A look at Ken Griffin’s staggering $7 billion take on the Citadel

By | December 23, 2023

Citadel founder and CEO Ken Griffin is one of the most successful investors of all time, managing more than $62 billion in assets. He is also the founder of Citadel Securities, the largest market making firm for the New York Stock Exchange and one of the largest designated market makers in the world. Citadel Securities is involved in one in four stock transactions on U.S. exchanges and nearly 40% of all retail transactions.

With a net worth of $37.5 billion, Griffin is one of the richest hedge fund managers in the world and ranks number 37 on the Forbes real-time billionaires list. His investments have produced significant profits, as he returned $7 billion to clients last year after profits rose more than 30%.

Griffin expects to deliver similar returns for investors this year as its investment strategy generates excellent returns. Citadel’s multi-strategy fund Wellington has gained almost 15% through November, making it one of the best-performing hedge funds this year. An inside source told Reuters that Citadel plans to divest about $7 billion in profits to investors this year to keep its total assets under management at $58 billion from 2024.

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Beyond individual stock positions, Griffin is a big proponent of passive ETF investing, as approximately 1.12% of Citadel’s portfolio is invested in SPDR S&P 500 ETF, making it the company’s third largest holding.

Check out some of the top stocks in Griffin’s portfolio.

Microsoft

Microsoft Corp. (NASDAQ:MSFT) is Citadel’s largest holding, accounting for 1.72% of the total portfolio. Microsoft’s blockbuster performance this year has earned Griffin significant gains, as the company’s shares rose more than 55% this year.

Citadel also owned 15.02 million shares of Activision Blizzard Inc. from the third quarter ending September 30. Griffin’s fund bought shares of Activision Blizzard for about $87.06 per share, which were acquired by Microsoft on Oct. 13 for $95 each. have made almost $120 million from this acquisition.

Microsoft’s growing reach in artificial intelligence has also generated significant revenue for Griffin, as Magnificent Seven stock increased its quarterly dividends by more than 10% to $0.75 on November 15. Microsoft currently pays $3 in dividends per share, yielding 0.81%. at the current price. This should be a nice payday for Griffin, who owns 5.04 million shares of Microsoft through Citadel LLC.

Boston Scientific

Boston Scientific Corp. (NYSE:BSX), one of the largest medical device manufacturers in the US, is Citadel’s second-largest holding company as of September 30. Through his hedge fund, Griffin owns 21.16 million shares of Boston Scientific, accounting for 1.21% of his portfolio.

Shares of Boston Scientific are up nearly 20% year to date, hitting their all-time high of $55.68 on December 13. Griffin purchased shares of Boston Scientific at an average price of $47.63 per share.

The company’s strong financials and growth prospects make it an attractive purchase. In the third quarter, Boston Scientific’s net sales increased 11.2% year over year to $3.53 billion. Net income rose 190.2% from the same period last year to $505 million, translating into earnings of $0.34 per share.

Analysts expect this momentum to continue, as the consensus revenue estimate of $3.59 billion for the fourth quarter ending this month indicates 10.8% year-over-year growth.

“We are well positioned for the long term, supported by our category leadership strategy, a strong innovation pipeline and a track record of strong commercial execution,” said Mike Mahoney, chairman and CEO of Boston Scientific.

Nvidia

Nvidia Corp. (NASDAQ:NVDA), the best-performing Magnificient Seven stock so far this year, is one of Citadel’s top holdings, accounting for 0.97% of its portfolio. Nvidia is up more than 242% so far this year, surpassing $1 trillion in market cap in May.

Nvidia’s revenue rose 206% year over year to $18.12 billion in its fiscal third quarter ended Oct. 29. Operating income rose 1,633% from the same period last year to $10.42 billion. Earnings per share (EPS) came in at $3.71, up 1,274% year over year.

Analysts expect the company’s revenue to rise more than 200% year-over-year to $18.4 billion in the quarter ending in January. The consensus EPS estimate of $4.12 for the current quarter indicates 368% year-over-year growth.

Despite posting gains of nearly 250% over the past year, Nvidia is well positioned to continue rising as analysts remain bullish on the stock. Investment bank Stifel has a buy rating on the stock with a price target of $665, reflecting potential upside of more than 32%.

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This article Show Me The Money: Inside Ken Griffin’s Citadel’s Breathtaking $7 Billion Return originally appeared on Benzinga.com

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