Ken Griffin Stock Portfolio: Top 10 Stock Picks

In this article, we discuss the top 10 stock picks of Ken Griffin.

Citadel Investment Group, a multi-strategy hedge fund run by billionaire Ken Griffin, announced that its flagship Wellington multi-strategy fund returned 2.5% in September, bringing the year-to-date performance to about 29% at the end of September 2022. Citadel’s Tactical Trading fund gained 2.4% in September, supported by fundamental long-short and quantitative equity strategies. 

Griffin, who manages nearly $439 billion in client money, plans for an expansion into Asia, motivated by China President Xi Jinping’s renewed focus on the economy. Griffin said in an interview to Bloomberg on November 16:

“China, given the size of its capital markets, is a center of focus for our investment team.” 

Ken Griffin observed that resilient growth in China could reduce the risk of a significant recession in 2023 in the world’s second-largest economy. He further explained: 

“If we see higher growth in China, that will make the recession shallower. Seeing growth in the region accelerate only encourages us to increase the size of our commitment.” 

Some of the best stocks in the Ken Griffin portfolio include Amazon.com, Inc. (NASDAQ:AMZN), Tesla, Inc. (NASDAQ:TSLA), and Apple Inc. (NASDAQ:AAPL). 

Our Methodology 

We selected the top 10 stocks from the Ken Griffin portfolio as of the end of the third quarter of 2022 for this analysis. The stocks are arranged according to the hedge fund’s stake value in each holding. Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022 was used to assess the hedge fund sentiment around the securities. 

Ken Griffin Stock Portfolio: Top Stock Picks

10. U.S. Bancorp (NYSE:USB)

Number of Hedge Fund Holders: 52

Citadel Investment Group’s Stake Value: $396,405,000

U.S. Bancorp (NYSE:USB) is an American bank holding company that operates through Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments. Ken Griffin Citadel Investment Group boosted its stake in U.S. Bancorp by 109% during the third quarter of 2022, holding 9.8 million shares worth $396.40 million. 

On October 14, U.S. Bancorp reported its Q3 results, posting a non-GAAP EPS of $1.18 and a revenue of $6.33 billion, outperforming Wall Street estimates by $0.02 and $130 million, respectively. The revenue increased 7.5% year-over-year in Q3 2022. 

JPMorgan analyst Vivek Juneja on November 2 raised the price target on U.S. Bancorp to $47 from $46 and kept an Overweight rating on the shares. The large-cap banks are presently seeing a huge benefit to revenues from rising rates and benign credit quality, while some impact from recession was already priced into the shares, the analyst told investors in a research note. In the short-term, he thinks bank stocks “should continue to benefit from rotation away from other sectors seeing more headwinds.”

According to Insider Monkey’s data, 52 hedge funds were long U.S. Bancorp at the end of the third quarter of 2022, compared to 43 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway held the biggest stake in the company, comprising 77.7 million shares worth $3.13 billion. 

Like Amazon.com, Inc., Tesla, Inc., and Apple Inc., U.S. Bancorp is one of the stocks backed by Ken Griffin. 

Here is what ClearBridge Investments Dividend Strategy has to say about U.S. Bancorp in its Q4 2021 investor letter:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.”

9. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 269

Citadel Investment Group’s Stake Value: $411,594,000

Microsoft Corporation (NASDAQ:MSFT) has been part of the Ken Griffin portfolio since the last quarter of 2010, apart from a few breaks over the years. In the third quarter of 2022, Ken Griffin strengthened his hold on Microsoft Corporation by 31%. The billionaire owns 1.76 million shares of the company worth $411.5 million, representing 0.09% of the total 13F securities.

On November 16, Lockheed Martin Corporation (NYSE:LMT) and Microsoft Corporation announced a landmark expansion of their strategic relationship to help power the next generation of technology for the Department of Defense.

Macquarie analyst Sarah Hindlian-Bowler on November 2 initiated coverage of Microsoft Corporation with a Neutral rating and a $234 price target. The analyst sees short-term constraints for Microsoft Corporation from weakness in the macro backdrop, cloud pull-in from COVID, softer PC sales, rampant energy costs, and low consumer purchasing power.

According to Insider Monkey’s Q3 data, 269 hedge funds were long Microsoft Corporation, compared to 258 funds in the preceding quarter. Bill & Melinda Gates Foundation Trust is the largest position holder in the company, with 39.2 million shares worth over $9 billion.

Diamond Hill made the following comment about Microsoft Corporation in its Q3 2022 investor letter:

“Also among our bottom contributors were media and technology giant Alphabet, software and IT services provider Microsoft Corporation and insurance company American International Group (AIG). Microsoft shares declined in Q3, along with other tech companies, as rising interest rates impacted the near-term outlook. We expect the business to continue to generate strong revenue growth and benefit from operating leverage. Microsoft’s cloud computing services business, Azure, is generating robust growth, confirming its competitive positioning.”

8. Broadcom Inc. (NASDAQ:AVGO)

Number of Hedge Fund Holders: 74

Citadel Investment Group’s Stake Value: $469,022,000

Broadcom Inc. (NASDAQ:AVGO) is a California-based company that designs, develops, and supplies semiconductor devices worldwide. Ken Griffin boosted his stake in Broadcom Inc. by 57% in Q3 2022, holding 1.05 million shares worth $469 million and representing 0.10% of the total 13F securities. Griffin has owned a position in Broadcom Inc. since Q2 2018. 

On October 18, Deutsche Bank analyst Ross Seymore reiterated a Buy rating on Broadcom Inc. but slashed the price target on the shares to $575 from $635. Fears of fundamental deterioration are “leading to very bearish investor positioning” into the Q3 results for semiconductors, the analyst told investors in a research note. The analyst forecasts Q3 earnings season to “yield more pervasive signs of weakness” and for the second consecutive quarter, he sees downside risk to 2023 estimates. 

According to Insider Monkey’s data, 74 hedge funds were bullish on Broadcom Inc. at the end of Q3 2022, compared to 66 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with 1.5 million shares worth approximately $673 million. 

Here is what Carillon Tower Advisers specifically said about Broadcom Inc. in its Q2 2022 investor letter:

“Tech stocks, including Broadcom Inc., were one of the hardest-hit sectors due to fears over a weakening macroeconomic environment. Broadcom, however, outperformed semiconductor peers as its end-market exposures provided relatively more defensive characteristics.”

7. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 117

Citadel Investment Group’s Stake Value: $477,091,000

Salesforce, Inc. (NYSE:CRM) provides customer relationship management technology that connects enterprises and customers worldwide. Securities filings for the third quarter of 2022 reveal that Ken Griffin strengthened his hold on Salesforce, Inc. by 416%. Citadel Investment Group owns 3.3 million shares of Salesforce, Inc. worth $477 million, representing 0.10% of the total portfolio. On November 10, Salesforce, Inc. stock rose more than 8%, making it one of the most prominent winners in enterprise software as the sector responded positively to cooling inflation data.

On November 18, BMO Capital analyst Keith Bachman reiterated an Outperform rating on Salesforce, Inc. but lowered the price target on the shares to $180 from $190. The economy deteriorated for all software stocks, which has led to delayed deals, the analyst told investors. He is more cautious heading into the third quarter results.

According to Insider Monkey’s data, 117 hedge funds were bullish on Salesforce, Inc. at the end of September 2022, compared to 116 funds in the prior quarter. Harris Associates is a prominent stakeholder of the company, with 6.5 million shares worth $944 million. 

In addition to Amazon.com, Inc., Tesla, Inc., and Apple Inc., elite investors are piling into Salesforce, Inc.. 

ClearBridge Investments made the following comment about Salesforce, Inc. in its Q3 2022 investor letter:

“Software has been a solid long-term performer for the Strategy and a key point of differentiation versus the benchmark. But even recurring revenue businesses enabling digital transformation are not immune from the vagaries of the COVID-19 recovery. Salesforce, Inc. (-12.8%) has detracted from results due to slowing revenue growth driven by a combination of factors, including pull-forward of enterprise digitization demand during COVID-19, some operational missteps, and lengthening sales cycles.

We believe the company still has ample room for revenue growth across its various platforms and should benefit from budget consolidation as customers seek control over tech spending in a weakening economy. We also see significant room for margin expansion. While we have trimmed our Salesforce (CRM) exposure, we maintain confidence that the stock will re-rate to a level that reflects its growth potential.”

6. Humana Inc. (NYSE:HUM)

Number of Hedge Fund Holders: 76

Citadel Investment Group’s Stake Value: $557,569,000

Humana Inc. (NYSE:HUM) is a health and well-being company in the United States, and it operates through three segments – Retail, Group and Specialty, and Healthcare Services. In Q3 2022, Ken Griffin raised his stake in Humana Inc. by 4%, holding 1.14 million shares worth $557.5 million, representing 0.12% of the total 13F securities. 

On October 27, Humana Inc. declared a $0.7875 per share quarterly dividend, in line with previous. The dividend is payable on January 27, 2023 to shareholders of record on December 30. On November 3, Humana Inc. also announced plans to buy back $1.0 billion worth of its common stock. 

Wells Fargo analyst Stephen Baxter on November 8 raised the price target on Humana Inc. to $610 from $558 and kept an Overweight rating on the shares. The analyst noted the company announced Q3 results that were better-than-forecasted and reiterated its 2022 guidance, which was lifted ahead of the company’s Investor Day in September.

Among the hedge funds tracked by Insider Monkey, 76 funds were long Humana Inc. at the end of Q3 2022, compared to 69 funds in the preceding quarter. Jeffrey Smith’s Starboard Value LP is a significant stakeholder of the company, with 953,000 shares worth $557.5 million. 

Diamond Hill made the following comment about Humana Inc. in its Q3 2022 investor letter:

“Humana Inc. has held up well amid volatile markets given the characteristics of the Medicare Advantage market and expectations that it can return to market growth in the 2023 annual enrollment period. We are confident in Humana’s value creation plan and ability to get back to market enrollment growth in addition to an increasing contribution from its health care services businesses. Shares of Texas Instruments outperformed as the COVID lockdowns eased in China, and customers could accept the product shipments leading to an upside in expectations.”

5. Boston Scientific Corporation (NYSE:BSX)

Number of Hedge Fund Holders: 53

Citadel Investment Group’s Stake Value: $561,256,000

Boston Scientific Corporation (NYSE:BSX) is a Massachusetts-based company that develops, manufactures, and markets medical devices for use in interventional medical specialties worldwide. It operates through three segments – MedSurg, Rhythm and Neuro, and Cardiovascular. Ken Griffin raised his stake in Boston Scientific Corporation by 16% in Q3 2022, holding 14.5 million shares worth $561.25 million, representing 0.12% of the total 13F securities. 

On October 27, Canaccord analyst William Plovanic raised the price target on Boston Scientific Corporation to $48 from $45 and kept a Buy rating on the shares. The analyst believes his thesis remains intact and thinks the set up for 2023 is resilient given organic growth is very strong and one-time annual impacts in 2022 of higher tax and FX headwinds will not possibly repeat in 2023.

According to Insider Monkey’s data, 53 hedge funds were bullish on Boston Scientific Corporation at the end of September 2022, compared to 56 funds in the earlier quarter. Andreas Halvorsen’s Viking Global is the leading position holder in the company, with more than 16 million shares worth $626 million. 

Here is what Artisan Partners specifically said about Boston Scientific Corporation in its Q2 2022 investor letter:

“We took advantage of Boston Scientific Corporation’s share price pullback during the quarter. We believe the company is well-positioned to benefit from an expected return of elective medical procedures and several innovative product profit cycles in the periods ahead. Meanwhile, the company’s health care end market could prove relatively resilient in a recession scenario.”

4. JPMorgan Chase & Co. (NYSE:JPM)

Number of Hedge Fund Holders: 110

Citadel Investment Group’s Stake Value: $573,064,000

JPMorgan Chase & Co. is an American multinational financial services company that operates through four segments – Consumer & Community Banking, Corporate & Investment Bank, Commercial Banking, and Asset & Wealth Management. In Q3 2022, Ken Griffin lifted his stake in JPMorgan Chase & Co. by a whopping 1243%, holding 5.4 million shares worth $573 million. 

On November 18, JPMorgan Chase & Co. announced that it is planning to expand its reach within US minority small business lending with a special-purpose credit program. The program has been tested out in Dallas, Texas, Detroit, Michigan, and Miami as part of the firm’s initiatives to offer more financing opportunities for minority businesses. Overall, JPMorgan Chase & Co. could have 100,000 new accounts opened over a span of five years with this lending, as well as another program starting in 2023.

Citi analyst Keith Horowitz reiterated a Buy rating on JPMorgan Chase & Co. on October 17 with a $135 price target following the company’s Q3 results. The analyst noted that the bank is “hitting on all cylinders” and that present share levels provide an “excellent entry point” for a “quality franchise.”

According to Insider Monkey’s Q3 data, 110 hedge funds were long JPMorgan Chase & Co., compared to 104 funds in the earlier quarter. Ken Fisher’s Fisher Asset Management is the largest shareholder of the company, with 7.85 million shares worth $821 million. 

Here is what Vltava Fund has to say about JPMorgan Chase & Co. in its Q3 2022 investor letter:

“We regard JPM to be the strongest and best- managed bank in the world. It is a leader in investment banking, commercial banking, credit cards, and asset management. Its size (the largest bank in the USA, with nearly USD 4,000 billion in assets) and diversification give it a strong competitive advantage that is compounded by its cost advantages and the high costs to clients associated with switching banks. JPM’s management prides itself on running the only large bank to avoid major instability over the long term.

JP Morgan’s quality and strength first became fully evident in 2008 under the leadership of its CEO Jamie Dimon. Not only did JP Morgan help to stabilize the market by taking over the failing Bear Stearns in the spring of that year, but throughout the Great Financial Crisis it was the only big US bank that did not require government assistance and it was highly profitable even in the difficult year of 2008.

A well-functioning and efficient bank can be a very good long-term investment, because the interest compounding effect works well here. JPM’s return on equity (ROE) is well into the double digits and this puts it in a good position to continue producing better long-term returns than does the market. JPM has been very profitable even during years when interest rates were close to zero. The current – and perhaps not temporary – return to somewhat more normal, higher interest rates should have a significantly positive impact on the bank’s interest income and overall profitability.”

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 140

Citadel Investment Group’s Stake Value: $677,043,000

Apple Inc. has been part of the Citadel portfolio since the last quarter of 2010. The hedge fund, as of Q3 2022, raised its stake in Apple Inc. by 1075%, holding 4.89 million shares worth $677 million, representing 0.15% of the total 13F securities. On November 15, Apple Inc. CEO Tim Cook observed that the company would source some of its chips from Arizona as the company seeks to diversify its supply chain. 

On November 14, JPMorgan analyst Samik Chatterjee noted that the impact of the latest supply chain constraints Apple Inc. is facing at its assembly facility in Zhengzhou, China is hard to quantify. However, he believes that iPhone demand remains resilient and reiterated an Overweight rating on Apple Inc. with a $200 price target.

According to Insider Monkey’s Q3 data, 140 hedge funds were long Apple Inc., compared to 128 funds in the earlier quarter. Warren Buffett’s Berkshire Hathaway is the biggest position holder in the company, with 894.80 million shares worth $123.60 billion. 

Here is what Wedgewood Partners specifically said about Apple Inc. in its Q3 2022 investor letter:

“Apple Inc. grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”

2. Tesla, Inc. (NASDAQ:TSLA)

Number of Hedge Fund Holders: 88

Citadel Investment Group’s Stake Value: $715,497,000

Ken Griffin has been a long-term stakeholder of Tesla, Inc., holding a position in the company since Q4 2010, apart from minor breaks over the years. In Q3 2022, Griffin boosted his Tesla, Inc. stake by 1241%, disclosing nearly 2.7 million shares worth $715.5 million. 

On November 10, Wedbush analyst Daniel Ives removed Tesla, Inc. from the firm’s “Best Ideas” list, noting that in the near-term things are “increasingly becoming more challenged,” though his long-term bullish view of Tesla, Inc. remains generally intact. He sees “a very nervous few months ahead for Tesla investors” as they “remain the ones that have been punched again and again by the Musk Twitter antics”. Although the stock is “deep in the investor penalty box until deliveries hit in early January,” he maintained an Outperform rating on Tesla, Inc. shares.

According to Insider Monkey’s data, 88 hedge funds were long Tesla, Inc. at the end of Q3 2022, compared to 73 funds in the prior quarter. Cathie Wood’s ARK Investment Management held a leading stake in the company, with more than 4 million shares worth $1.08 billion. 

Alger Capital made the following comment about Tesla, Inc. in its Q3 2022 investor letter:

“Tesla, Inc. is an electric vehicle manufacturer with a significant technological lead in its large and rapidly growing addressable market. Shares outperformed during the quarter despite covid 19 shutdowns at the company’s shanghai production plant early in the period. During this quarter, the company also ramped up production at its newer Germany and Texas plants. While investors were aware of these challenging variables, the company’s quarterly results exceeded expectations thanks to lower-than-expected operating expenses. Investors are aware that ramping up electric vehicle production is challenging and recognize it’s difficult to estimate production rates.”

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 269

Citadel Investment Group’s Stake Value: $1,046,208,000

Ken Griffin’s Citadel Group lifted its stake in Amazon.com, Inc. by 94% in Q3 2022, holding 9.25 million shares worth $1.04 billion, representing 0.23% of the total 13F securities. Griffin has been a long-term position holder in Amazon.com, Inc.. 

On November 18, Erste Group analyst Hans Engel downgraded Amazon.com, Inc. to Hold from Buy. The “outlook for earnings development has deteriorated in recent weeks,” the analyst told investors in a research note. He said Amazon.com, Inc. recently reported a meaningful weakening of profitability in the retail business.

Among the hedge funds tracked by Insider Monkey, 269 funds reported owning stakes worth $34.60 billion in Amazon.com, Inc. at the end of Q3 2022, compared to 252 funds in the prior quarter worth $30 billion. Jaime Sterne’s Skye Global Management is a prominent stakeholder of the company, with 15.5 million shares valued at $1.75 billion. 

Baron Funds made the following comment about Amazon.com, Inc. in its Q3 2022 investor letter:

“Amazon.com, Inc. is the world’s largest e-commerce retailer and cloud services provider. Shares of Amazon increased 6% in the quarter after the company reported strong results with 7% year-over-year revenue growth driven by 33% growth in Amazon Web Services (AWS), Amazon’s leading cloud computing service, while guiding for an acceleration in third quarter revenue growth, which is expected to be between 13% and 17% year-over-year. Amazon’s share of e-commerce is roughly 40%, far ahead of competition, yet domestic e-commerce accounted for only 14.5% of total retail sales (according to U.S. Census Bureau data for the second quarter of 2022), implying durable growth opportunities ahead. Internationally, the opportunity remains large as Amazon still has less than a 2% market share of international retail spending. Its advertising share is also only 3% and growing, underpinned by the structural closed-loop systems it enables (merchants know exactly whether their ad dollars resulted in a purchase since they are all done on the Amazon platform), which enables accurate targeting and measurement. Lastly, AWS has a good runway for growth as the industry still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”

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This article is originally published at Insider Monkey.