Billionaire Ken Griffin Is Buying These Warren Buffett Stocks Hand Over Fist. Should You?
November 29, 2024
0 4 minutes read
Warren Buffett and Ken Griffin share a few things in common. First, they’re both billionaires and highly respected investors. They’re both also philanthropists.
However, the two men have different investing styles — just look at their holdings. Buffett’s Berkshire Hathaway portfolio includes only 43 stocks and exchange-traded funds (ETFs). Griffin’s Citadel Advisors hedge fund owns positions in over 5,700 stocks and ETFs.
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There’s some overlap in the two billionaire investors’ portfolios, though — even more so after the third quarter of 2024. Griffin bought these four Buffett stocks hand over fist in Q3.
Buffett (or one of his two investment managers) reduced Berkshire’s position in Capital One Financial(NYSE: COF) by 7.3% in Q3. The financial services stock is a small holding for Berkshire and a relatively short-term one. The conglomerate initiated a new position in Capital One in the first quarter of 2023.
While Buffett or his team were selling, Griffin was buying. He purchased another 1.6 million shares of Capital One Financial for Citadel in Q3. This move increased the hedge fund’s stake by nearly 483%.
Why the different directions with Capital One? Buffett has been hoarding cash for Berkshire Hathaway, and I suspect Capital One isn’t one of his high-conviction stocks. On the other hand, Griffin could be building his position in the company as it awaits a decision on its pending merger with Discover Financial Services.
It was a similar story for Buffett and Charter Communications(NASDAQ: CHTR) in Q3. Berkshire sold over 1 million shares of the telecommunications company, reducing its stake by 26.3%.
However, Griffin was busy adding to Citadel’s position in Charter. He increased his hedge fund’s position in the stock by roughly 60.8% in Q3, owning 1.86 million shares at the end of the quarter.
So far, Griffin’s decision appears to be the smarter one. Charter’s share price has soared 20% since the end of Q3, driven primarily by positive quarterly earnings results, with free cash flow increasing $1.1 billion year over year.
Buffett didn’t sell any of Berkshire’s shares of Citigroup(NYSE: C) in Q3. In fact, he’s never sold any of his stake in the financial services giant since initiating a position in the first quarter of 2022.
Griffin dramatically boosted Citadel’s position in Citigroup in Q3, increasing its stake by 455%. At the end of the quarter, his hedge fund owned over 8 million shares.
This purchase is already paying off. Citigroup stock is up 11% since the end of Q3. Some investors could be banking (no pun intended) on reduced regulations for the financial services industry in a second Trump administration.
Buffett has owned a position in Mastercard(NYSE: MA) since 2012. He has neither bought nor sold shares of the payment processing company over the last three years.
Griffin, though, scooped up 350,000 additional shares of Mastercard in Q3. This increased Citadel’s stake in the company by roughly 51%.
Mastercard has performed well since Griffin’s purchase. The company reported 13% year-over-year net revenue growth in Q3, with adjusted earnings jumping 12%. Its stock has risen around 7% since the end of Q3.
Buffett has his reasons for owning all four of these stocks, and Griffin has his reasons for buying all of them in Q3. Should you buy them, too?
I’m not especially enamored with Capital One Financial or Charter Communications. However, I think income investors might like Citigroup’s forward dividend yield of 3.2%.
My favorite of this group is Mastercard. The company should continue to benefit from the shift from cash to electronic payments. Mastercard is also effectively using technology, including artificial intelligence (AI), to drive profits. I view this stock as a good long-term pick for growth investors.
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Discover Financial Services is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. Keith Speights has positions in Berkshire Hathaway and Mastercard. The Motley Fool has positions in and recommends Berkshire Hathaway and Mastercard. The Motley Fool recommends Discover Financial Services and recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.
