Ken Griffin, the founder of Citadel, is an influential albeit controversial figure in the investment industry. Ken Griffin tasted early success while trading during his college days, and it is safe to say that he has never looked back since. Despite huge setbacks during the financial crisis of 2008, he used his skills and determination to make a comeback where many others would have simply closed the fund and moved on.
The billionaire investor currently manages assets worth around $65 billion across his funds. Owing to its large size and track record of success, Ken Griffin’s stock moves often make it to the news and are closely followed by investors. We decided to do the same, focusing on Mid-cap stocks that still had the potential to turn into established giants tomorrow.
To come up with the list of billionaire Ken Griffin’s 10 midcap stock picks with huge upside potential, we looked at his latest 13F holdings and, among his significant holdings, only considered stocks between $10 billion and $40 billion in market cap. We then looked at the average analyst price target on Wall Street and ranked the stocks according to their upside potential.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Lululemon Athletica Inc. (NASDAQ:LULU)
Stock Upside Potential: 16.82%
Citadel Investment Group’s Stake: $579,542,355
Lululemon Athletica Inc. operates as a retailer, designer, and distributor of technical athletic apparel, accessories, and footwear for men and women. It provides tops, pants, jackets, and shorts for athletic activities. The stock has finally started recovering its losses, surging over 8% from its April lows.
The company remains committed to its core specialties and does not stretch its resources by selling a wide range of products like its competitors. It helps the firm to maintain a distinctive brand image, enabling price premiums. It also helps to build strong relationships with customers to drive long-term loyalty. Additionally, LULU also prioritizes product design, offering a limited high-end product range.
Heading to 2025, the company expects revenue to be in the range of $11.15 billion to $11.3 billion. It expects revenue growth of 5% to 7% for the year. Diluted EPS is projected to be between $14.95 and $15.15. With a focus on international markets, the firm intends to expand its retail presence by opening 40 to 45 new stores throughout the year. However, gross margin is projected to reduce by approximately 60 basis points, driven by FX headwinds, fixed cost deleverage, and tariff increases.
Even though the growth may not seem impressive enough, the stock is currently available at a forward PE of just below 25, down considerably from its historic average PE of 40. Much like the products it sells, the stock demands a premium when the economy is going good. At current levels, there is little doubt that the gains will be immense once the economy stabilizes.
9. DexCom, Inc. (NASDAQ:DXCM)
Stock Upside Potential: 22.52%
Citadel Investment Group’s Stake: $331,412,267
DexCom, Inc. operates as a medical device company. The company specializes in the development, design, and marketing of continuous glucose monitoring (CGM) systems. It offers Dexcom Share, Dexcom G6 and Dexcom G7, Dexcom ONE, Dexcom Real-Time API, and Stelo.
The firm recently received FDA clearance for the Dexcom G7 15-Day continuous glucose monitoring system. This system is for diabetic patients aged 18 and above. According to the company, G7 15 Days’ launch in the US is anticipated in the latter half of 2025. Management boasts that this system is the longest-lasting continuous glucose monitoring system available on the market. With a Mean Absolute Relative Difference (MARD) of 8.0%, it is also the most accurate system. After getting FDA clearance, the company’s share price jumped about 8.8%, reflecting the opportunity the product brings for the company.
DXCM also recently confirmed its fiscal 2025 guidance, indicating a 14% revenue growth. It also reiterated its adjusted EBITDA margin and operating margin outlook. As per the guidance, the firm expects the adjusted EBITDA margin to be at approximately 30% and the operating margin to be at approximately 21%. However, the non-GAAP gross margin outlook was lowered to 62% because of inflationary pressures and increased freight costs. Improvements are anticipated later in the year with inventory normalization.
8. United Airlines Holdings, Inc. (NASDAQ:UAL)
Stock Upside Potential: 22.86%
Citadel Investment Group’s Stake: $548,207,180
United Airlines Holdings, Inc. is an air transportation services provider. It transports cargo and people through the regional fleet and its mainline. The company also provides maintenance, ground handling, frequent flyer award non-travel redemptions, and flight academy services. The firm was among the weekly top 5 industrial gainers last week as it saw a 5.66% surge by week’s end.
As per recent news, UAL is in talks with JetBlue Airways to partner up. The partnership is expected to focus on improving loyalty programs and customer connectivity. However, the details of this collaboration have not been disclosed yet. The company has already experienced rejection from a federal judge regarding its collaboration with American Airlines. So it’s no surprise that the airline is taking its time this time around to avoid any regulatory hurdles..
The firm also reaffirmed its FY 2025 guidance last month. Based on stable current booking trends, the company anticipates EPS to be in a range of $11.50 to $13.50 for the year. As part of capacity adjustments, UAL is planning to decrease 4% domestic capacity in Q3 to align with softer demand. However, on the back of strong demand in the Atlantic and Pacific regions, management is confident about profitability in the international markets.
