In this article, we will take a look at the 10 best holding company stocks to buy now.
“The Market is Anticipating Too Much”
Some may think the Fed meeting on the 18th of September may have put an end to the basis point cut debate, however, while the Fed did initiate a rate cut by half a percentage, two Fed meetings are remaining before the end of 2024. To discuss the likely rate cut path, Chris Versace, Tematica Research CIO, appeared in an interview on Yahoo Finance on September 24.
Versace suggests that it is quite impossible to predict the path the Fed is to adopt before 2024 ends and the decision will likely be more reliant on data. The labor market weakened for the second consecutive month and, according to him, the Fed will probably go for another 50 basis point cut, if not more.
He urges investors and traders to triangulate all data points to make decisions including economic data, inflation data, and the speed at which the economy is growing. Versace states that the market right now is stretched and that there is more to the bigger picture such as the upcoming elections, earnings growth, and the Fed’s decisions.
“Volatility Should Remain Elevated”
On September 25, Burns McKinney, NFJ Investment Group Managing Director & Senior Portfolio Manager, appeared in an interview on Yahoo Finance to discuss the market outlook. Amid declining consumer confidence and a shrinking job market, volatility, according to him, will remain a constant element.
He suggested that signs of job weakness coupled with inflation have impacted consumer confidence negatively, especially after the Fed’s decision. McKinney added that there is a disequilibrium in the number of jobs vacant and the number of workers available right now, leading to weakened employment data.
From an investor standpoint, he deems volatility a constant state of the market, given that the country also has an upcoming election in the coming weeks. In addition to that, geopolitical tensions in Europe and the Middle East will likely add to the turmoil. McKinney shares that investors should focus more on dividend-paying stocks to remain secure and resilient through the volatility.
Despite the turmoil, some stocks may always be promising given their strong footing and dominance in the industry. With that, let’s take a look at the 10 best holding company stocks to buy now.
A portfolio manager in front of their computer screen, evaluating a variety of mid-cap stocks.
Our Methodology
To come up with the 10 best holding company stocks to buy now, we examined multiple rankings on the internet and our rankings. We then ranked the top 10 based on the largest number of hedge fund holders at the end of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Holding Company Stocks To Buy Now
10. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 62
Morgan Stanley (NYSE:MS) ranks 10th on our list of the best holding stocks to buy now. The investment banking company has stakes in several subsidiaries including Eaton Vance, Graystone Consulting, and Morgan Stanley Wealth Management, to name a few.
The company provides a range of services including wealth management, investment banking, research, and investment management to individuals, businesses, and the government in 24 countries through its 55 offices.
In the second quarter of 2024, Morgan Stanley (NYSE:MS) logged $15 billion in revenue, up from $13.5 billion a year ago in Q2 2023. During the same quarter, the firm added another $36 billion in net assets, bringing the six-month total to $131 billion.
The company is not only one of the world’s largest banking holding companies but is also committed to giving back to the community. Since 2006, Morgan Stanley employees have volunteered 3.1 million hours during the Global Volunteer Month. In addition to that, the Morgan Stanley Alliance for Children’s Mental Health reached 37 million people.
The company’s footprint is large. During the second quarter, client assets reached $7.2 trillion, currently on track to cross $10 trillion. In addition to that, the company also accumulated $1.5 billion of common equity tier 1 capital, making it one of the best holding companies to buy now.
9. The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders: 68
The Goldman Sachs Group, Inc. (NYSE:GS) is one of the largest investment banking companies that specializes in banking, asset management, and wealth management. The holding company owns several subsidiaries including Folio Financial, GreenSky LLC, The Ayco Company L P, and NN Investment Partners.
In the second quarter of 2024, the company logged $12.73 billion in revenue and $3.04 billion in earnings. Its global banking and markets segment generated $8.18 billion in revenue, backed by higher returns from equities. During the same quarter, the company’s assets under supervision reached $2.93 trillion, of which $86 billion worth of assets came from Q2 2024.
The Goldman Sachs Group, Inc. (NYSE:GS) is notorious for its acquisitions and mergers, explaining why the company was ranked first in Worldwide Announced and Completed Mergers and Acquisitions. So far in 2024, the company closed the acquisition of Xpress Wellness LLC, a healthcare services provider to rural communities. In addition to that, last month, Goldman Sachs also made a minority investment in SePRO, a water solutions company.
Overall, The Goldman Sachs Group, Inc. (NYSE:GS) is one of the best holding stocks to buy now and we say that because of its large clientele and solid expansion strategy. Analysts 12-month median price target of $528.5 points to a 6% upside from current levels. Overall, GS was held by 68 hedge funds at the close of Q2 2024 and Fisher Asset Management was the largest shareholder with a position worth $2.66 billion.
Ariel Investments’ Ariel Appreciation Fund stated the following regarding The Goldman Sachs Group, Inc. (NYSE:GS) in its Q2 2024 investor letter:
“Shares of global investment bank, The Goldman Sachs Group, Inc. (NYSE:GS), also rose in the period following solid earnings results, highlighted by strength in fixed income, currencies 1 Sindreu, Jon. “The Second Quarter Split the Market.” The Wall Street Journal, July 1, 2024, p. B9. and commodities (FICC) as well as equities trading and better-than-expected investment banking fees. Meanwhile, GS continues to successfully execute on its strategic initiatives to improve the overall return of the company. It is right sizing headcount and narrowing its ambitions in consumer strategy through divestitures and working to improve profitability in Platform Solutions by 2025. With the possibility of increased capital requirements from its regulators, GS plans to reign in buybacks over the short-term but maintain its dividend. Looking ahead, we continue to view the near and long-term outlook for Goldman as attractive, given favorable business trends, continued positive momentum on strategic initiatives and active expense/capital management programs.”
8. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 72
The Charles Schwab Corporation (NYSE:SCHW) ranks eighth on our list of the best holding stocks to buy now. The financial services company owns several subsidiaries that offer banking, commercial banking, and investment-related services. These include ThomasPartners, Inc., OptionsXpress, and Family Wealth Alliance, LLC.
The Charles Schwab Corporation (NYSE:SCHW) manages $9.74 trillion in client assets making it one of the largest banking services providers in the United States. The company also manages 1.9 million banking accounts and 35.9 million brokerage accounts, adding another million during Q2 2024. It also facilitates 5.72 million daily average trades and has $25 billion in assets under management, growing at a compound annual growth rate (CAGR) of 23% since July 2020.
Overall, 2024 is a transition year for the firm, as it anticipates Ameritrade’s acquisition to close and expects positive cash flows for clients by the end of the year. In the third quarter of 2024, The Charles Schwab Corporation (NYSE:SCHW) expects revenue to increase by 2% to 3% relative to the previous quarter and report a pre-tax profit margin of at least 40%.
The company’s growth trajectory is obvious and it expects to deliver strong results before the end of 2024. Such explains why analysts are bullish on the stock. Their 12-month median price target of $71 points to a 10% upside from current levels. Overall, SCHW was held by 72 hedge funds at the close of Q2 2024 and Harris Associates was the largest shareholder with a position worth $1.69 billion.
7. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 80
Johnson & Johnson (NYSE:JNJ) is a leading pharmaceutical company that ranks seventh on our list of the best holding company stocks to buy now. Johnson & Johnson’s (NYSE:JNJ) also has stakes in several subsidiaries including Janssen Pharmaceuticals, Ethicon Inc., Abiomed, and Johnson & Johnson Vision, to name a few.
In the second quarter of 2024, the company reported sales of $22.4 billion, up 4.3%. Johnson & Johnson (NYSE:JNJ) not only saw success with regulatory approvals for some medications but expanded its footprint in biotechnology. Previously in April, Johnson & Johnson (NYSE:JNJ) acquired Shockwave Medical, a cardiovascular medical device company, enhancing the company’s position in cardiovascular intervention and medical technology.
Johnson & Johnson (NYSE:JNJ) is one of the best holding stocks because of its growth trajectory across all its departments over the years and its inclination towards expanding into new segments. In addition to that, its segments are expected to grow at a compound annual growth rate of 5% to 7%, explaining why analysts are bullish on the company.
Analysts 12-month median price target of $170 points to a 4% upside from current levels. Overall, JNJ was held by 80 hedge funds at the close of Q2 2024 and Fisher Asset Management was the largest shareholder with a position worth $1.02 billion.
6. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 83
Wells Fargo & Company (NYSE:WFC) is one of the best holding company stocks to buy now. The financial services company was founded in 1852 and is based in California, United States. Wells Fargo provides a range of services including asset management, banking, commodities, insurance, investment management, and mortgage loans through its subsidiaries including Wells Fargo Advisors, First Clearing, and Wells Fargo Advisors to name a few.
In the second quarter of 2024, Wells Fargo & Company (NYSE:WFC) logged $20.69 billion in revenue, up by 1% year-over-year. The company has almost $1.9 trillion in assets, making it one of the biggest financial services companies in the United States and globally. The company provides services to one in three households and almost 10% of small businesses in the United States.
With a strong clientele of 68 million customers in 22 countries, Wells Fargo & Company (NYSE:WFC) has a strong ecosystem difficult for any other company to replicate. In addition to that, the company has over 5,600 branches and more than 11,000 ATMs.
Analysts are also bullish on WFC and their 12-month median price target of $63 points to a 16% upside from current levels. At the end of Q2 2024, there were 83 hedge funds that held positions in the stock with total stakes amounting to $5.68 billion. As of June 30, Harris Associates was the largest shareholder with a position worth $1.27 billion.
5. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 85
Citigroup Inc. (NYSE:C) is one of the best holding company stocks to buy now. The investment banking giant is based in New York and engages in the provision of asset management services, risk management services, investment management services, mortgage loans, credit cards, and other banking commodities. Some of its subsidiaries include Citibank, Banamex, and Citicorp LLC, to name a few.
Citigroup Inc. (NYSE:C) has an on-ground presence in 90 countries, issues currencies in 144 countries, and has trading floors in 77 countries. Despite having such an extravagant network, the company is strongly inclined to expand. Not only did Citigroup Inc. (NYSE:C) launch commercial banking services in Japan, but it also collaborated with Emirates NBD, allowing corporate and retail clients in the Middle East, North Africa, and Turkiye to make USD payments anytime they want.
In the second quarter of 2024, the company logged $20.1 billion in revenue and $3.2 billion in net income, up from $19.4 billion in revenue and $2.9 billion in net income from Q2 2023. Of this, its investment banking segment showed promising results and increased revenue by 38%.
Overall, Citigroup Inc. (NYSE:C) is one of the most important names in the banking sector because of its expansive network and strong ecosystem. The company continues to enhance its position by initiating strategic partnerships with entities from across the globe.
Analysts are also bullish on C and their 12-month median price target of $71 points to a 16% upside from current levels. In Q2 2024, there were 85 hedge funds that held positions in the stock with total stakes amounting to $10.64 billion. As of June 30, Berkshire Hathaway was the largest shareholder with a position worth $3.51 billion.
Patient Capital Management stated the following regarding Citigroup Inc. (NYSE:C) in its first quarter 2024 investor letter:
“Citigroup Inc. (NYSE:C) gained 24.1% in the quarter continuing its uptrend from 4Q. The company is on a multi-year journey to reorganize the business and reach return on tangible common equity of 11-12% by 2026 (and higher further out). Citigroup is finally taking the hard actions necessary, cutting unprofitable departments, taking out middle management layers, and reducing overall headcount. As of early March, the company was 70% done with its business exits and had reduced management layers by 1/4th. We have high confidence Citi will hit its targets. In the meantime, the company is returning cash to shareholders, which could meaningfully increase if the Basel III capital proposal is changed.”
4. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 92
Bank of America Corporation (NYSE:BAC) is a financial services company that ranks fourth on our list of the best holding company stocks to buy now. The company provides investment and wealth management services to individuals, institutions, small to medium-sized businesses, large corporations, and the government through its subsidiaries such as Merrill, BofA Securities, and Bank of America Private Bank.
In the second quarter of 2024, Bank of America Corporation (NYSE:BAC) added another 278,000 net new checking accounts, bringing its fiscal half-year 2024 total to 500,000. As for the wealth management segment, the company maintained 6,100 new relationships and added thousands of small businesses in its commercial business sector. Bank of America now manages $5.7 trillion in client balances, loans, deposits, and investments in its consumer and wealth management segments.
The company is also among the top credit card issuers in the United States and ownsone of the most solid retail networks. Bank of America Corporation (NYSE:BAC) is a dominant player and we say that because of its 69-million-individual customer base, 3,800 retail locations, and 15,000 ATMs across the United States.
Analysts are also bullish on BAC and their 12-month median price target of $45.5 points to a 15% upside from current levels. In Q2 2024, there were 92 hedge funds that held positions in the stock with total stakes amounting to $48.1 billion. As of June 30, Berkshire Hathaway was the largest shareholder with a position worth $41.1 billion.
ClearBridge Investments’ ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:
“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 111
JPMorgan Chase & Co. (NYSE:JPM) is one of the best holding company stocks to buy now. The multinational finance entity serves millions of customers in over 100 countries and territories. It specializes in investment banking solutions, risk management services, and capital-raising services to companies, institutions, and the government. Some of its subsidiaries include Chase Bank, Global Shares, Nutmeg, WePay, and Chase Paymentech, to name a few.
Financial results aside, the company is also making strides in automating its operations. Earlier in August, JPMorgan Chase & Co. (NYSE:JPM) launched a generative AI assistant that helped its employees complete tedious tasks. As for customers, the company introduced several features for customers to ease payment mechanisms and facilitate data management.
As of March 31, JPMorgan Chase & Co. (NYSE:JPM) has $4.1 trillion in assets and $3.6 trillion in assets in management, making it one of the largest banks in the United States. JPMorgan Chase & Co.’s (NYSE:JPM) strong customer base is a testament to its financial performance. The stock was held by 111 hedge funds in the second quarter of 2024. Fisher Asset Management is the top shareholder of the company with a position worth $2.58 billion.
Carillon Tower Advisers’s Carillon Eagle Growth & Income Fund stated the following regarding JPMorgan Chase & Co. (NYSE:JPM) in its first quarter 2024 investor letter:
“JPMorgan Chase & Co. (NYSE:JPM) contributed positively to performance following solid financial results and positive guidance for the remainder of 2024. Moreover, growing chatter around rising capital markets activity likely contributed to the stock’s strong performance relative to other banks. Recall that JPMorgan has a robust capital markets franchise.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is a multinational company with businesses in multiple industries including financial services, insurance, energy, transportation, rail, and utility. The company not only provides services across several insurance lines, but also engages in the generation and distribution of electricity from natural gas, coal, wind, solar, and nuclear sources. Berkshire Hathaway retails household appliances, electronics, kitchenware, and motorcycle equipment. Some of its subsidiaries include GEICO, Dairy Queen, HomeServices of America, and Berkshire Hathaway Energy.
In the second quarter of 2024, Berkshire Hathaway Inc. (NYSE:BRK-B) logged $93 billion in revenue, of which $26 billion came from insurance. In the first half of 2024, the company’s investment income increased by 36% year-over-year. GEICO, Berkshire’s auto-insurance subsidiary now provides coverage for 28 million vehicles, up from 17 million in 2019.
Berkshire Hathaway Inc. (NYSE:BRK-B) holds a strong position in the world, especially in the United States. It has ownership rights and control over multiple major companies across the globe, contributing to its position on our list. According to the company’s latest shareholder letter, it currently owns 6% of the entire universe in which it operates.
Berkshire Hathaway Inc.’s (NYSE:BRK-B) competitive edge lies in its presence in multiple industries diversifying its risk and making it one of the best holding company stocks to buy now. According to our database, 120 hedge funds held stakes in Berkshire Hathaway Inc. (NYSE:BRK-B) in the second quarter, with positions worth $12.54 billion. With stakes amounting to $10.02 billion, Bill & Melinda Gates Foundation Trust is the largest shareholder of the company, as of June 30.
1. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 216
Alphabet Inc. (NASDAQ:GOOGL) is one of the best holding company stocks to buy now. The company owns several subsidiaries including Waymo, Verily, BufferBox, and Google.
The company is relentlessly working to improve the Gemini experience and is also actively involved in developing AI hardware, launching its NVIDIA chip rival in May. In addition to that, the company saw significant growth in its computer hardware segment. While Google’s tensor processing units (TPU) only account for almost 20% of the market, its advancements promise higher market shares. Moreover, its six-generation chips are 67% more energy efficient compared to the previous generation of processors. The new chip will be made available to Google Cloud users by the end of 2024.
Overall, the company’s new AI models and algorithms are 100 times more efficient compared to 18 months ago. Alphabet Inc. (NASDAQ:GOOGL) logged revenue worth $85 billion in the fiscal second quarter of 2024, driven by the growing momentum in cloud and search. Additionally, over 60% of generative AI startups and 90% of generative AI unicorns are customers of the Google Cloud.
One can infer that the technology holding company is well-positioned to exploit the next wave of artificial intelligence and innovation, making it a solid investment. Analysts 12-month median price target of $205 points to a 26% upside from current levels. Overall, GOOGL was held by 216 hedge funds at the close of Q2 2024 and Fisher Asset Management was the largest shareholder with a position worth $8.86 billion.
Patient Capital Management mentioned Alphabet Inc. (NASDAQ:GOOG) in its Q2 2024 investor letter:
“Alphabet Inc. (GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”
Analysts are bullish on GOOGL and their 12-month median price target of $205 points to a 26% upside from current levels. Overall, 216 investors held stakes worth $35.31 billion in Alphabet Inc. (NASDAQ:GOOGL). Of those, Fisher Asset Management was the highest stakeholder with a position of $8.86 billion.
Overall, GOOGL ranks first among the 10 best holding company stocks to buy now. At Insider Monkey, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
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