In this article, we discuss the top 10 stock picks of billionaire Ken Griffin.
Ken Griffin is a billionaire American hedge fund manager, entrepreneur, and investor. He is recognized in the financial industry for founding Citadel Investment Group in 1990, and serves as the chief investment officer and chief executive officer at the multinational hedge fund.
After completing his Bachelor’s from Harvard University in 1989, Griffin started his financial career at Glenwood Capital Investments, where he was given $1 million for trading by the owner, Frank Meyer, and Griffin returned 70% from his strategic investing. A year later, Griffin ventured out on his own with Citadel Investment Group, and one of the biggest financial contributors for his hedge fund was Frank Meyer. Citadel Investment Group suffered significant losses during the 2008 financial crisis, which garnered a lot of criticism for Griffin and his investment strategies, but the fund recovered 62% of the losses by the next year.
The flagship fund at Citadel Investment Group, namely Wellington, returned 7.8% in September, which pushed its year-to-date performance to 18.5%. While the stock market suffered heavy losses in September, with the S&P 500 falling 4.8%, as well as the blue-chip Dow and the Nasdaq Composite dropping by 4.3% and 5.3% respectively, Griffin scored tremendous gains that made headlines.
Ken Griffin of Citadel Investment Group
Ken Griffin’s Q3 portfolio is valued at over $481 billion as of Q3 2021, and the investments are focused on the information technology, finance, healthcare, industrials, communications, and consumer discretionary sectors, with a top ten holdings concentration of 29.36%.
The most notable stocks from Ken Griffin’s Q3 portfolio include IHS Markit Ltd. (NYSE:INFO), Colgate-Palmolive Company (NYSE:CL), S&P Global Inc. (NYSE:SPGI), and Datadog, Inc. (NASDAQ:DDOG), 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 stock picks for the third quarter of 2021. The securities are ranked according to Griffin’s stake value in each holding.
For further context on the companies, we have mentioned Q3 earnings, analyst ratings, and the hedge fund sentiment around each stock.
Billionaire Ken Griffin’s Portfolio: Top Stock Picks
10. Colgate-Palmolive Company (NYSE:CL)
Citadel Investment Group’s Stake Value: $252,650,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 54
Colgate-Palmolive Company is a multinational consumer products company headquartered in New York, offering personal hygiene and home care products. Colgate-Palmolive Company posted its Q3 earnings on October 28. EPS for the quarter totaled $0.81, beating estimates by $0.01. The quarterly revenue came in at $4.41 billion, up 6.28% from the prior-year quarter, exceeding estimates by $15.45 million.
Ken Griffin’s Citadel Investment Group holds a $252.65 million position in Colgate-Palmolive Company as of Q3 2021, which accounts for 0.05% of the fund’s total investments.
Jean-Marie Eveillard’s First Eagle Investment Management is the leading stakeholder of Colgate-Palmolive Company in the third quarter, with 11.65 million shares worth $880.8 million. Overall, 54 hedge funds in the Q3 database of Insider Monkey reported owning stakes in Colgate-Palmolive Company, amounting to $2.57 billion.
Citing concerns about the mixed Q3 results, supply chain challenges, and rising inflation, Berenberg analyst Fulvio Cazzol on November 2 lowered the price target on Colgate-Palmolive Company to $77 from $85 and kept a Hold rating on the shares.
Here is what First Eagle Investment Management has to say about Colgate-Palmolive Company in their Q1 2021 investor letter:
“The leading detractors in the quarter (included) Colgate-Palmolive Company. After a strong 2020 fueled in part by lockdown-driven demand, consumer staples stocks generally cooled during the first quarter as investors shifted attention to the more economically sensitive areas of the market likely to benefit from re-openings and improved discretionary spending. The effects of this rotation could be seen in the share price underperformance of names like Colgate-Palmolive.”
9. IQVIA Holdings Inc. (NYSE:IQV)
Citadel Investment Group’s Stake Value: $273,877,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 66
IQVIA Holdings Inc. (NYSE:IQV), a leading company in the fields of health information technology, clinical research, and human data science technology, is one of the top stock picks of Ken Griffin from the third quarter. Griffin, via Citadel Investment Group, holds a $273.8 million stake in IQVIA Holdings Inc., which accounts for 0.05% of his Q3 investment portfolio.
A total of 66 hedge funds tracked by Insider Monkey were bullish on IQVIA Holdings Inc. in the third quarter, with stakes amounting to $3.75 billion. This is comparable to 69 funds being long IQVIA Holdings Inc. in the preceding quarter, with total stakes worth $3.80 billion. Thomas Steyer’s Farallon Capital is the leading stakeholder of the company, holding a $647.65 million position.
IQVIA Holdings Inc., on October 21, posted its Q3 results. EPS in the third quarter came in at $2.17, exceeding estimates by $0.05. The revenue amounted to $3.39 billion, gaining 21.72% from the preceding-year quarter, outperforming estimates by $40.36 million.
Increasing the growth targets for revenue and EBITDA, Mizuho analyst Ann Hynes on November 18 raised the price target on IQVIA Holdings Inc. to $290 from $282 and kept a Buy rating on the shares.
In addition to IHS Markit Ltd., Colgate-Palmolive Company, S&P Global Inc., and Datadog, Inc., IQVIA Holdings Inc. is a notable stock from Ken Griffin’s Q3 portfolio.
8. Datadog, Inc. (NASDAQ:DDOG)
Citadel Investment Group’s Stake Value: $278,442,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.05%
Number of Hedge Fund Holders: 62
Billionaire Ken Griffin holds a $278.4 million position in Datadog, Inc., which represents 0.05% of his total investments from the third quarter. Datadog, Inc. is a tech company offering a cloud based data analytics platform that monitors databases and servers.
Datadog, Inc. reported its Q3 earnings on November 4, posting an EPS of $0.13, beating estimates by $0.07. The $270.49 million revenue was up 74.88% year-over-year, outperforming estimates by $22.67 million.
On November 19, RBC Capital analyst Matthew Hedberg upgraded Datadog, Inc. to Outperform from Sector Perform with a price target of $235, up from $191.
At the end of September, 62 hedge funds were bullish on Datadog, Inc., up from 56 funds in the preceding quarter. The leading stakeholder of Datadog, Inc. is Tiger Global Management, holding 5.24 million shares worth $740.7 million.
Here is what Artisan Global Discovery Fund has to say about Datadog, Inc. in its Q3 2021 investor letter:
“In addition to trimming our position in Atlassian, we also pared our exposure to Datadog. Datadog is a leading provider of monitoring and analytics for cloud-based applications. Software has become central to how organizations deliver differentiated products and user experiences and optimize business processes—fueling the disruption taking place across nearly every industry. The success of this digital transformation trend is increasingly tied to quality and performance—in turn, driving strong secular demand for IT infrastructure and application monitoring. Datadog’s platform— which integrates and automates infrastructure monitoring, application performance monitoring and log management—provides real-time observability of its customers’ entire technology stacks and is built to address the scale, complexity and dynamic nature of the modern cloud era. Datadog’s solutions fill a void left by legacy tools built for on-premise IT infrastructures, and the company is well positioned to exploit an underpenetrated, large addressable market. The company has been firing on all cylinders recently, adding 1,000 or more new customers each quarter (~600 pre-pandemic) and growing its free cash flow margin by 800 basis points year-over-year in Q2. Additionally, the integration of nine different products into a single platform has enabled the company to successfully cross-sell products to existing customers. While we believe Datadog’s low-touch, land and-expand distribution model positions the company well to capitalize on the continued shift to the cloud, we trimmed our position as shares approached our estimate of private market value.”
7. 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), an American bank holding company offering auto loans, credit cards, and savings accounts among other banking services, is one of the top stock picks of Ken Griffin for the third quarter of 2021. Citadel Investment Group maintained a position worth approximately $280 million in Capital One Financial Corporation, which accounts for 0.05% of the total investments of the hedge fund.
Baird analyst David George upgraded Capital One Financial Corporation to Neutral from Underperform with an unchanged price target of $145 on December 1.
On October 26, Capital One Financial Corporation announced earnings for Q3, posting an EPS of $6.86, beating estimates by $1.66. The $7.83 billion quarterly revenue gained 6.08% year-over-year, exceeding estimates by almost $381 million.
At the end of the third quarter, 55 hedge funds in the database of Insider Monkey reported owning stakes in Capital One Financial Corporation, worth $4.70 billion. The leading Capital One Financial Corporation stakeholder is Harris Associates, holding 5.84 million shares valued at $946.1 million in Q3 2021.
6. Danaher Corporation (NYSE:DHR)
Citadel Investment Group’s Stake Value: $302,753,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 74
Danaher Corporation (NYSE:DHR) stock represents 0.06% of the total investments at Citadel Investment Group in the third quarter, with Ken Griffin holding a $302.75 million position in the company. Danaher Corporation is a Washington-based conglomerate that is working on developing medical and industrial equipment, and manages three key business segments, namely Diagnostics, Life Sciences, and Environmental and Applied Solutions.
Danaher Corporation announced earnings for Q3 2021 on October 21, posting an EPS of $2.39, beating estimates by $0.24. The $7.23 billion revenue exceeded estimates by $226.84 million and jumped 22.88% from the preceding-year quarter.
Baird analyst Catherine Schulte on October 22 raised the price target on Danaher Corporation to $340 from $305 and kept an Outperform rating on the shares, citing normalized customer activity levels and a solid funding environment.
Fisher Asset Management is the largest Danaher Corporation stakeholder as of the third quarter, holding 3.44 million shares worth over $1 billion. Overall, 74 hedge funds were long Danaher Corporation in Q3, down from 78 funds in the prior quarter.
In addition to IHS Markit Ltd., Colgate-Palmolive Company, S&P Global Inc., and Datadog, Inc., Danaher Corporation is a notable stock from Ken Griffin’s Q3 portfolio.
Here is what ClearBridge Investments has to say about Danaher Corporation in its Q2 2021 investor letter:
“Our differentiated positions in the health care sector also made strong contributions as the market began to reward the heavily discounted sector. Danaher, for example, is seeing customer activity approach pre-pandemic levels and is executing well. In addition to improving health through its life sciences (research tools for biopharmaceutical, food and beverage, medical, aerospace and microelectronics industries) and diagnostics (tools for use in labs and critical care settings) businesses, Danaher offers environmental and applied solutions that keep global food and water supplies safe.”
5. Vulcan Materials Company (NYSE:VMC)
Citadel Investment Group’s Stake Value: $302,942,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.06%
Number of Hedge Fund Holders: 43
Vulcan Materials Company (NYSE:VMC), an Alabama-based distributor of construction materials, is one of the top stock picks of Ken Griffin from the third quarter, with the billionaire holding a $303.94 million position in the company, which represents 0.06% of his total investments.
Brandon Haley’s Holocene Advisors is one of the leading Vulcan Materials Company stakeholders as of Q3 2021, with 1.46 million shares worth $248.5 million. Overall, 43 funds in the database of 867 elite hedge funds monitored by Insider Monkey were long Vulcan Materials Company in the third quarter, with total stakes valued at $1.92 billion.
Vulcan Materials Company, on November 4, reported its Q3 results. EPS in the period equaled $1.54, missing estimates by -$0.11. The $1.52 billion quarterly revenue jumped 15.77% from the prior-year quarter, exceeding estimates by $39.22 million.
Stating that the company’s size and scale make it one of the best positioned construction materials companies, Argus analyst David Coleman on November 9 upgraded Vulcan Materials Company to Buy from Hold with a $240 price target. He noted that Vulcan Materials Company should benefit from economic conditions and the approval of the Biden administration’s new infrastructure plan.
4. Invesco QQQ Trust (NASDAQ:QQQ)
Citadel Investment Group’s Stake Value: $426,087,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.08%
Number of Hedge Fund Holders: 37
Invesco QQQ Trust (NASDAQ:QQQ) is an ETF that tracks the movement of the NASDAQ 100 Index, which contains the 100 largest non-financial securities listed on the Nasdaq based on market capitalization. Ken Griffin, via Citadel Investment Group, holds a $426 million position in Invesco QQQ Trust in the third quarter, which accounts for 0.08% of the firm’s total Q3 portfolio.
At the end of the third quarter of 2021, 37 hedge funds monitored by Insider Monkey’s database of elite funds were long Invesco QQQ Trust, with total stakes amounting to $2.7 billion. This is comparable to 34 funds being bullish on Invesco QQQ Trust in the preceding quarter, with a total stake value of $2.42 billion.
3. S&P Global Inc. (NYSE:SPGI)
Citadel Investment Group’s Stake Value: $427,452,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.08%
Number of Hedge Fund Holders: 78
S&P Global Inc. is a financial information and data analytics organization that is also the parent company of S&P Global Ratings, S&P Global Market Intelligence, S&P Global Platts, and CRISIL, in addition to being the majority owner of the S&P Dow Jones Indices. Ken Griffin holds a $427.45 million stake in S&P Global Inc. as of September this year, with the stock making up 0.08% of his total Q3 investments.
S&P Global Inc. posted its Q3 earnings on October 26. EPS in the period amounted to $3.54, exceeding estimates by $0.39. The quarterly revenue totaled $2.09 billion, up 13.06% from the prior-year quarter, beating estimates by $101.65 million.
Of the 78 hedge funds that were bullish on S&P Global Inc. in the third quarter, Chris Hohn’s TCI Fund Management is the leading stakeholder of the company, holding 4.81 million shares worth over $2 billion.
Here is what Baron FinTech Fund has to say about S&P Global Inc. in its Q1 2021 investor letter:
“S&P Global Inc. provides credit ratings, indexes, data, and analytics to the financial and commodities markets. Shares increased on strong fourth quarter results and 2021 guidance that exceeded Street expectations. Although bond issuance is expected to moderate after two years of exceptional growth, management still expects revenue to grow mid-single-digits this year. Also, shareholders overwhelmingly voted to approve the merger with IHS Markit. We continue to own the stock as we see a long runway for growth and significant competitive advantages for the company.”
2. IHS Markit Ltd. (NYSE:INFO)
Citadel Investment Group’s Stake Value: $448,332,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 64
IHS Markit Ltd. is a London-based information provider, and it was announced at the end of November 2020 that the company would be acquired by S&P Global Inc. in a $44 billion deal. However, the merger is still pending and is expected to close in Q1 2022. IHS Markit Ltd. stock represents 0.09% of Ken Griffin’s Q3 portfolio, with the billionaire maintaining a $448.3 million position in the company.
Earnings for the quarter ending August 2021 were reported by IHS Markit Ltd. on November 16. EPS in the period equaled $0.85, exceeding estimates by $0.02. The $1.18 billion revenue also outperformed estimates by $13.29 million.
Matthew Halbower’s Pentwater Capital Management is the largest stakeholder of IHS Markit Ltd., with 8.63 million shares worth over $1 billion. Overall, 64 hedge funds were bullish on IHS Markit Ltd. in the third quarter, with total stakes valued at $6.72 billion.
Here is what Artisan Mid Cap Fund has to say about IHS Markit Ltd. in its Q1 2021 investor letter:
“We ended our campaign in IHS Markit. IHS Markit is a global provider of information services to the financial services, automotive and energy sectors. Since beginning our investment campaign in 2009, we have been attracted to the company’s position relative to the meaningful secular tailwind driving demand for data and analytics to help guide business decisions. The company announced in Q4 it is merging with S&P Global, one of the largest credit ratings agencies globally and a provider of benchmarks, data and analytics to the global capital and commodities markets. We believe the combination provides a good level of cost and revenue synergies which will help drive profit growth, and S&P Global has a solid track record of acquiring and integrating new businesses. However, we exited our position as the combined entity will be well beyond our mid-cap market cap mandate.”
1. Constellation Brands, Inc. (NYSE:STZ)
Citadel Investment Group’s Stake Value: $454,280,000
Percentage of Citadel Investment Group’s 13F Portfolio: 0.09%
Number of Hedge Fund Holders: 53
Constellation Brands, Inc. (NYSE:STZ) is an American producer of beer, wine, and spirits and it is the largest exporter of beer in the United States. Ken Griffin holds a $454.28 million position in Constellation Brands, Inc. as of Q3 2021, making it the largest holding in the billionaire’s portfolio. The Constellation Brands, Inc. stock represents 0.09% of Griffin’s portfolio for the third quarter.
On October 13, HSBC analyst Carlos Laboy upgraded Constellation Brands, Inc. to Buy from Hold with a price target of $262, up from $254, citing strong company fundamentals.
Harris Associates is the biggest stakeholder of Constellation Brands, Inc. as of Q3 2021, holding over 4 million shares worth $849.7 million. Overall, 53 hedge funds were long Constellation Brands, Inc., up from 50 funds in the preceding quarter. The total stakes in Q3 amounted to $1.71 billion.
You can also take a look at 10 Meme Stocks that More than Doubled in 2021 and 10 Infrastructure Stocks to Buy Under $10.
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This article is originally published at Insider Monkey.
