In this article, we will take a look at the 10 stocks to buy in Ken Griffin’s portfolio.
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.
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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.
Ken Griffin of Citadel Investment Group
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).
10. Mastercard Incorporated (NYSE:MA)
Citadel Investment Group’s Stake: $511.35 million
Mastercard Incorporated (NYSE:MA) is a global leader in payment transaction processing, offering services that connect consumers, merchants, and financial institutions through a comprehensive payments network. Its portfolio includes credit, debit, and prepaid cards, along with mobile payment solutions.
TD Cowen recently reaffirmed a positive outlook on Mastercard Incorporated (NYSE:MA), raising the price target to $567 from $533 and maintaining a Buy rating. This update follows Mastercard’s investor day, which underscored its long-term growth strategy. The company projects sustainable double-digit growth through 2027, driven by its robust financial services ecosystem.
In its third-quarter earnings report, Mastercard Incorporated (NYSE:MA) exceeded expectations, benefiting from increased consumer spending amid stable economic conditions. Revenue from its payment network grew by 11%, while value-added services and solutions rose by 19%, now comprising 37% of total revenue. Excluding one-time costs, the company reported earnings of $3.89 per share, surpassing analysts’ forecast of $3.74.
Ithaka US Growth Strategy stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q3 2024 investor letter:
“Mastercard Incorporated (NYSE:MA) is one of two leading companies (along with Visa, which we also own) that helps match information and funds between banks that have relationships with card-carrying consumers and banks that have relationships with merchants, thus ensuring payment transactions are reliable and secure. Since the company’s founding in 1966, Mastercard has benefi ted from the growth in personal consumption expenditure, the strong secular shift from cash and checks to credit and debit cards, and a highly profi table business model that generates high incremental operating margins and hence ample and growing free cash fl ow per share. During the third quarter Mastercard’s stock outperformed as an in-line earnings announcement and strong global credit growth helped pull the stock out of a six-month consolidation.”
9. Medtronic plc (NYSE:MDT)
Citadel Investment Group’s Stake: $524 million
Medtronic plc (NYSE:MDT) is a leading global medical technology company specializing in the development, manufacturing, and distribution of device-based medical therapies. It is a pioneer in robotic-assisted surgery technologies, with significant advancements in minimally invasive and spine procedures.
In the latest quarter, Medtronic plc (NYSE:MDT) achieved a 5.3% year-over-year revenue increase, driven by balanced growth across its Surgical, Neuroscience, Cardiovascular, and Diabetes segments. The company’s international operations account for 48% of its total revenue, underscoring its global reach and diversified revenue streams.
On October 15, Baird raised its price target for Medtronic plc (NYSE:MDT) to $96 from $90 while maintaining a Neutral rating. The adjustment reflects Medtronic’s consistent mid-single-digit top-line growth over the past seven quarters. Baird’s analysis suggests the company is likely to surpass consensus expectations for Q2 FY2025 revenue and adjusted earnings per share. However, the firm noted the cautious tone of Medtronic’s FY2025 guidance and highlighted the sustainability of the projected high-single-digit adjusted EPS growth for the latter half of the fiscal year.
8. Microsoft Corporation (NASDAQ:MSFT)
Citadel Investment Group’s Stake: $544.1 million
Microsoft Corporation (NASDAQ:MSFT), a global tech leader, specializes in productivity software, cloud solutions, and personal computing products. Its products are distributed through OEMs, distributors, resellers, and directly via digital marketplaces, online platforms, and retail stores.
In FY25 Q1, Microsoft Corporation (NASDAQ:MSFT) posted $65.6 billion in revenue, a 16% year-over-year increase. The strong start to the fiscal year was fueled by Microsoft Cloud, which generated $38.9 billion in revenue. Segment-wise, Productivity and Business Processes revenue grew 12%, Intelligent Cloud rose 20%, and More Personal Computing increased by 17%, year-over-year.
On October 31, Citi reaffirmed its Buy rating on Microsoft Corporation (NASDAQ:MSFT) with a price target of $497, despite a mixed quarterly performance. The company exceeded top and bottom-line expectations, driven by a 1-2% revenue boost from Azure cloud services and a 5% rise in EPS, supported by 23% year-over-year growth in commercial bookings. However, the results were influenced by one-off factors like favorable revenue recognition and foreign exchange rates. Additionally, Microsoft’s Q2 guidance fell short of analyst expectations due to new capacity constraints with a collocation partner, which is projected to slow Azure’s growth by 1-2 percentage points.
Baron Opportunity Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter:
“Microsoft Corporation (NASDAQ:MSFT) is the world’s largest software and cloud computing company. Microsoft was traditionally known for its Windows and Office products, but over the last five years it has built a $147 billion run-rate cloud business, including its Azure cloud infrastructure service and its Office 365 and Dynamics 365 cloud-delivered applications. Shares gave back some gains from strong performance over the first half of this year. For the fourth quarter of fiscal year 2024, Microsoft reported a strong quarter with total revenue growing 16%, in line with the Street; Microsoft Cloud up 22%; Azure up 30%; 43% operating income margins; and 36% free cash flow margins. Core Azure growth came in one point shy of expectations, however, due to a soft European market and continued constraints on AI compute capacity. In the same vein, while Microsoft reiterated its fiscal 2025 targets of double-digit top-line and operating income growth, quarterly guidance called for Azure growth to slow a bit before accelerating in the back half of the fiscal year, as capital expenditures increase, yielding an expansion of AI compute capacity. We believe this investment is a leading indicator for growth, with more than half of the spend related to durable land and data center build outs, which should monetize over the next 15-plus years. We remain confident that Microsoft is one of the best-positioned companies across the overlapping software, cloud computing, and AI landscapes, and we remain investors.”
7. Charter Communications Inc. (NASDAQ:CHTR)
Citadel Investment Group’s Stake: $602.9 million
Charter Communications Inc. (NASDAQ:CHTR), operating under the Spectrum brand, is a leading telecommunications and mass media company in the U.S. It provides services such as high-speed internet, digital cable television, and home phone services.
In October, Charter Communications Inc. (NASDAQ:CHTR) partnered with Comcast to offer its cable TV customers free access to the Peacock streaming service, aiming to retain subscribers amid the growing dominance of streaming platforms. Additionally, Charter Communications Inc. (NASDAQ:CHTR) secured agreements with major content providers like Warner Bros. Discovery to expand its streaming offerings.
For the third quarter, Charter Communications Inc. (NASDAQ:CHTR) reported a net income of $1.3 billion and free cash flow of $1.6 billion, alongside capital expenditures of $2.6 billion. While the company lost 110,000 internet customers, it added 545,000 Spectrum mobile lines, resulting in a 1.6% revenue increase and a 3.6% rise in adjusted EBITDA. However, management anticipates losing 100,000 Affordable Connectivity Program (ACP) internet subscribers in Q4 2024.
On November 5, Benchmark analyst Matthew Harrigan raised Charter’s price target to $450 from $440, maintaining a Buy rating on the stock. The adjustment followed Charter’s earnings report, prompting an updated evaluation of its 2025 financial outlook.
Parnassus Value Equity Fund stated the following regarding Charter Communications, Inc. (NASDAQ:CHTR) in its first quarter 2024 investor letter:
“During the quarter, we added new positions in Pfizer, NICE and Charter Communications, Inc. (NASDAQ:CHTR). NICE is a leading cloud contact center software company. Charter’s stock had fallen due to near-term concerns, which we believe will not have a major impact on the long-term value of the business. Charter Communications has had several issues that created short-term uncertainty. We assessed that these issues have limited impacts on the long-term value of the business and initiated a position to take advantage of the stock’s historically low valuation.”
6. PNC Financial Services Group Inc. (NYSE:PNC)
Citadel Investment Group’s Stake: $636.3 million
PNC Financial Services Group Inc. (NYSE:PNC) is a leading American bank holding company and financial services provider. It offers a comprehensive range of lending products and specialized services for corporations and government entities, including corporate banking, real estate financing, and asset-based lending.
In the third quarter of fiscal year 2024, PNC reported strong financial performance, with a net income of $1.5 billion, or $3.49 per diluted share. This success was driven by a 3% increase in net interest income and a 10% rise in fee income. Additionally, the company raised $1.5 billion through a public offering of senior notes in partnership with multiple financial institutions.
On October 17, JPMorgan reaffirmed its Overweight rating on PNC shares, maintaining a price target of $203.50. The positive outlook reflects confidence in the company’s Q3 results and its financial trajectory.
Looking ahead to Q4 2024, PNC Financial Services Group Inc. (NYSE:PNC) projects stable average loan balances, a 1% increase in net interest income, and a 5% to 7% decline in fee income. It also anticipates a 2% to 3% rise in total non-interest expenses. Furthermore, the company plans to return approximately $800 million to shareholders through dividends and share repurchases.
Carillon Eagle Growth & Income Fund stated the following regarding The PNC Financial Services Group, Inc. (NYSE:PNC) in its Q3 2024 investor letter:
“The PNC Financial Services Group, Inc. (NYSE:PNC) contributed to performance as the company delivered strong financial results implying that its net interest income may have troughed. Financial results also implied an acceleration in loan growth at the end of the quarter; period-end loan growth vastly outpaced average loan growth throughout the quarter.”
5. The Coca-Cola Company (NYSE:KO)
Citadel Investment Group’s Stake: $787.1 million
Founded in 1892, The Coca-Cola Company (NYSE:KO) is a leading American multinational known for its signature beverage, Coca-Cola. Beyond this iconic drink, the company produces, distributes, and markets a broad portfolio of non-alcoholic beverages, syrups, and now even includes alcoholic options within the beverage sector.
On September 17, The Coca-Cola Company (NYSE:KO) and Bacardi Limited announced a partnership to launch a ready-to-drink (RTD) cocktail featuring BACARDI rum mixed with Coca‑Cola, offering consumers the classic combination in a convenient, pre-mixed format.
BNP Paribas Exane adjusted its outlook on The Coca-Cola Company (NYSE:KO) on October 25, lowering the price target slightly from $78 to $76 but keeping an Outperform rating. This update followed The Coca-Cola Company’s third-quarter results, which beat expectations for revenue and earnings but showed some volume concerns. The company reported a 9% organic sales growth (OSG), above the forecasted 6.3%, and an EPS of $0.77, surpassing the anticipated $0.74. However, unit case volume saw a slight dip of 1% instead of the expected 0.5% increase.
Looking ahead to fiscal year 2024, the beverage giant raised its OSG forecast to approximately 10%, up from its prior range of 9-10%, primarily due to strong pricing power in inflationary regions. Its all-in EPS growth projection remains at 5-6%, translating to an EPS range of about $2.82-$2.85, in line with market expectations.
4. Merck & Co., Inc. (NYSE:MRK)
Citadel Investment Group’s Stake: $799.6 million
Merck & Co., Inc. (NYSE:MRK) is a global healthcare leader operating through two primary segments: Pharmaceutical and Animal Health. The Pharmaceutical segment includes a broad array of human health products targeting areas like oncology, immunology, and neuroscience, with popular brands such as Keytruda, Gardasil, Winrevair, and Bravecto.
While investors remain wary about the future expiration of the Keytruda patent, Merck & Co., Inc. (NYSE:MRK) still has several years before it loses exclusivity on this blockbuster antibody. In the third quarter, Merck’s worldwide sales rose 4% year-over-year to $16.7 billion, with Keytruda sales increasing 17% (or 21% on a constant currency basis) to reach $7.4 billion.
On November 1, Leerink Partners maintained an Outperform rating on Merck & Co., Inc. (NYSE:MRK), noting investor caution around Gardasil’s recent performance. However, Merck’s management expressed confidence in Gardasil’s revenue potential, particularly as demand continues to grow in regions outside of China, reinforcing its role in Merck’s long-term growth strategy.
Oakmark Equity and Income Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:
“Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical firm with leading oncology, vaccine and animal health franchises. Premier products in Merck’s portfolio include Keytruda, Gardasil, Winrevair and Bravecto. Outsized contributor Keytruda is an immuno-oncology drug that treats several cancers and tumors. Keytruda is an astounding clinical and commercial success that is on track to become one of the best-selling prescription drugs to date. Investor angst surrounding Keytruda’s pending U.S. patent expiration in 2028 presented a chance to buy shares at a discounted valuation. We believe opportunities to extend Keytruda’s duration through life cycle management are underappreciated. More importantly, discounted cash flows from products already on market cover today’s entire stock price, meaning there is minimal value ascribed to a promising pipeline with strong sales potential. We believe Merck is led by a capable management team that looks to reinvest these cash flows in an accretive manner.”
3. Boston Scientific Corporation (NYSE:BSX)
Citadel Investment Group’s Stake: $820.6 million
Boston Scientific Corporation (NYSE:BSX), based in Delaware, operates as a biomedical and biotechnology engineering firm and a global producer of medical devices used across various interventional medical specialties. These include interventional radiology, interventional cardiology, peripheral interventions, and oncology.
The company has reported robust growth in its cardiology segment, with U.S. sales rising by 27% and international sales by 18%, driven by strong performances in its ICTx and EP business sectors, as well as the Watchman franchise. In addition, some of the company’s recent product approvals include the Faraview mapping software and Farawave Nav catheter. Moreover, although the Acurate platform did not meet its primary endpoint in the Acurate IDE trial, it achieved a 20% revenue growth in EMEA, exceeding $200 million.
On November 5, TD Cowen reaffirmed its Buy rating and $100 price target for Boston Scientific Corporation (NYSE:BSX) after the company’s announcement of plans to acquire Cortex, a private firm known for its OptiMap system, a unique cardiac mapping tool for managing complex atrial fibrillation cases. TD Cowen emphasized the strategic value of this acquisition, as it is expected to enhance Boston Scientific’s already successful electrophysiology portfolio.
2. NVIDIA Corporation (NASDAQ:NVDA)
Citadel Investment Group’s Stake: $864.9 million
NVIDIA Corporation (NASDAQ:NVDA) is a global leader in graphics computing and networking solutions, with its GPUs driving high demand in gaming and AI applications. This strong market position has propelled the company to a trillion-dollar valuation.
On October 29, NVIDIA introduced its Enterprise Reference Architectures, providing blueprints to help partners and customers develop AI factories. More recently, on November 6, the company announced a collaboration with Hugging Face aimed at advancing open-source AI robotics research and development.
As NVIDIA’s earnings report approaches, analysts at Jefferies anticipate another stellar quarter for the AI powerhouse. They expect the company to exceed revenue expectations and raise its guidance, fueled by the rollout of its Blackwell processors and continued growth in the Hopper GPU lineup. In a November 15 note, Jefferies projected NVIDIA Corporation (NASDAQ:NVDA) to surpass the consensus revenue estimate of $33 billion for October, forecasting $34 billion—$1.5 billion above the company’s guidance of $32.5 billion. Looking ahead to January, the analysts expect revenue to exceed the consensus estimate of $36.6 billion, projecting $38.1 billion. Jefferies attributes its optimism to the robust performance of NVIDIA’s Blackwell processors, with third-quarter revenue estimated at $4 billion and expected to surge to $9 billion in Q4. Similarly, the Hopper GPUs, alongside the H20 product line, are anticipated to maintain strong momentum, with H20 revenues forecasted to grow from $1.8 billion in Q3 to $4.2 billion in Q4.
1. 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.
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 timeframe. 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.
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