In this piece, we will take a look at Citadel Investment's latest stock holdings and the top 12 energy stocks in its portfolio. If you want to skip our introduction to the multi billionaire dollar hedge fund and what its founder believes is in store for the markets and the economy, then take a look at Citadel Stock Holdings: 5 Biggest Energy Stocks.
With the third quarter hedge fund filing season with us in full flow, it's time to take a look at what the master investors are doing. This year has been a topsy turvy ride for stock markets, and it can very well be argued that had investors not piled into technology stocks in H1 2023 due to the optimism surrounding artificial intelligence, then until November, stocks would have been flat or down.
However, November is proving to be a boon for markets. This is because the inflation data for October not only showed a marked sequential drop from September but also ended up undershooting consensus estimates. This caused stocks to rally, with major U.S. stock indexes such as the NASDAQ Composite and the S&P 500 rising by more than a percent within an hour of opening. With the latest inflation data, the focus on Wall Street has now shifted to when the Federal Reserve will start cutting interest rates as opposed to whether it will deliver another rate hike.
One of the biggest threats to the dissipating economic clouds right now is the global energy industry. The energy sector was dead center of the 2022 stock market sell off, the effects of which are still lingering as the S&P 500 is still down from its December 2021 closing. The Russian invasion of Ukraine upended global energy supply chains and it saw global oil prices shoot up. This ended up pushing inflation to record high levels and spurred central banks to deal hefty economic blows by jacking up the policy rate.
With less than half a quarter left until 2023's close, there is a risk that a resurgence in global oil prices could make inflation rear its head once again. If it does, then markets might very well start to fall again as investors price in higher interest rates. Right now, particularly after the bombshell October inflation report, this might be particularly painful for investors since November is perhaps the first time in more than a year that they can wholeheartedly look forward to stock market growth.
Yet, as the conventional energy segment is as turbulent as ever, there is a lot of optimism in the clean and alternative energy area. This is because according to the International Energy Agency's (IEA) World Energy Employment report, more than half of the total energy industry employment growth in last year was in sectors such as solar panels, electric cars, metal mining, and heat pumps. All these sectors are part of the renewable energy industry, and they seek to decrease the world's reliance on polluting petroleum fuels. The IEA outlines that solar energy led within the alternative energy sector as it employed four million people.
Even though the stock market might fall and cause losses all around, this doesn't mean that everyone loses money. One of the best examples of this fact is billionaire Ken Griffin's hedge fund, Citadel Investment Group. Citadel is the ninth biggest hedge fund in the world in terms of net assets, as it controlled $62 billion as of June 2023. The firm's investment portfolio, which is measured through its direct stock holdings and the non market value of options, sat at $466 billion as of Q3 2023 end. So why is Mr. Griffin's fund the right one to study if one wants to know how to make money when others are losing it? Well, the answer is simple. Citadel was the world's best performing hedge fund in 2022, a torrid time for the industry overall that saw hundreds of billions of dollars in losses.
So, what does the investment guru believe is in store for us in the future? Well, Mr. Griffin believes that one of the most important indicators that we need to be watching right now is the labor market as according to him:
And I think there's a couple of really important questions that will come into bear at that moment in time that should influence one's view as to how deep this recession is going to be. Number 1 is what's going to happen to the fiscal policy of the United States. For choice, we think next year fiscal policy will not tighten that much. We're heading into a presidential election. It's really hard for politicians on either side of the aisle. What we need to do, which is to reign in our deficit spending in front of a presidential election. It's just going to be really hard politically to get there next year on that front.
The second real question next year is how much will companies start to unwind the labor hoarding that we've seen over the last couple of years. It's been really hard to hire people. And as such large companies have been really reticent to let people go no matter what the circumstances are. So even if margins are contracting, even if you have gains from automation, people have been very reticent to let people go. Now we're starting to see for the first time that unwinding of that labor hoarding. What we don't know is how much of that labor hoarding as taken place. And what worries me, in a hybrid work environment, or work from home environment, the cultural or social contract that holds people together in a company is unquestionably weaker. I mean we've all read about companies that have fired thousands of people on Zoom calls. There's no sense of 'that's Jane, whose worked down the hall with me for years and I'm going to go the extra distance to try to keep Jane employed here'. It's like 'here's the email to all, here's the video conference for the bunch of people, and goodbye'.
It's a very different moment in American employment history, where I believe the bond between the company and the employee has become far weaker. And that worries me in terms of the willingness of corporate America to make cuts on their workforce they just won't have made at other similar points in the labor market cycle.
With the business world being as dynamic as ever and some interesting times ahead of us, we decided to look at Ken Griffin's top energy stock picks and the leading names are PG&E Corporation (NYSE:PCG), BP p.l.c. (NYSE:BP), and Chevron Corporation (NYSE:CVX).
Ken Griffin of Citadel Investment Group
To compile our list of Ken Griffin's top energy stocks, we took a look at Citadel Investment's Q3 2023 investment portfolio and selected the energy and utility companies in which the firm has invested the most money.
Citadel Stock Holdings: 12 Biggest Energy Stocks
12. Chord Energy Corporation (NASDAQ:CHRD)
Citadel Investment's Q3 2023 Investment: $138 million
Chord Energy Corporation (NASDAQ:CHRD) is a small oil and gas exploration company headquartered in Houston, Texas. The firm has been busy expanding and modernizing its production, as during its third quarter, Chord Energy Corporation (NASDAQ:CHRD) expanded the presence of three mile wells which improve production efficiency.
As of this year's second quarter, 37 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Chord Energy Corporation (NASDAQ:CHRD). Ken Griffin's Citadel Investment Group owned the largest stake in Chord Energy in Q3 which was worth $138 million and came via 852,357 shares.
Along with BP p.l.c. (NYSE:BP), PG&E Corporation (NYSE:PCG), and Chevron Corporation (NYSE:CVX), Chord Energy Corporation (NASDAQ:CHRD) is a top Citadel Investment energy stock pick.
11. Evergy, Inc. (NASDAQ:EVRG)
Citadel Investment's Q3 2023 Investment: $140 million
Evergy, Inc. (NASDAQ:EVRG) is a small utility company that sells electricity in multiple American states. Not only is it a top Ken Griffin energy stock, but the third quarter was particularly notable for Evergy, Inc. (NASDAQ:EVRG) as his hedge fund increased its investment by a strong 1,434%.
After digging through 910 hedge funds for their second quarter of 2023 investments, Insider Monkey discovered that 27 were the firm's shareholders. Evergy, Inc. (NASDAQ:EVRG)'s biggest hedge fund investor during Q3 2023 was Ken Griffin's Citadel Investment Group courtesy of its $140 million investment.
10. Ovintiv Inc. (NYSE:OVV)
Citadel Investment's Q3 2023 Investment: $146 million
Ovintiv Inc. (NYSE:OVV) is an oil and gas production company with operations in the U.S. and in Canada. As it did with Evergy, Inc. (NASDAQ:EVRG), Griffin's hedge fund significantly increased its exposure in Ovintiv Inc. (NYSE:OVV) during the third quarter. Additionally, the stock is also one of the most undervalued energy stocks that hedge funds were buying in Q2 2023.
Overall, 24 out of the 910 hedge funds profiled by Insider Monkey were the firm's investors during the same time period. Ovintiv Inc. (NYSE:OVV) largest stakeholder in the following quarter was Ken Griffin's Citadel Investment Group as it owned three million shares that are worth $146 million.
9. ONEOK, Inc. (NYSE:OKE)
Citadel Investment's Q3 2023 Investment: $181 million
ONEOK, Inc. (NYSE:OKE) is one of the older oil and gas firms on our list since it was set up in 1906. In terms of market capitalization, it was the eighth biggest midstream oil company in the world as of mid November 2023. The firm made a big announcement earlier this year when it bought a peer firm for a cool $18 billion price tag.
For their June quarter of 2023 shareholdings, out of the 910 hedge funds polled by Insider Monkey, 35 had bought ONEOK, Inc. (NYSE:OKE)'s shares. In the subsequent period, Paul Marshall and Ian Wace's Marshall Wace LLP was the company's biggest investor due to its $201 million stake.
8. Occidental Petroleum Corporation (NYSE:OXY)
Citadel Investment's Q3 2023 Investment: $185 million
Occidental Petroleum Corporation (NYSE:OXY) is a mid-sized American oil and gas exploration and production company. As the media focuses on the third quarter of 2023 hedge fund filings to see where the smart money is heading, the 'smartest' money is already making big moves in the fourth quarter. Why? Well, an SEC filing reveals that Warren Buffett's Berkshire Hathaway bought 3.7 million Occidental Petroleum Corporation (NYSE:OXY)'s shares in late October which were valued at roughly $240 million. This added to Berkshire's sizeable $14 billion investment in the firm as of Q3 2023 end.
Overall, 73 out of the 910 hedge funds profiled by Insider Monkey during Q2 2023 were Occidental Petroleum Corporation (NYSE:OXY) shareholders. In Q3, the largest hedge fund shareholder was Berkshire Hathaway.
7. Targa Resources Corp. (NYSE:TRGP)
Citadel Investment's Q3 2023 Investment: $203 million
Targa Resources Corp. (NYSE:TRGP) is another oil and gas midstream company. Its shares are rated Strong Buy on average and analysts have set an average share price target of $106.85.
For their June quarter of 2023 shareholdings, 35 hedge funds among the 910 hedge funds surveyed by Insider Monkey were the firm's investors. Targa Resources Corp. (NYSE:TRGP)'s biggest stakeholder in the September quarter was Stuart J. Zimmer's Zimmer Partners as it held a $204 million investment in the company.
6. Sempra (NYSE:SRE)
Citadel Investment's Q3 2023 Investment: $205 million
Sempra (NYSE:SRE) is a major American utility that serves the energy needs of San Diego and South California. Despite a slowing economy and lower energy prices. Sempra (NYSE:SRE) has performed financially well as it has beaten analyst EPS estimates in all four of its latest quarters.
After digging through 910 hedge fund portfolios for Q2 2023, Insider Monkey discovered that 30 had invested in Sempra (NYSE:SRE). Ken Griffin's Citadel Investment Group was the largest investor in the following quarter due to its $205 million stake.
PG&E Corporation (NYSE:PCG), Sempra (NYSE:SRE), BP p.l.c. (NYSE:BP), and Chevron Corporation (NYSE:CVX) are some of Ken Griffin's latest top energy stocks.
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Disclosure: None. Citadel Stock Holdings: 12 Biggest Energy Stocks is originally published on Insider Monkey.