In this piece, we’ll take a look at 5 Best Bank Stocks to Buy According to Matthew Lindenbaum’s Basswood Capital. For more stocks, head on to 10 Best Bank Stocks to Buy According to Matthew Lindenbaum’s Basswood Capital.
5. Comerica Incorporated (NYSE:CMA)
Basswood Capital Stake: $50,380,000
Percentage of Basswood Capital‘s Portfolio: 3.16%
Number of Hedge Fund Holders: 38
Comerica Incorporated (NYSE:CMA) is a financial services firm with a special focus on commercial banking. Basswood Capital decreased its stake in Comerica Incorporated (NYSE:CMA) by 5% during Q2 2022 and held 686,558 shares of the company as per the last filing of the fund.
On September 30, 2022, David Chiaverini, an analyst at Wedbush, initiated coverage of Comerica Incorporated (NYSE:CMA) with a price target of $95 and an Outperform rating. The analyst believes that a large amount of the bank’s deposits are non-interest-bearing, which will bode well in terms of boosting the profitability of the bank.
Marshall Wace LLP remained the most bullish hedge fund on Comerica Incorporated (NYSE:CMA) as it increased its stake by 339% during the second quarter of 2022. The fund holds 2,109,435 shares of Comerica Incorporated (NYSE:CMA) with an investment value of over $154 million.
4. U.S. Bancorp (NYSE:USB)
Basswood Capital Stake: $53,018,000
Percentage of Basswood Capital‘s Portfolio: 3.33%
Number of Hedge Fund Holders: 43
U.S. Bancorp (NYSE:USB) is a financial services corporation providing services including commercial banking, retail banking, mortgages, etc., mainly in the Western and Midwestern United States. Matthew Lindenbaum didn’t make any changes to his stake in U.S. Bancorp (NYSE:USB) during Q2 2022. The fund held 1,152,063 shares of the company at the end of the second quarter ending June 2022.
On October 14, Vivek Juneja, an analyst at JPMorgan, reduced his price target on U.S. Bancorp (NYSE:USB) to $46. The analyst currently has an Overweight rating on the company but has reduced his price target on the stock as he believes that the rising interest rates pose the risk of a recession and a slowdown in loan growth for the bank.
Here is what ClearBridge Investments Dividend Strategy has to say about U.S. Bancorp (NYSE:USB) in its Q4 2021 investor letter:
Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.
According to Insider’s Monkey database, 43 hedge funds owned stakes in U.S. Bancorp (NYSE:USB) at the end of Q2 2022, while Berkshire Hathaway remained the hedge fund with the largest holding in the stock. The fund owned 119,805,135 shares of the company at the end of Q2 2022.
3. JPMorgan Chase & Co. (NYSE:JPM)
Basswood Capital Stake: $55,292,000
Percentage of Basswood Capital’s Portfolio: 3.47%
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) is one of the biggest financial corporations in the United States. The company primarily focuses on corporate banking, investment banking, commercial banking, and community banking. Basswood Capital didn’t make any changes to its stake in JPMorgan Chase & Co. (NYSE:JPM) during Q2 2022 and held on to its stake of 491,000 shares of the firm.
On Friday, September 30, 2022, JPM’s execs, in an interview, stated that the company plans on hiring 2,000 engineers through the end of 2022. The continuation of hiring by the bank reflects its strength during a period of slowing economic growth.
Here is what Carillon Tower Advisers had to say about JPMorgan Chase & Co. (NYSE:JPM) in their Q1 2022 investor letter:
More cyclical sectors, including technology and consumer discretionary, were among the weakest, likely due to rising interest rates and inflation. It was encouraging to see the quarter finish on a strong note with the S&P 500 only about 5% away from its all-time highs. Shares of JPMorgan Chase (NYSE:JPM) detracted from performance due to the company’s increased expense guidance, announced in January.
Fisher Asset Management remained the hedge fund with the largest holding of JPMorgan Chase & Co. (NYSE:JPM) stock at the end of Q2 2022, amounting to a value of over $899 million. As per Insider’s Monkey database, 104 hedge funds were long on JPMorgan Chase & Co. (NYSE:JPM) at the end of the June quarter.
2. Webster Financial Corporation (NYSE:WBS)
Basswood Capital Stake: $64,949,000
Percentage of Basswood Capital’s Portfolio: 4.08%
Number of Hedge Fund Holders: 32
Webster Financial Corporation (NYSE:WBS) is a diversified financial service provider operating in the United States. The company offers mortgages and consumer and commercial banking services to its clients. Matthew Lindenbaum added to his investment in Webster Financial Corporation (NYSE:WBS) by 21% during Q2 2022. The fund now holds 1,540,896 shares of the company as per its last filing.
The shares of Webster Financial Corporation (NYSE:WBS) have not performed well in 2022 and are down 14.91% YTD as of October 20, 2022. The bank had a good Q3 2022, as it reported a revenue of $664.6 million for the quarter, beating market estimates by $23.98 million. The normalized EPS was also ahead of estimates by $0.04, as the bank posted an EPS of $1.46 for the quarter.
Here is what Diamond Hill Small Cap Fund has to say about Webster Financial Corporation (NYSE:WBS) in its Q1 2022 investor letter:
Webster Financial Corporation (NYSE:WBS) is also a new name in the portfolio, having completed its merger of our prior holding Sterling Bank. The combination means that Webster’s large health care savings (HSA) account platform, which is a good source of low-cost deposits, will be paired with Sterling’s organic loan generation engine.
At the end of the second quarter of 2022, 32 hedge funds in Insider’s Monkey database held stakes in Webster Financial Corporation (NYSE:WBS). Diamond Hill Capital had the biggest stake in Webster Financial Corporation (NYSE:WBS), amounting to approximately $135 million.
1. Dime Community Bancshares, Inc. (NASDAQ:DCOM)
Basswood Capital Stake: $88,790,000
Percentage of Basswood Capital‘s Portfolio: 5.58%
Number of Hedge Fund Holders: 9
Dime Community Bancshares, Inc. (NASDAQ:DCOM) is an investment holding company. The company’s deposits are gathered from the internet and invested in several sectors including real estate and debt securities. Basswood Capital decreased its stake in Dime Community Bancshares, Inc. (NASDAQ:DCOM) by 12% during the second quarter. The fund’s holding in Dime Community Bancshares, Inc. (NASDAQ:DCOM) amounts to a value of over $88 million as per its Q2 2022 filing.
On September 21, 2022, Dime Community Bancshares, Inc. (NASDAQ:DCOM) announced a quarterly dividend of $0.24/share. The company has a strong history of paying dividends and currently has a good dividend yield of 3.07%. The bank’s stock is currently down 12.12% YTD as of October 20, 2022. Dime Community Bancshares, Inc. (NASDAQ:DCOM) is set to announce Q3 2022 earnings on October 28, 2022.
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