capital One should also benefit from a reopening of the economy and increased discretionary spending.”
2. Bank of America Corporation (NYSE:BAC)
Citadel Investment Group’s Stake Value: $341,886,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.07%
Number of Hedge Fund Holders: 72
Being among the most well known multinational American investment banks and financial services holding companies, Bank of America Corporation (NYSE:BAC) is considered one of the best financial stocks in Ken Griffin’s third quarter portfolio. The billionaire increased his stake in Bank of America Corporation (NYSE:BAC) by 23% in Q3, holding over 8 million shares worth $341.8 million.
Bank of America Corporation (NYSE:BAC) posted its Q3 results on October 14, reporting earnings per share of $0.85, beating estimates by $0.15. The $22.77 billion revenue was up 11.33% year-over-year, outperforming estimates by $1.16 billion.
On December 9, UBS analyst Erika Najarian assumed coverage of Bank of America Corporation (NYSE:BAC) with a Buy rating and a $64 price target. Bank of America Corporation (NYSE:BAC) is the analyst’s top pick among the U.S. large cap banks, and she said the stock is positioned to be a potential cyclical and secular winner in the coming cycle.
Out of the 867 hedge funds tracked by Insider Monkey as of Q3 2021, 72 hedge funds were long Bank of America Corporation (NYSE:BAC), down from 87 funds in the prior quarter. Berkshire Hathaway is the biggest Bank of America Corporation (NYSE:BAC) stakeholder from the third quarter, holding over 1 billion shares worth $42.8 billion.
Here is what Oakmark Funds has to say about Bank of America Corporation (NYSE:BAC) in its Q3 2021 investor letter:
“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.
If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives at $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”
1. Mastercard Incorporated (NYSE:MA)
Citadel Investment Group’s Stake Value: $519,535,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.10%
Number of Hedge Fund Holders: 146
Mastercard Incorporated (NYSE:MA) is the best financial stock to buy according to Ken Griffin’s Citadel Investment Group, in addition to being immensely popular among the hedge funds. In the third quarter, 146 funds reported owning stakes in Mastercard Incorporated (NYSE:MA), valued at $17.65 billion. Akre Capital Management is the largest Mastercard Incorporated (NYSE:MA) stakeholder from Q3, with a position worth more than $2 billion.
Ken Griffin holds a $519.5 million stake in Mastercard Incorporated (NYSE:MA) as of September this year, which accounts for 0.1% of his total Q3 investments. Mastercard Incorporated (NYSE:MA) is a financial services corporation that offers credit cards and payment systems worldwide.
Mastercard Incorporated (NYSE:MA), on October 28, reported earnings for the third quarter. EPS in the period totaled $2.37, exceeding estimates by $0.18. The $4.99 billion revenue was up 29.92% year-over-year, beating revenue estimates by $35.79 million.
Mastercard Incorporated (NYSE:MA) declared a quarterly dividend of $0.49 per share on November 30, up from $0.40 in the previous quarter. The cash dividend will be paid on February 9, 2022 to shareholders of record on January 7, 2022.
UBS analyst Rayna Kumar assumed coverage of Mastercard Incorporated (NYSE:MA) on November 17 with a Buy rating and a $448 price target. The analyst believes that the largest growth opportunities for Mastercard Incorporated (NYSE:MA) are in Latin America, Asia Pacific, the Middle East, and Africa.
Here is what Polen Capital has to say about Mastercard Incorporated (NYSE:MA) in its Q3 2021 investor letter:
“Mastercard faced pressure as some believe these “old payment infrastructure” businesses will be disrupted by newer fintech companies using blockchain, buy now, pay later (BNPL), or other innovations to provide better/cheaper payment services. However, we believe that some of these technologies have meaningful limitations which could benefit existing payment networks. For example, BNPL transactions are often funded with cards and turn a one-time transaction into many smaller ones with more transaction fees for Mastercard. Just like with regulation, we continually monitor for competition and technological disruption. As of now, we do not see a significant risk in the foreseeable future to this company.”
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