10 Best Financial Stocks To Buy According to Hedge Funds

5. Bank Of America Corporation (NYSE:BAC) 

Number of Hedge Fund Holders: 98        

One of the Best Financial Stocks, Bank Of America Corporation (NYSE:BAC), has over $3.0 trillion in assets, making it one of the biggest financial institutions in the US. It is divided into four primary categories: consumer banking, global wealth and investment management, global banking, and global markets. The consumer-facing business segments of the company comprise its branch network and deposit-gathering operations, retail lending products, credit and debit cards, and services for small businesses. Both the firm’s private bank and Merrill Lynch operations offer wealth management and brokerage services. Investment banking, corporate and commercial real estate loans, and capital markets operations are all wholesale lines of business. Although Bank Of America Corporation (NYSE:BAC) operates in several countries, its primary focus is the United States.

Bank Of America Corporation (NYSE:BAC) has become one of the leading US banking franchises after years of problems during the 2008 financial crisis. The bank is a Tier 1 investment bank, a top four US credit card issuer, a top three US acquirer, has a strong commercial banking franchise, and owns the Merrill Lynch franchise, which has grown to become one of the top US brokerage and advisory firms. It also boasts one of the best retail branch networks and overall retail franchises in the US.

Bank of America (NYSE: BAC) makes a strong bull case with its diverse businesses and outstanding Q3 of 2024 earnings, which reported $25.49 billion in revenue, slightly above expectations. The bank benefited from Wall Street’s activity, with fixed-income trading revenue jumping by 8% YoY to $2.9 billion and equities trading up 18% YoY to $2 billion, both exceeding expectations. Investment banking fees increased by 18% to $1.4 billion, showing strength in advisory operations.

Evercore ISI maintained its Outperform rating on Bank Of America Corporation (NYSE:BAC) shares and increased its price objective from $45 to $53. The analyst notes that after a “pretty strong” September and October, investment banking activity levels continued to decline into December, and that equity markets sold off by roughly 2% in December in “a post-post-election breather driven largely by the realization” that rate cuts might not be as imminent as thought. In a Q4 forecast for the big banks’ group, the analyst stated that although December cooled, the firm anticipates a robust start to 2025 because Evercore generally views recovery in investment banking as a “when, not if” story.

Warren Buffett’s Berkshire Hathaway was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 797.68 million shares worth $31.65 billion as of Q3.