In this article, we discuss the 5 best bank stocks to buy now. If you wish to see our detailed analysis of these stocks, go directly to the 15 Best Bank Stocks To Buy Now.
5. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 72
The Charles Schwab Corporation (NYSE:SCHW) is a multinational financial services company that offers commercial banking, asset management and wealth management services. Ranked fifth on our list of the 15 best bank stocks to buy now, The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $146.07 billion.
For the second quarter of 2021, the company reported an EPS of $0.7, falling short of the estimates by $0.02. The revenue for the quarter, however, came in at $4.53 billion, an increase of 84.78% on a year-over-year basis, beating estimates by $67.24 million.
By the end of the second quarter of 2021, 72 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Charles Schwab Corporation (NYSE:SCHW) worth roughly $4.85 billion. This is compared to 76 hedge funds in the previous quarter with a total stake value of approximately $4.9 billion.
On October 5, Atlantic Equities analyst John Heagerty initiated coverage of The Charles Schwab Corporation (NYSE:SCHW) with an Overweight rating alongside a $95 price target.
Lakehouse Capital, an investment management firm, releases its Q2 2021 investor letter and mentioned The Charles Schwab Corporation (NYSE: SCHW) in it. Here is what the firm has to say:
“Charles Schwab is not a household name in Australia but it is in the US where it is the largest discount broker with more than 32 million brokerage accounts, 2 million corporate retirement plans, and total client assets of US$7.4 trillion. Schwab’s shares performed extremely well during the year thanks to a confluence of factors including a strong stock market with the S&P 500 up 39% year-on-year, the company’s recent merger with industry heavyweight TD Ameritrade, and expectations that interest rate income would grow as the US economy gained steam.
Two other important contributors to Schwab’s year, which were a mix of cyclical and structural, were an increase in net new accounts and increased trading activity. We view these as cyclical in the sense that markets are performing very well and that retail investors have been bored and emboldened during the American lockdowns, however, also structural because Schwab’s shift to $0 commissions on equity trades has permanently reduced a barrier to trading for investors with smaller accounts. We also note that, while brokerage activity is cyclical, the average brokerage account itself is very sticky — we estimate normalised annual retention rates for accounts of better than 93% — and that the average client assets per account grow over time thanks to asset growth and clients collectively being net savers.
Schwab makes for an excellent natural hedge for the Fund as Schwab tends to perform well when interest rates increase, which is generally negative for the rest of the portfolio. And the position did its job for us by increasing during a rising interest rate environment, enabling us to harvest much of our gains from Schwab and redeploy them to shares of other growth companies that had gotten cheaper in response to higher rates. We’re mindful of the run in the shares and the cyclical nature of the business but comfortable keeping a small position for now given Schwab’s natural hedging dynamics, extremely loyal customers, and an industry-leading position in a growing market.”
4. Citigroup, Inc. (NYSE:C)
Number of Hedge Fund Holders: 87
Citigroup, Inc. (NYSE:C) is an multinational investment banking and financial services corporation. Operating in the diversified banks industry, the New York-based company ranks fourth on our list of the 15 best bank stocks to buy now.
In the second quarter of 2021, Citigroup Inc. (NYSE: C) had earnings per share of $2.84, beating estimates by $0.95. The company’s revenue for the quarter amounted to $17.47 billion, surpassing market estimates by $273.99 million.
By the end of the second quarter of 2021, 87 hedge funds out of the 873 tracked by Insider Monkey held stakes in Citigroup, Inc. (NYSE:C) worth roughly $6.1 billion. This is compared to 90 hedge funds in the previous quarter with a total stake value of approximately $6.9 billion.
This July, Keefe Bruyette analyst David Konrad assumed coverage of Citigroup, Inc. (NYSE:C) with an Outperform rating and $85 price target.
3. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 87
Bank of America Corporation (NYSE:BAC) is a multinational bank and financial services holding company based in North Carolina. Ranked third on our list of the 15 best bank stocks to buy now, Bank of America Corporation (NYSE:BAC) has a market capitalization of $371.14 billion.
On October 11, Jefferies analyst Ken Usdin raised his price target on Bank of America Corporation (NYSE:BAC) to $48 from $41, and kept a Hold rating on the shares.
In the second quarter of 2021, Bank of America Corporation (NYSE: BAC) reported an EPS of $1.03, beating estimates by $0.27. The company’s revenue in the second quarter came in at $21.5 billion. Shares for the company surged by 7.01% this week, likely due to the FED meeting, with interest rate expectations rising.
At the end of the second quarter of 2021, 87 hedge funds in the database of Insider Monkey held stakes worth $46 billion in Bank of America Corporation (NYSE: BAC), down from 97 in the previous quarter worth $45 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation (NYSE:BAC) was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 94
Wells Fargo & Company (NYSE:WFC) is a financial services company that provides a range of products and services, including banking, insurance, mortgage and leasing services, among numerous others. Ranked second on our list of the 15 best banks stocks to buy now, the California-based company has a market capitalization of $195.26 billion.
At the end of the second quarter of 2021, 94 hedge funds in the database of Insider Monkey held stakes worth $7.08 billion in Wells Fargo & Company (NYSE:WFC). This is compared to 96 hedge funds in the preceding quarter with stakes worth roughly $7.4 billion.
On September 1, Deutsche Bank analyst Matt O’Connor raised the price target of Wells Fargo & Company (NYSE:WFC) to $55 from $48 and kept a Buy rating on the shares of the company.
On July 14, Wells Fargo & Company (NYSE:WFC) issued its quarterly earnings report for the second quarter of 2021, with earnings per share declared at $1.37, crossing estimates by $0.44. Additionally, the revenue for the quarter came in at $20.27 billion, surpassing market predictions by $2.54 billion.
L1 Capital, in its second-quarter 2021 investor letter, mentioned Wells Fargo & Company (NYSE:WFC). Here is what the fund said:
“Wells Fargo (Long +16%) was the strongest contributor to portfolio performance over the quarter. Wells Fargo shares rallied given a better outlook for bad debts driven by improving employment and house price trends. The company had been very undervalued due to excessive fears around likely bad debts due to the pandemic, the continued regulatory “asset cap” (a punishment that was put in place in 2017 for numerous compliance failures) and an inability to commence buybacks. The share price has subsequently recovered strongly in recent months as the company has progressed its turnaround program under the leadership of the well-regarded CEO, Charles Scharf (former CEO of Visa and BNY Mellon). Wells Fargo is now closer to getting the asset cap lifted and has announced a huge cost out program (US$8b+) as well as an $18b buyback program to be completed over the next 12 months. Wells Fargo shares have rallied more than 50% since we initiated the position in late 2020. Given the strong rally, we elected to exit our position and rotate into stocks with larger valuation upside.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 108
Incorporated in Delaware, and based in New York, JPMorgan Chase & Co. (NYSE:JPM) is a multinational financial services and investment banking firm that offers financial advisory services and solutions across the globe. The company ranks first on our list of the 15 best bank stocks to buy now.
On October 11, Jeffries analyst Ken Usdin raised his price target on JPMorgan Chase & Co. (NYSE:JPM) to $198 from $177, and maintained a Buy rating on the shares.
In the second quarter of 2021, JPMorgan Chase & Co. (NYSE: JPM) reported an EPS of $3.78, beating market estimates by $0.61. The company’s revenue for the quarter amounted to $30.48 billion, surpassing forecast predictions by $762.45 million.
By the end of the second quarter of 2021, 108 hedge funds out of the 873 tracked by Insider Monkey held stakes in JPMorgan Chase & Co. (NYSE:JPM) worth roughly $4.8 billion. This is compared to 111 hedge funds in the previous quarter with a total stake value of approximately $5.2 billion.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. (NYSE:JPM) with 6.9 million shares worth more than $1 billion.
You can also take a peek at 10 Cheap Dividend Kings with Over 2% Yield and 12 Best Semiconductor Stocks To Invest In Right Now.
