In this article, we discuss 5 best financial stocks to buy now. If you want to read about some more financial stocks, go directly to 14 Best Financial Stocks To Buy Now.
5. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 99
Bank of America Corporation (NYSE:BAC) provides banking and financial products and services for individual consumers, small and middle-market businesses, institutional investors, large corporations, and governments. It is one of the best financial stocks to invest in. The company has recently ramped its investments in minority-owned banks as it deposits an additional $100 million into minority depository institutions.
On September 12, investment advisory Deutsche Bank maintained a Buy rating on Bank of America Corporation (NYSE:BAC) stock and lowered the price target to $45 from $51. Analyst Matt O’Connor issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in Bank of America Corporation (NYSE:BAC), with 1 billion shares worth more than $31 billion.
In its Q2 2022 investor letter, Artisan Partners, 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:
“We made only one new purchase during the quarter, initiating a position in Bank of America (BAC). As one of America’s largest banks, Bank of America Corporation (NYSE:BAC) is second only to JPMorgan Chase (JPM) in size and is probably its closest peer. Both are well-run banks, but compared to JPM, since the GFC, BAC has retired more shares, grown EPS faster and currently has more capital and a lower dividend payout. We are attracted to BAC’s strong capital base, high capital generation capacity, large loan loss reserve, low (~50%) loan/deposit ratio, short duration investment securities book, and low dividend payout that provides financial flexibility. BAC has a less volatile earnings stream than JPM with lower capital market sensitive exposures. Additionally, BAC is rigorously stress tested by the Fed every year in quantitative and qualitative fashion. Warren Buffett’s Berkshire Hathaway, which we hold in the portfolio, owns 12% of BAC. He petitioned the Fed to own more than 10%, so he clearly likes it. Bank stocks were strong gainers in 2021 on the prospects of higher rates boosting net interest margins, but the stocks pulled back in the first half of 2022 on economic concerns. We believe BAC has massive scale advantages, should benefit from increasing interest rates, particularly in the 2-year part of the yield curve, and should grow over time with the economy. The economic environment is highly uncertain, but current consensus includes the provision for losses more than doubling and capital markets activity slowing. Against that backdrop, our purchase price equated to about 8.5X our estimates of “mid-cycle” earnings. With leading businesses, a double-digit ROE, a prudent capital return strategy and a strong balance sheet, we believe this entry point offered a solid long-term value.”
4. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co. (NYSE:JPM) operates as a financial services company worldwide. It is one of the top financial stocks to invest in. The bank recently announced that it was planning to hire 2,000 engineers globally through the year, even as the economy softens. The statement was made by Lori Beer, the global chief informer officer, to news agency Reuters. The company has recently hired 5,000 software developers and data scientists and plans to add more in the coming months.
On September 12, Deutsche Bank analyst Matt O’Connor maintained a Buy rating on JPMorgan Chase & Co. (NYSE:JPM) stock and lowered the price target to $155 from $174, noting that the banks have underperformed this year largely driven by recession fears.
At the end of the second quarter of 2022, 104 hedge funds in the database of Insider Monkey held stakes worth $5.8 billion in JPMorgan Chase & Co. (NYSE:JPM), compared to 110 in the preceding quarter worth $5 billion.
In its Q1 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:
“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.”
3. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc. (NYSE:BRK-B) is a diversified conglomerate with interests in insurance, finance, and other sectors. It is one of the elite financial stocks to invest in. Greg Abel, the vice chair of the firm and the likely successor to CEO Warren Buffett, recently bought about $68 million of the company’s shares. This appears to be his first purchase of Berkshire stock since he assumed the position in 2018.
On September 21, investment advisory Edward Jones upgraded Berkshire Hathaway Inc. (NYSE:BRK-B) to Buy from Hold. Analyst James Shanahan issued the ratings update.
In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. (NYSE:BRK-B) was one of them. Here is what the fund said:
“Diversified holding company Berkshire Hathaway Inc. (NYSE:BRK-B) reported strong earnings during the quarter and benefited from continued share repurchases below intrinsic value. The company also announced significant deployments of excess cash during the quarter, including the acquisition of Alleghany and a large increase in its stake in Occidental Petroleum.”
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 109
Mastercard Incorporated (NYSE:MA) is a technology company that provides transaction processing and other payment-related products and services in the United States and internationally. It is one of the premier financial stocks to invest in. The firm recently announced that Mastercard Crypto Secure, a tech-solution offered by the firm, would bring a new level of trust to crypto purchases across the global network of 24,000 exchanges.
On August 1, BMO Capital analyst James Fotheringham maintained an Outperform rating on Mastercard Incorporated (NYSE:MA) stock and raised the price target to $422 from $402, noting that the company’s Q2 results benefited from higher exposure to cross-border travel.
At the end of the second quarter of 2022, 109 hedge funds in the database of Insider Monkey held stakes worth $17 billion in Mastercard Incorporated (NYSE:MA), compared to 104 in the preceding quarter worth $19 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“The Fund’s holdings in the Payments and Information Services themes also contributed to relative performance. Within Payments, lower exposure to this lagging theme and outperformance of Mastercard Incorporated (NYSE:MA) added the most value. These global payment networks are viewed as safe havens during market downturns but are also benefiting from resilient payment volumes and a sharp rebound in international travel.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) operates as a payments technology company worldwide. It is one of the most prominent financial stocks to invest in. It recently revealed that US payments volume in August increased from a year ago, even after the company suspended operations in Russia in March 2022, and was flat with July 2022 results. Credit payment volume increased 17% during the period.
At the end of the second quarter of 2022, 166 hedge funds in the database of Insider Monkey held stakes worth $24 billion in Visa Inc. (NYSE:V), compared to 159 in the preceding quarter worth $28.1 billion.
In its Q2 2022 investor letter, Lakehouse Capital, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“It was business as usual for Visa Inc. (NYSE:V) as it delivered another solid quarter driven by strong US growth, the ongoing gradual displacement of cash with digital transactions, and accelerated growth in cross-border volume as travel spending plays catch up post-Covid. Visa processed 49.3 billion transactions on its network, up 16% year-on-year and 39% above pre-pandemic levels, driving $2.7 trillion in total payments volume, both of which have more than recovered from the impacts of the pandemic. The total number of cards in Visa’s network also grew by 8% year-on-year to 3.9 billion.
Cross-border transactions were a key issue for Visa during the pandemic, but this headwind has now turned into a tailwind. Constant currency cross-border volumes rose 40% (48% excluding intra-Europe) in the most recent quarter and we expect this trend will continue to play out in the year ahead. While a potential economic slowdown and geopolitical concerns are always a risk, we take comfort in the fact that Visa has a sixty-plus year track record of successfully overcoming numerous macroeconomic challenges that in the moment appeared insurmountable. We believe this current episode will prove no different and that the combination of a very attractive industry structure and the ongoing secular shift towards digital payments provides a foundation that will enable Visa to continue winning for many years to come.”
You can also take a peek at Top 10 REIT Stocks Under $10 and 11 Cheap Healthcare Stocks To Invest In.
