Ken Griffin, the founding father of Citadel, is an influential albeit controversial determine within the funding business. Ken Griffin tasted early success whereas buying and selling throughout his faculty days, and it’s secure to say that he has by no means seemed again since. Regardless of enormous setbacks through the monetary disaster of 2008, he used his abilities and dedication to make a comeback the place many others would have merely closed the fund and moved on.
The billionaire investor at present manages property price round $65 billion throughout his funds. Owing to its giant measurement and observe file of success, Ken Griffin’s inventory strikes typically make it to the information and are carefully adopted by buyers. We determined to do the identical, specializing in Mid-cap shares that also had the potential to show into established giants tomorrow.
To provide you with the listing of billionaire Ken Griffin’s 10 midcap inventory picks with enormous upside potential, we checked out his newest 13F holdings and, amongst his important holdings, solely thought-about shares between $10 billion and $40 billion in market cap. We then seemed on the common analyst worth goal on Wall Road and ranked the shares in accordance with their upside potential.
Why are we within the shares that hedge funds pile into? The reason being easy: our analysis has proven that we will outperform the market by imitating the highest inventory picks of one of the best hedge funds. Our quarterly e-newsletter’s technique selects 14 small-cap and large-cap shares each quarter and has returned 373.4% since Could 2014, beating its benchmark by 218 share factors (see more details here).
Billionaire Ken Griffin’s 10 Midcap Inventory Picks with Big Upside Potential
Inventory Upside Potential: 16.82%
Citadel Funding Group’s Stake: $579,542,355
Lululemon Athletica Inc. operates as a retailer, designer, and distributor of technical athletic attire, equipment, and footwear for women and men. It gives tops, pants, jackets, and shorts for athletic actions. The inventory has lastly began recovering its losses, surging over 8% from its April lows.
The corporate stays dedicated to its core specialties and doesn’t stretch its sources by promoting a variety of merchandise like its rivals. It helps the agency to keep up a particular model picture, enabling worth premiums. It additionally helps to construct robust relationships with prospects to drive long-term loyalty. Moreover, LULU additionally prioritizes product design, providing a restricted high-end product vary.
Heading to 2025, the corporate expects income to be within the vary of $11.15 billion to $11.3 billion. It expects income progress of 5% to 7% for the 12 months. Diluted EPS is projected to be between $14.95 and $15.15. With a concentrate on worldwide markets, the agency intends to develop its retail presence by opening 40 to 45 new shops all year long. Nevertheless, gross margin is projected to scale back by roughly 60 foundation factors, pushed by FX headwinds, mounted price deleverage, and tariff will increase.
Regardless that the expansion could not appear spectacular sufficient, the inventory is at present accessible at a ahead PE of slightly below 25, down significantly from its historic common PE of 40. Very like the merchandise it sells, the inventory calls for a premium when the financial system goes good. At present ranges, there’s little doubt that the features will likely be immense as soon as the financial system stabilizes.
Inventory Upside Potential: 22.52%
Citadel Funding Group’s Stake: $331,412,267
DexCom, Inc. operates as a medical gadget firm. The corporate specializes within the improvement, design, and advertising of steady glucose monitoring (CGM) programs. It affords Dexcom Share, Dexcom G6 and Dexcom G7, Dexcom ONE, Dexcom Actual-Time API, and Stelo.
The agency not too long ago obtained FDA clearance for the Dexcom G7 15-Day steady glucose monitoring system. This technique is for diabetic sufferers aged 18 and above. Based on the corporate, G7 15 Days’ launch within the US is anticipated within the latter half of 2025. Administration boasts that this technique is the longest-lasting steady glucose monitoring system accessible available on the market. With a Imply Absolute Relative Distinction (MARD) of 8.0%, additionally it is probably the most correct system. After getting FDA clearance, the corporate’s share worth jumped about 8.8%, reflecting the chance the product brings for the corporate.
DXCM additionally not too long ago confirmed its fiscal 2025 steerage, indicating a 14% income progress. It additionally reiterated its adjusted EBITDA margin and working margin outlook. As per the steerage, the agency expects the adjusted EBITDA margin to be at roughly 30% and the working margin to be at roughly 21%. Nevertheless, the non-GAAP gross margin outlook was lowered to 62% due to inflationary pressures and elevated freight prices. Enhancements are anticipated later within the 12 months with stock normalization.
Inventory Upside Potential: 22.86%
Citadel Funding Group’s Stake: $548,207,180
United Airways Holdings, Inc. is an air transportation providers supplier. It transports cargo and folks by means of the regional fleet and its mainline. The corporate additionally gives upkeep, floor dealing with, frequent flyer award non-travel redemptions, and flight academy providers. The agency was among the many weekly high 5 industrial gainers final week because it noticed a 5.66% surge by week’s finish.
As per latest information, UAL is in talks with JetBlue Airways to accomplice up. The partnership is anticipated to concentrate on enhancing loyalty packages and buyer connectivity. Nevertheless, the main points of this collaboration haven’t been disclosed but. The corporate has already skilled rejection from a federal choose relating to its collaboration with American Airways. So it is no shock that the airline is taking its time this time round to keep away from any regulatory hurdles..
The agency additionally reaffirmed its FY 2025 steerage final month. Primarily based on secure present reserving developments, the corporate anticipates EPS to be in a variety of $11.50 to $13.50 for the 12 months. As a part of capability changes, UAL is planning to lower 4% home capability in Q3 to align with softer demand. Nevertheless, on the again of robust demand within the Atlantic and Pacific areas, administration is assured about profitability within the worldwide markets.
Inventory Upside Potential: 33.59%
Citadel Funding Group’s Stake: $367,530,374
Devon Power Company operates as an unbiased vitality firm. It focuses on the event, exploration, and manufacturing of pure fuel, oil, and pure fuel liquids. The corporate’s share worth has been declining since late 2022, however the enterprise continues to carry out strongly, making it a lovely funding.
DVN ended 2024 in a powerful place. The corporate generated $738 million in free money flows, $444 million of which was returned to shareholders. Out of the $444 million, it allotted $300 million for share buybacks. Aided by the combination of Grayson Mill property and Eagle Ford effectively productiveness, DNV’s oil manufacturing additionally set a brand new file of 398,000 barrels per day.
Primarily based on robust earnings, the agency up to date its 2025 steerage. It’s concentrating on 815,000 Barrels of Oil Equal (BOE) per day. Capital spending was lowered by $200 million from the earlier outlook. Clay Gaspar identified improved operational momentum and capital effectivity from a number of zone initiatives. The agency highlighted plans to enhance annual free money flows by $1 billion, and analysts are loving it.
Capital One Securities’ Phillips Johnston talked about:
The plan itself would not come as a shock, however we predict the dimensions might be a bit bigger than the Road has been anticipating. Significant [free cash flow] uplift potential, so this seems to be extra than simply window dressing.
Inventory Upside Potential: 36.8%
Citadel Funding Group’s Stake: $364,856,219
Align Expertise, Inc. operates as a producer, designer, and marketer of Vivera retainers, Invisalign clear aligners, and iTero intraoral scanners and providers. The corporate generates its revenues by means of Clear Aligner and Imaging Methods, and CAD/CAM Providers segments.
Since its 2023 highs, Align’s inventory has considerably declined. It fell by over 50% within the final 12 months alone. The rationale behind the huge drop in share worth was missed EPS and income targets. Within the final 12 quarters, the corporate has missed income in seven quarters and EPS in 5 quarters. Resultantly, the inventory hasn’t gone anyplace.
Based on the supplied fiscal 2025 outlook, ALGN expects revenues between $1.05 billion to $1.07 billion. For 2025, Clear Aligner quantity progress is anticipated to be mid-single digits YoY. Nevertheless, as a result of progress in rising markets and product combine shift, ASPs are projected to lower. Administration predicts the GAAP working margin to extend by roughly 2 share factors in comparison with the earlier 12 months. As a result of firm’s lengthy historical past and market management, buyers see the present inventory worth drop as a lovely shopping for alternative, although issues in regards to the administration’s potential to ship stay.
Inventory Upside Potential: 37.05%
Citadel Funding Group’s Stake: $650,409,480
Reddit, Inc. is a digital neighborhood operator. Its platform permits customers to analysis new hobbies, interact in conversations, trade items and providers, discover passions, share laughs, create new communities and experiences, and discover belonging.
Analysts at analysis agency Oppenheimer began protection on the corporate with an Outperform score and assigned it a worth goal of $125. The analysis agency expects Reddit to make the most of its person information for impactful advert merchandise. Oppenheimer believes that RDDT focused commercial capabilities and powerful person information will enhance income progress and advertiser demand.
Oppenheimer famous:
Person interactions give Reddit very particular indicators about person pursuits, presenting a really compelling promoting alternative. Whereas early, we imagine Reddit will be capable to launch merchandise for advertisers to focus on related communities at very excessive ROIs,
For Q2 2025, the corporate expects income between $410 million and $430 million, indicating year-over-year progress between 46% and 53%. Adjusted EBITDA is anticipated to be within the vary of $110 million to $130 million. It expects a considerable adjusted EBITDA progress of over 230% year-over-year. Administration highlighted product enhancements, efficiency optimization, and worldwide progress as main drivers of progress sooner or later.
Inventory Upside Potential: 45.88%
Citadel Funding Group’s Stake: $346,451,879
Neurocrine Biosciences, Inc. operates as a developer, discoverer, and marketer of prescribed drugs for neuroendocrine, neuropsychiatric, and neurological problems. Its main product candidates embrace INGREZZA, Efmody capsules, Orilissa tablets, Oriahnn capsules, ALKINDI, and CRENESSITY.
The agency was upgraded by RBC Capital Markets from Sector Carry out to Outperform, highlighting the latest market downturn as a lovely shopping for alternative. Nevertheless, the worth goal was adjusted by RBC analyst Brian Abrahams from $138 to $137, anticipating short-term fluctuations as a result of newest quarter earnings and long-term uncertainty surrounding Medicare drug worth talks.
RBC analysts suppose that the present share worth is an efficient entry level for buyers searching for a dependable biotech.
RBC Capital Markets’ analyst Brian Abrahams said:
Broader sector selloff and market draw back has introduced the inventory to ranges effectively beneath elementary truthful worth, given an Ingrezza business franchise that we count on to be comparatively strong and sturdy long run.
The corporate additionally reaffirmed its 2025 steerage after beating top-line estimates in the newest quarter. Aided by ongoing direct-to-consumer initiatives and an expanded gross sales pressure, Neurocrine anticipates INGREZZA gross sales to succeed in $2.5 billion to $2.6 billion for the total 12 months. No matter potential competitors, this steerage demonstrates continued progress. As a consequence of scientific adoption components and delays in reimbursement processes, the corporate expects CRENESSITY’s income to extend regularly. Furthermore, Part 3 trials for osavampator and NBI-568 are ongoing, with the agency setting apart $60 million to advance its product pipeline throughout 2025.
Inventory Upside Potential: 48.29%
Citadel Funding Group’s Stake: $368,584,632
Block, Inc. operates as an ecosystem builder. It builds ecosystems targeted on monetary and commerce merchandise. The corporate operates within the Money App and Sq. segments. The inventory has been declining for the reason that begin of this 12 months, falling over 45%.
After the discharge of Block’s most up-to-date quarter outcomes, some analysts turned pessimistic. Piper Sandler analyst Arvind Ramnani believes an acceleration within the latter half could also be overly optimistic due to pressured fundamentals. Wall Road’s analysts are additionally involved about weaker Money App spending.
Nevertheless, Mizuho’s Dan Dolev maintained his Outperform score on the inventory, citing the agency’s improved community density and product innovation. He thinks XYZ’s sturdy product innovation and enhanced community density might mitigate the results of a weaker macroeconomic atmosphere.
Primarily based on the steerage, the corporate expects gross revenue progress of 12% for 2025. Adjusted working earnings is anticipated to develop by 19%. Steady GPV progress enhancements are projected all year long. For Q2, Sq.’s GPV progress is projected to attain excessive single digits.
Inventory Upside Potential: 53.21%
Citadel Funding Group’s Stake: $414,128,752
First Photo voltaic, Inc. operates as a photo voltaic know-how firm. The corporate gives photovoltaic (PV) photo voltaic vitality options. It sells and manufactures photovoltaic photo voltaic modules with a skinny movie semiconductor know-how.
FSLR has misplaced one-third of its worth within the span of a 12 months. The fixed downtrend has meant that it trades at a PE of 10.77, significantly beneath the 5-year common PE of 28.62. The worth-to-cash-flow ratio additionally stands at 7.79, approach beneath the 5-year common of 20.04. Other than a handful of photo voltaic shares, the bulk have misplaced appreciable worth this 12 months to date, making the sector a lovely funding.
As per the corporate’s supplied steerage, income is forecasted to be within the vary of $4.5 billion to $5.5 billion for the total 12 months. Anticipating tariff-related headwinds, EPS is anticipated to be between $12.50 to $17.50. As a consequence of unsure demand and excessive tariffs, the agency is planning to scale back worldwide manufacturing. Growing vitality demand from information facilities and AI will likely be an enormous catalyst for photo voltaic vitality.
Inventory Upside Potential: 60.58%
Citadel Funding Group’s Stake: $334,578,325
DraftKings Inc. is a digital sports activities leisure and gaming firm. The corporate affords day by day fantasy sports activities, digital lottery courier, sports activities betting, media, and different merchandise. It additionally gives on-line on line casino merchandise, together with baccarat, blackjack, slot machines, and roulette.
CFRA Analysis upgraded the corporate from Maintain to Purchase, citing its robust place within the US cell sports activities betting market. The agency anticipates DKNG to develop 30% in 2025 and maintain over 80% market management, turning into extra worthwhile by means of cost-cutting. It set a worth goal of $52 for the corporate, given its engaging valuation and defensive profile.
Analyst Zachary Warring talked about:
DKNG shares have fallen over 30% because it launched its This fall earnings, which we imagine gives an ideal entry level for shares.
DraftKings got here in second on the Jefferies’ rating of sports activities betting and iGaming manufacturers. Based on Jefferies analyst David Katz, the agency’s market share and efficiency are strongly correlated. Jefferies has a Purchase score on the inventory.
The corporate additionally earned an improve from BMO Capital Markets with an Outperform score forward of its Q1 earnings report. The agency named it a Prime Decide, citing engaging valuation regardless of potential short-term earnings weak point. Analyst Brian Pitz thinks that DraftKings is well-positioned for long-term progress. Adjusted EBITDA progress charges are predicted to be 40% and 30% for the following 3 years and 5 years, respectively.
Whereas we acknowledge the potential of DKNG as an funding, our conviction lies within the perception that some AI shares maintain higher promise for delivering increased returns, and doing so inside a shorter time-frame. There may be an AI inventory that went up for the reason that starting of 2025, whereas common AI shares misplaced round 25%. If you’re searching for an AI inventory that’s extra promising than DKNG however that trades at lower than 5 occasions its earnings, take a look at our report about this cheapest AI stock.
Disclosure: None. Insider Monkey focuses on uncovering one of the best funding concepts of hedge funds and insiders. Please subscribe to our free day by day e-newsletter to get the most recent funding concepts from hedge funds’ investor letters by getting into your e-mail handle beneath.
