The markets were off to an impressive start in 2024, driven by expectations that the US Federal Reserve will embark on interest rate cuts. However, data is now showing that inflation remains sticky and the labor market tight, causing new concerns regarding the Fed's possible path towards rate cuts. In this environment it makes sense to look towards masters of the money game.
Ken Griffin is one of the hedge fund managers well-positioned to benefit from the ever-evolving financial landscape. The mastermind behind Citadel Investment Group, which he founded in 1990 with $4.2 million, continues to experience a surge in success. The legendary investor set a record with a remarkable return of 153% in 2022 as he got everything right with his strategic bets on inflation and interest rates.
With a portfolio value of over $460 billion, Citadel Investment Group is one of Wall Street's most tracked hedge funds, consistently surpassing 25% annual returns since 2016. While the hedge fund operates several portfolio funds, its lead fund is Wellington, which invests in various asset classes and sectors as part of its diversification strategy.
In 2022, Griffin’s flagship Wellington fund delivered 38% returns above the 26% returns that it delivered in 2021, upon topping the 24% gain in 2020. The fund was also up 19.4% in 2019, more than double the 9.1% gain in 2018.
Griffin's hedge fund deploys a multi-strategy investing method that allows it to take advantage of long and short-term investment opportunities. In 2023, when the hedge fund industry came under immense pressure and ended up averaging a 4.4% gain, Citadel outperformed the entire industry, delivering solid returns of 15.3%.
The flagship fund had an excellent start to 2024, achieving a 1.9% increase in the first month as all employed strategies across commodities, equities, fixed income, credit, and quantitative sectors yielded positive results. Griffin expects the momentum to continue throughout the year as he remains bullish about the US economy amid the expected interest rate cuts.
"The Federal Reserve can start cutting rates this summer, and we will see unemployment increase slightly. But the overall economy looks pretty damn good right now,” Griffin said at the MFA Network event in Miami. “This is a real change in mindset from where we were September, October last year.”
Citadel Group generated a profit of $7 billion in 2023. Nevertheless, it was an underperformance, considering a 38% profit jump in 2022 to $16 billion. Similarly, Citadel Investment Group has kept its tradition of returning significant value to shareholders. It has returned over $25 billion since 2018.
Griffin's impressive performance in the market has everything to do with his focus on large-cap, high-growth stocks. Citadel Investment Group boasts significant holding in the magnificent 7 stocks led by Tesla, Inc. (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc. (NASDAQ:META), and Amazon.com, Inc. (NASDAQ:AMZN). The stocks posted double-digit gains in 2023.
Amid the aggressive investment style focusing on high-growth technology stocks, Griffin is also a value investor who often looks for opportunities in small-cap and penny stocks. With a net worth of $35 billion, the billionaire investor employs 18,000 people to scan the best high-risk reward opportunities.
13 Best Penny Stocks to Buy According to Billionaire Ken Griffin
Ken Griffin of Citadel Investment Group
Our Methodology
We scanned billionaire Griffin's portfolio and picked 13 penny stocks he's holding. We also checked price targets of these stocks set by Wall Street analysts and mentioned upside potential of these equities based on these targets. Hedge funds' top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That's why we pay very close attention to this often-ignored indicator.
Best Penny Stocks to Buy According to Billionaire Ken Griffin
Gaucho Group Holdings, Inc. (NASDAQ:VINO) is a real estate company that invests in, develops and operates real estate projects in Argentina. Gaucho Group Holdings, Inc. (NASDAQ:VINO) owns and operates boutique hotels, hospitality, and luxury vineyard property markets.
Ken Griffin's Citadel Investment Group was the firm's biggest shareholder as of Q1, owning $20,780 worth of stakes.
With a history of successful turnarounds, Farmer Bros. Co. (NASDAQ:FARM) delivered solid fiscal second-quarter results whereby sales came in flat at $89.5 million, with earnings jumping to 13 cents a share from a loss of 73 cents a share delivered in the same quarter the previous year. While Farmer Bros. Co. (NASDAQ:FARM) went down 34% last year, it commands an average 'Buy' rating on Wall Street with a $6 price target implying 62% upside potential from current levels.
Overall, 5 out of the 933 hedge funds profiled by Insider Monkey during Q4 2023 were Farmer Bros Co (NASDAQ:FARM) shareholders. In Q4, the largest hedge fund shareholder was Mario Gabelli's GAMCO Investors, who owned shares worth $2.38 million.
Based in New York, Acacia Research Corp (NASDAQ:ACTG) is one of the best penny stocks to buy in the industrial sector, according to billionaire Ken Griffin.
In Q4 2023, 14 of the 933 hedge funds in Insider Monkey's database bought the firm's shares. Acacia Research Corp (NASDAQ:ACTG)'s largest hedge fund investor, Jeffrey Smith's Starboard Value LP, owns 61.12 million shares worth $239.60 million.
Five Point Holdings, LLC (NYSE:FPH) is a real estate company that acquires, owns, and develops mixed-use and planned communities in California. The company sells residential and commercial land sites to home builders, commercial developers, and commercial buyers.
After digging through 933 hedge fund portfolios for Q4 2023, Insider Monkey discovered that 14 had invested in Five Point Holdings, LLC (NYSE:FPH). Christian Leone's Luxor Capital Group was the largest investor in the following quarter due to its $32.46 million stake.
Here is what O'Keeffe Stevens Advisory said about Five Point Holdings, LLC (NYSE:FPH) in its fourth quarter 2023 investor letter:
"Top picks for 2024 – Five Point Holdings, LLC (NYSE:FPH) and Aercap (AER). Both situations are similar, with significant overhangs resolved in late 2023. Five Point had a debt problem, with $625m coming due in 2025, with no credible path to repay or refinance. In addition, former CEO Emile Haddad ran the business as a personal cash cow. Since Dan Heian took over, the business has run lean, and cash generation is prioritized. In December, they announced a debt exchange offering, exchanging the 2025 notes for 2027 notes with a higher interest rate while repaying ~$100m of the balance. These additional years, combined with laser focus from management, set this Company up for success in 2024 and beyond."
Kezar Life Sciences, Inc. (NASDAQ:KZR) discovers and develops novel small molecule therapeutics for treating unmet immune-mediated disease and cancer needs.
As of December 2023, 16 of the 933 hedge funds profiled by Insider Monkey were Kezar Life Sciences, Inc. (NASDAQ:KZR) shareholders. Aaron Cowen's Suvretta Capital Management owned the most significant stake in Q4 2023, worth $6.79 million.
Accuray Incorporated (NASDAQ:ARAY) is a healthcare company that designs, develops, manufactures, and sells radiosurgery and radiation therapy systems for treating tumors. Accuray Incorporated (NASDAQ:ARAY) offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used to treat primary and metastatic tumors outside the brain.
As of the end of the fourth quarter of 2023, 16 hedge funds out of the 933 funds tracked by Insider Monkey had stakes in Accuray Incorporated (NASDAQ:ARAY). Constantinos J. Christofilis's Archon Capital Management was the biggest hedge fund stakeholder, which owns $18.4 million worth of Accuray Incorporated (NASDAQ:ARAY) shares.
Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS) is a clinical-stage biopharmaceutical company that discovers and develops therapies for treating Alzheimer's. ACU193 is Acumen Pharmaceuticals, Inc. (NASDAQ:ABOS)'s candidate drug that leverages a unique mechanism of preventing AβOs from binding to dendritic spines, thus preventing Alzheimer's.
Denison Mines Corp. (NYSE:DNN) is a uranium exploration and development company. The company owns 95% interest in its flagship Wheeler River Uranium Project, the largest undeveloped uranium project in the infrastructure-rich eastern portion of the Athabasca Basin region.
Denison Mines Corp. (NYSE:DNN) has moved to position itself as a leading uranium producer of uranium after the completion of the Phoenix feasibility study. Denison Mines Corp. (NYSE:DNN) delivered impressive earnings in its recent quarter, driven by a significant increase in uranium price to US$91/lb. U3O8 at year end.
The uranium exploration stock was up 36% in 2023 and is currently rated as a ‘Buy’ with an average price target of $3.02, implying 632% upside potential from current levels.
After digging through 933 hedge funds for their fourth quarter of 2023 investments, Insider Monkey discovered that 19 were the firm's shareholders. Denison Mines Corp. (NYSE:DNN)'s biggest hedge fund investor during Q4 2023 was Steve Cohen's Point72 Asset Management courtesy of its $17 million investment.