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 PNC Financial Services Group Inc. (NYSE:PNC) 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 investor confidently discussing portfolio options with their asset manager.
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.”
Overall, PNC ranks 6th on our list of Ken Griffin’s portfolio stocks to buy. While we acknowledge the potential of PNC, 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 PNC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
