In this article, we discuss the 10 stocks that Ken Griffin’s Citadel is piling into. If you want to skip our analysis of these stocks, go directly to Ken Griffin’s Citadel Is Piling Into These 5 Stocks.
Ken Griffin oversees Citadel Investment Group, one of the largest hedge funds in the world. The portfolio value of the fund at the end of the fourth quarter of 2021 was more than $489 billion, up from $481 billion at the end of September 2021. The scale of the equity holdings of the fund is better understood by looking at the latest 13F activity. Between October and December, the fund made new purchases in 1,948 stocks, additional purchases in 5,275, and reduced holdings in 6,371 stocks. It also sold off 1,924 stocks completely.
The top ten holdings of Citadel Investment Group comprise under 30% of the portfolio and are concentrated in the technology and services sectors. Griffin and his fund have come under regulatory scrutiny in the past few months amid investigations into short-selling. Two investment arms of the Citadel umbrella, Citadel Securities and Surveyor Capital, are the subject of probes by the US Department of Justice and the US Securities and Exchange Commission. These probes involve allegations of market manipulation and short-selling frauds.
Griffin, who has personal net worth in excess of over $27.5 billion, has meanwhile been busy preparing his portfolio for the upcoming economic environment in light of rising inflation and interest rates. Some of the top stocks in the portfolio of Ken Griffin at the end of December 2021 included Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Broadcom Inc. (NASDAQ:AVGO), among others discussed in detail below.
Our Methodology
The stocks were picked from the fourth quarter regulatory filings of Citadel Investment Group. The companies in which the fund increased a previously-held stake feature on the list. Stocks in which the fund held CALL or PUT options have been identified prominently.
Data from around 900 elite hedge funds tracked by Insider Monkey was used to identify the number of hedge funds that hold stakes in each firm.
Ken Griffin of Citadel Investment Group
Ken Griffin’s Citadel Is Piling Into These Stocks
10. Charter Communications, Inc. (NASDAQ:CHTR) CALL
Number of Hedge Fund Holders: 73
Percentage Increase in Stake During Q4: 801%
Charter Communications, Inc. (NASDAQ:CHTR) is a Connecticut-based communications firm. It is one of the top communications stocks in the finance world. At the end of the fourth quarter of 2021, 73 hedge funds in the database of Insider Monkey held stakes worth $16.5 billion in Charter Communications, Inc. (NASDAQ:CHTR), compared to 74 in the previous quarter worth $18.7 billion.
Latest filings show that Citadel owned CALL options on over 2.3 million shares of Charter Communications, Inc. (NASDAQ:CHTR) at the end of the fourth quarter of 2021 worth $1.5 billion, representing 0.3% of the overall portfolio. The company has been in the Citadel portfolio, with minor breaks, since the third quarter of 2016.
Just like Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Broadcom Inc. (NASDAQ:AVGO), Charter Communications, Inc. (NASDAQ:CHTR) is one of the stocks that elite investors are flocking to.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Charter Communications, Inc. (NASDAQ:CHTR) was one of them. Here is what the fund said:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included communication services, where Charter Communications, Inc. (NASDAQ:CHTR) trailed after generating robust returns earlier in the recovery.”
9. PayPal Holdings, Inc. (NASDAQ:PYPL) PUT
Number of Hedge Fund Holders: 110
Percentage Increase in Stake During Q4: 68%
PayPal Holdings, Inc. (NASDAQ:PYPL) provides digital payments services. Regulatory filings reveal that Citadel owned PUT options on over 6.1 million shares of PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the fourth quarter of 2021 worth more than $1.1 billion, representing 0.23% of the portfolio.
Hedge funds have been offloading PayPal Holdings, Inc. (NASDAQ:PYPL) stock amid a broader lull around growth offerings. At the end of the fourth quarter of 2021, 110 hedge funds in the database of Insider Monkey held stakes worth $9.9 billion in PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 123 in the preceding quarter worth $12.8 billion.
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal Holdings, Inc. (NASDAQ:PYPL), which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
8. Block, Inc. (NYSE:SQ) PUT
Number of Hedge Fund Holders: 96
Percentage Increase in Stake During Q4: 51%
Block, Inc. (NYSE:SQ) provides payments services. Elite hedge funds hold large stakes in the company. At the end of the fourth quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in Block, Inc. (NYSE:SQ), compared to 98 in the preceding quarter worth $8.8 billion.
Securities filings show that Citadel owned PUT options on close to 7 million shares of Block, Inc. (NYSE:SQ) at the end of December 2021 worth over $1.1 billion. The company has been in the Citadel portfolio since the third quarter of 2017.
In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“We established a position in leading Financial Technology provider Block, Inc. (NYSE:SQ) during the quarter. Through one integrated system, Block, Inc. (NYSE:SQ) is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that Block, Inc. (NYSE:SQ) has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that Block, Inc. (NYSE:SQ) can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of the company’s future value will be from its Cash App business.”
7. The Walt Disney Company (NYSE:DIS) CALL
Number of Hedge Fund Holders: 111
Percentage Increase in Stake During Q4: 96%
The Walt Disney Company (NYSE:DIS) provides entertainment services. Latest 13F filings show that Citadel owned CALL options on over 7.1 million shares of The Walt Disney Company (NYSE:DIS) at the end of December 2021 worth $1.1 billion, representing 0.22% of the portfolio. The company has been in the Citadel portfolio since the third quarter of 2018.
The Walt Disney Company (NYSE:DIS) has witnessed a flurry of hedge fund activity in recent months. At the end of the fourth quarter of 2021, 111 hedge funds in the database of Insider Monkey held stakes worth $6.9 billion in The Walt Disney Company (NYSE:DIS), up from 101 the preceding quarter worth $9.4 billion.
In its Q4 2020 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and The Walt Disney Company (NYSE:DIS) was one of them. Here is what the fund said:
“One of the original constituents of the Nifty Fifty holds a place in our portfolio today. When we bought Disney three years ago, we wrote that “we view Disney theme parks in the US, Europe, and China as resistant to online substitution.” We did not reckon on a pandemic, which closed all of them, and sent all of us to our couches. The Walt Disney Company (NYSE:DIS), however, was ready for us, brilliantly illustrating the importance of management foresight and change management. Or, as Louis Pasteur said, “chance favors the prepared mind.
A century after its founding in 1923, The Walt Disney Company (NYSE:DIS) is in the middle of a bold shift from its legacy media networks & entertainment model—with cable TV, theme parks, and theater films dominating its earnings—to a direct-to-consumer streaming media model. The keys to Disney’s transition: matchless storytelling, coupled with financial strength. The company reliably creates content that people all over the world are eager to consume. It also hastened spending on original content to attract subscribers to its new streaming platform. These factors have allowed The Walt Disney Company (NYSE:DIS) to weather the pandemic having expanded its direct engagement with customers. Such connections yield a rich harvest of insights used to customize offerings on a mass scale, reinforcing that engagement in a virtuous circle and thereby raising the lifetime value of each customer. Subscribers to Disney+ reached 86.8 million one year after launch, compared to the 60 – 90 million management projected to reach in 2024. To be sure, Netflix, Apple, and Amazon remain formidable competitors in new-era streaming entertainment (mind what we said about everyone standing up at once), but there’s fight left in this old dog.”
6. AT&T Inc. (NYSE:T)
Number of Hedge Fund Holders: 70
Percentage Increase in Stake During Q4: 26%
AT&T Inc. (NYSE:T) is a media and technology firm. The hedge fund sentiment around the stock is largely positive. At the end of the fourth quarter of 2021, 70 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in AT&T Inc. (NYSE:T), compared to 66 in the preceding quarter worth $3.2 billion.
According to the latest disclosures, Citadel owned over 43.7 million shares of AT&T Inc. (NYSE:T) at the end of the fourth quarter of 2021 worth $1 billion, representing a very small portion of the total portfolio. The company has been in the Citadel portfolio, with minor exceptions, since 2011.
Along with Meta Platforms, Inc. (NASDAQ:FB), Amazon.com, Inc. (NASDAQ:AMZN), and Broadcom Inc. (NASDAQ:AVGO), AT&T Inc. (NYSE:T) is one of the stocks that institutional investors have their eye on.
In its Q1 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and AT&T Inc. (NYSE:T) was one of them. Here is what the fund said:
“Nelson Capital stayed busy in the first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T Inc. (NYSE:T). Over the years, AT&T Inc. (NYSE:T) has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”
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Disclosure. None. Ken Griffin’s Citadel Is Piling Into These 10 Stocks is originally published on Insider Monkey.
