In this article, we will take a look at the 14 best holding company stocks to buy right now.
The Treasury Yield Market
The treasury yield has been moving towards its lowest point in a month following a comment from the Treasury Secretary, Scott Besson. The secretary suggested that the new administration is focused on the 10-year treasury and its yield, rather than the Fed cutting interest rates. On February 6, Ed Mills, Managing Director at Raymond James, appeared in an interview on Yahoo Finance to discuss his outlook on the market amid new economic, political, and tax policies.
Mills reiterated a very important factor raised in the Secretary’s speech the day before, suggesting that the Trump tax cuts from 2017 were to be made permanent, adding $4 trillion to debt and deficit over the coming 10 years. He added that the policies also desire to cut tips and social security taxes, now bringing the total debt and deficit to $5 trillion. Mills suggested that the debt and deficit were so huge that it would be extremely challenging for the government to keep the “long end of the curve down.”
Why Value Investing is the Way to Go
In another interview on March 5 on Yahoo Finance, Michael Sonnenfeldt, founder and chairman at TIGER 21, shared his market thesis amid changing macroeconomic and political trends. He shared that while turmoil and confusion are encapsulating the market, his clients remain very strong, emphasizing his inclination towards value investing. He also added that his members are finding significant value in private equity and the private real estate industry.
He suggested that while a lot of indicators in the market point towards a possible rotation from growth into value, he remains cautious about the changing conditions, reiterating that it is currently very challenging to find value in the market environment. Sonnenfeldt added that focusing on the fundamentals of equities is of crucial importance at the moment, rather than company momentum, amid volatile economic and political conditions. He shed light on his member’s buying strategy, which happens to be entirely focused on the basics of a stock, emphasizing that others should follow suit.
While some stocks pose a risk due to the current market conditions, some stocks, especially those with strong fundamentals and long-standing businesses, offer greater protection and certainty. That said, let’s take a look at the 14 best holding company stocks to buy right now.
A senior executive looking up at a large boardroom filled with the stocks their company manages.
Our Methodology
To come up with the 14 best holding company stocks to buy right now, we went over similar rankings on the internet and compiled an initial list of 20 stocks. We then examined the hedge fund sentiment around every stock and picked the most popular ones. Our list is in ascending order of the number of hedge funds, as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
14 Best Holding Company Stocks To Buy Right Now
14. HSBC Holdings plc (NYSE:HSBC)
Number of Hedge Fund Holders: 21
HSBC Holdings plc (NYSE:HSBC) is a financial services company that ranks 14th on our list of the best holding company stocks to buy right now. The company services millions of customers across the globe through its four businesses. Some of its services include personal banking, business banking, corporate and institutional banking, and private banking. The financial organization serves nearly 41 million customers across 60 markets across the globe supported by 220,000 full-time employees globally. As of September 30, 2024, HSBC Holdings plc (NYSE:HSBC) had almost $3.1 billion in assets. In an impressive feat, the company received 33 prizes in the Euromoney Awards for Excellence 2024.
On February 5, Nick Lord, an analyst at Morgan Stanley, maintained a buy rating on HSBC Holdings plc (NYSE:HSBC) with a price target of HK$84.60. The analyst gave a buy rating based on the company’s recent financial statements and upward revisions to its revenue estimates. In addition to that, the forecast for fees and other income for the fiscal years 2025 and 2026 has been revised, explaining investors’ shared optimism in the stock. On the flip side, estimates for costs have been revised downwards, pointing to operational efficiencies and increased profitability. Lord also eyes strong shareholder returns in the future years, emphasizing his buy rating on the stock.
13. American International Group, Inc. (NYSE:AIG)
Number of Hedge Fund Holders: 48
American International Group, Inc. (NYSE:AIG) is a finance and insurance group prominent in the commercial and personal insurance lines segment. The company serves customers in 190 countries and jurisdictions through its wide range of operations and network partners. Some of its subsidiaries include American General Life Insurance Co., AIG Property Casualty Inc., AIG American General, and American Life Insurance Company, to name a few.
In the fourth quarter of 2024, the company generated $6.1 billion in net premiums written for its general insurance segment, up by 6% year-over-year. In addition to that, for the three months ended 2024, American International Group, Inc. (NYSE:AIG) generated $898 million in net income attributable to shareholders and $1.31 billion in net investment income. Similarly, for the 12 months ended December 31, 2024, AIG logged $4.25 billion in net investment income.
On February 14, analyst firm, Keefe Bruyette raised AIG’s price target from $87 to $90, keeping an outperform rating on the stock. The analyst is bullish on American International Group, Inc. (NYSE:AIG) because of its sustained underwriting margin progress that is expected to generate solid results for the company over the next 12 months.