Hess Corp., Amazon.com, and Bank of America were the three largest buys (in terms of percentage of overall portfolio) in billionaire investor Ken Griffin’s holdings in the first quarter of Fiscal 2024. Apart from these, one of Griffin’s largest buys was 4,359,253 shares of Pioneer Natural Resources, which was merged with Exxon Mobil (NYSE:XOM), effective May 3. Griffin, an ace hedge fund manager, runs one of the most famed and profitable hedge funds, Citadel LLC, since 1990.
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As of March 31, Citadel had a 2.29% stake in Pioneer Natural, which would have been converted into XOM stock based on the stock exchange ratio.
Citadel took the numero uno spot in the asset management industry in terms of total returns generated in 2023. As of date, Citadel manages roughly $60 billion in assets under management (AUM). As per reports, Citadel’s returns outpaced those of its rivals in Q1, once again proving Griffin’s investment expertise.
#1 Hess Corp. (NYSE:HES)
Hess Corp. is an American multinational independent energy company involved in the exploration, development, and production of crude oil and natural gas. During Q1, Citadel bought 8,815,580 shares of Hess, representing a staggering 1,686% change from its prior-quarter holding. After the latest purchase, Citadel now owns 9,338,363 shares of Hess (3.02% equity stake), which now represents 0.27% of Citadel’s total portfolio.
Experts suggest that Griffin is loading up HES shares in anticipation of the long-pending $53 billion acquisition by oil giant Chevron Corp. (NYSE:CVX). If the acquisition goes through, Citadel will earn a huge premium on the HES shares in exchange for CVX shares.
Hess pays a regular quarterly dividend of $0.44 per share, carrying a current yield of 1.16%. However, its dividend yield is not as high as the industry average of 3.75%. Importantly, Hess has managed to exceed earnings expectations in all past eight consecutive quarters, implying solid financials.
Is Hess a Good Buy?
In contrast to Griffin’s bullish stance on HES stock, Wall Street analysts prefer to remain on the sidelines. On TipRanks, HES stock has a Hold consensus rating based on two Buys and six Hold ratings. The average Hess Corp. price target of $178 implies 17.6% upside potential from current levels. In the past year, HES shares have gained 18.4%.
#2 Amazon.com (NASDAQ:AMZN)
Citadel’s portfolio is habitually invested in the technology sector, especially the MATANA stocks. In Q1, Griffin added more shares of the ever-growing e-commerce behemoth Amazon.com to the portfolio.
During the quarter, Citadel bought 352,453 shares of Amazon, reflecting a 5.66% change in holding compared to the December quarter. Following this purchase, Citadel now has Amazon shares worth $1.19 billion (0.23% of total portfolio).
Amazon is poised for exceptional growth going forward based on its robust e-commerce business, rapidly expanding Amazon Web Service (AWS) division, and booming digital advertising business.
Is Amazon a Buy, Hold, or Sell?
AMZN stock commands a Strong Buy consensus rating on TipRanks. The average Amazon.com price target of $220.60 implies 22.1% upside potential from current levels. AMZN shares have gained 48.6% in the past year.
#3 Bank of America (NYSE:BAC)
Bank of America is also one of the companies in which Griffin bought additional shares during the first quarter. BAC is a universal banking giant with operations spread across the entire globe, offering several financial services to customers.
In Q1, Griffin bought 22,434,948 shares of BAC, growing its stake by 389.4% compared to Q4 FY23. Citadel now owns 0.35% of the company. There are now 28,195,796 shares of BAC in Citadel’s coffers.
Remarkably, BAC pays an above-industry average dividend of $0.24 per share, implying a 2.37% yield. BAC’s shares dipped after the company reported a drop in net interest income, an increase in provision for credit losses, and a decline in net income in its Q1 FY24 results. Even so, the stock has gained 40.5% in the past year.
Is BAC a Good Buy Right Now?
Wall Street remains divided on BAC’s share trajectory. On TipRanks, BAC stock has a Moderate Buy consensus rating, backed by 12 Buys, 11 Holds, and one Sell rating. The average Bank of America price target of $39.71 implies that shares are almost fully valued at current levels.
Key Takeaways
Ken Griffin has a proven track record of earning stellar returns for clients based on his stock-picking expertise. Investors can consider Griffin’s stock picks for their portfolios after thorough research.
