1. Washington Trust Bancorp, Inc. (NASDAQ: WASH)
Number of Hedge Fund Holders: 7
Washington Trust Bancorp, Inc. (NASDAQ: WASH) is a Rhode Island-based banking and financial services firm founded in 1800. It is ranked first on our list of 10 best stocks to buy for early retirement. The company offers commercial banking and wealth management services and has over 20 branches in different states in the US. Washington Trust stock has returned more than 79% to investors over the course of the past twelve months. The company has a market cap of close to $1 billion and lots of growth potential.
In earnings results for the first quarter of 2021, Washington Trust Bancorp, Inc. (NASDAQ: WASH) posted earnings per share of $1.17, beating market estimates by $0.13. The revenue over the period was close to $59 million, up more than 12% compared to the same period last year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Third Avenue Management is a leading shareholder in Washington Trust Bancorp, Inc. (NASDAQ: WASH) with 182,745 shares worth more than $9.4 million.
In its Q3 2020 investor letter, Third Avenue Management, an asset management firm, highlighted a few stocks and Washington Trust Bancorp, Inc. (NASDAQ: WASH) was one of them. Here is what the fund said:
“After multiple years of patiently monitoring another bank, Washington Trust Bancorp (“Washington Trust”), its shares finally reached our buy price.
Washington Trust is a high-quality commercial and retail bank that we’ve followed for years. The bank operates in the Northeast with a footprint spread across Rhode Island, Connecticut, and Massachusetts. Washington Trust boasts a rich history—it was founded in 1800 and holds the impressive distinction of being the nation’s oldest community bank. The bank has not only demonstrated an aptitude for navigating countless economic cycles but has also flourished and compounded shareholder value along the way. We believe the bank is well-positioned to continue doing so over the long term as well and is a great addition to the Fund’s compounder bucket. Although Washington Trust enjoys one of the top market shares in its core state of Rhode Island, its share of the market is still in the single digits, leaving significant opportunities for continued gains. Moreover, the bank’s expansion within Connecticut and Massachusetts is still relatively nascent, representing even larger growth opportunities. Additionally, Washington Trust operates a valuable wealth management business, unusually large for a bank of its size, helping it generate an outsized portion of its profits from fee income.
Beyond Washington Trust’s outlook for growth, we would highlight the bank’s extraordinary track record and high quality management team, whom we first met two years ago. Over the years, Washington Trust has proven itself to be a conservative institution, always maintaining a strong balance sheet and best-in-class financial metrics, including consistent profitability, strong returns, and pristine asset quality. This has resulted in the company compounding value at exceptional rates over the long term—at mid-teen percentages on an annualized basis. Given all this, the chance to purchase the bank at a significant discount to our estimate of intrinsic value was quite compelling. To put the valuation opportunity in perspective, we were able to initiate the investment in this quality franchise at a dividend yield of seven percent despite a payout ratio only around fifty percent.”
You can also take a peek at Billionaire Izzy Englander’s Top 10 Stock Picks and Billionaire David Abrams’ Top Stock Picks.
