We recently published a list of Ken Griffin Stock Portfolio: 10 Stocks to Buy. In this article, we are going to take a look at where Hess Corporation (NYSE:HES) stands against other Ken Griffin’s portfolio stocks to buy.
One of Wall Street’s Greatest
Ken Griffin, the visionary founder of Citadel Investment Group, launched his hedge fund in 1990 with $4.2 million, achieving unprecedented success. In 2022, Griffin’s fund delivered an extraordinary 153% return, driven by accurate bets on inflation and interest rates. With a portfolio now exceeding $518 billion, Citadel Investment Group is one of Wall Street’s most closely watched hedge funds, consistently achieving over 25% annual returns since 2016. Citadel employs a multi-strategy investment approach, combining long and short positions to capitalize on market opportunities. Its flagship fund, Wellington, anchors Citadel’s operations by investing across multiple asset classes and sectors, emphasizing diversification. In 2022, Wellington achieved an impressive 38% return, building on 26% in 2021 and 24% in 2020. Notably, the fund posted a 19.4% gain in 2019, more than double its 9.1% return in 2018.
While Griffin’s legacy is strongly tied to Citadel’s hedge fund, a significant portion of his Forbes-calculated net worth comes from Citadel Securities, valued at $22 billion after Sequoia and Paradigm acquired a small stake two years ago. Citadel Securities has redefined modern trading, challenging the traditional dominance of big banks. In just two decades, it has become the largest stock buyer and seller in the U.S.; in August, it facilitated more equity trading within its electronic network than the New York Stock Exchange’s main market. In 2023, Citadel Securities generated $2.8 billion in profit from $6.3 billion in net revenue, with an impressive $4.9 billion in net revenue achieved in the first half of 2024 alone.
READ ALSO: Cathie Wood’s 11 Favorite AI Stocks and Jim Cramer November Portfolio: Top 10 Stocks.
The billionaire also ranks among the top donors to outside spending groups for the 2024 election, which secured former President Donald Trump a second term. As the founder and CEO of Citadel, he contributed $100 million to conservative causes, making him the fifth-largest individual contributor to federal election spending, according to Federal Election Commission data. While Griffin has donated millions to Republican candidates, particularly since 2022, he has notably refrained from directly supporting Trump’s campaign. A self-described “Reagan Republican,” Griffin has historically favored establishment-focused Super PACs, such as the Congressional Leadership Fund.
Our Methodology
For this our list of the 10 best stocks in Ken Griffin’s portfolio, we examined Citadel Investment Group’s stock portfolio from the third quarter of 2024. The stocks are ranked based on the firm’s stake value in each holding.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An oil tanker sailing across the horizon, conveying the importance of crude oil transportation for the company.
Hess Corporation (NYSE:HES)
Citadel Investment Group’s Stake: $969.5 million
Hess Corporation (NYSE:HES) is a leading exploration and production company focused on the exploration, development, production, purchase, transportation, and sale of crude oil, natural gas liquids, and natural gas. The company operates through two primary segments: Exploration and Production, and Midstream.
In its Q3 2024 earnings report, Hess Corporation (NYSE:HES) posted a net income of $498 million, slightly down from the prior year. However, adjusted net income rose to $660 million, reflecting strong growth fueled by higher production volumes, particularly in Guyana. The company reported a 17% year-over-year increase in net production, reaching 461,000 barrels of oil equivalent per day, with Guyana’s contributions driving much of this growth. While crude oil selling prices declined, the production ramp-up, especially from the third development at the Stabroek Block, bolstered overall earnings.
Piper Sandler reaffirmed its Overweight rating on Hess Corporation (NYSE:HES) with an unchanged price target of $167 at the beginning of October. Addressing investor inquiries, the firm assessed the independent value of Hess’s assets, particularly in Guyana, and the company’s overall stand-alone valuation. Piper Sandler raised its valuation of Hess’s Guyana interests from $40.6 billion to $45.6 billion, translating to an increase in per-share value from $132 to $149. The revision reflects a significant rise in discovered resources and better-than-expected productivity in Guyana, enhancing the company’s long-term growth outlook.
Overall, HES ranks 1st on our list of Ken Griffin’s portfolio stocks to buy. While we acknowledge the potential of HES, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HES but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
