In this article, we discuss 5 finance stocks to buy according to billionaire Ray Dalio. If you want our detailed analysis of these stocks, go directly to 10 Finance Stocks to Buy According to Billionaire Ray Dalio.
5. Citigroup Inc. (NYSE:C)
Bridgewater Associates’ Stake Value: $56,001,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.30%
Number of Hedge Fund Holders: 79
Citigroup Inc. (NYSE:C) is one of the best finance stocks to buy according to Ray Dalio, with the billionaire elevating his position in the stock by 14% in Q3 2021, owning a total of 797,968 shares worth $56 million. Citigroup Inc. (NYSE:C) is a multinational financial services corporation and the third largest banking institution in the US, offering asset and wealth management, banking, commodities trading, equities trading, insurance, mortgage loans, mutual funds, and private equity.
Citigroup Inc. (NYSE:C), on October 14, announced earnings for the third quarter. EPS over the period came in at $2.15, beating estimates by $0.36. The revenue totaled $17.15 billion, exceeding estimates by $223.95 million.
Odeon Capital analyst Dick Bove on December 15 upgraded Citigroup Inc. (NYSE:C) to Buy from Hold with a $69.25 price target.
In the third quarter of 2021, 79 hedge funds reported owning stakes in Citigroup Inc. (NYSE:C), down from 87 funds in the prior quarter. Harris Associates is the biggest Citigroup Inc. (NYSE:C) stakeholder as of Q3 2021, with an approximately $2 billion position in the company.
Here is what Artisan Value Fund has to say about Citigroup Inc. (NYSE:C) in their Q4 2020 investor letter:
“We fully exited the position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
4. Morgan Stanley (NYSE:MS)
Bridgewater Associates’ Stake Value: $73,072,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.40%
Number of Hedge Fund Holders: 65
Ray Dalio purchased additional stakes in Morgan Stanley (NYSE:MS) in the third quarter, which elevated the billionaire’s position in the company by 27%. Dalio, via Bridgewater Associates, owns 750,922 Morgan Stanley (NYSE:MS) shares, worth $73 million, representing 0.40% of the firm’s total Q3 securities. Morgan Stanley (NYSE:MS) is a multinational investment bank and financial services organization from New York.
In the Q3 earnings report of Morgan Stanley (NYSE:MS), published on October 14, the company posted an EPS of $2.04, exceeding estimates by $0.36. The revenue jumped 26.56% year-over-year, reaching $14.75 billion, surpassing estimates by $799.47 million.
On December 3, Citi analyst Keith Horowitz upgraded Morgan Stanley (NYSE:MS) to Buy from Neutral with a price target of $115, up from $105. The analyst stated that he expects further multiple expansion for Morgan Stanley (NYSE:MS) as the company delivers on its wealth management opportunity “and is awarded a growth multiple”, and the stock offers “high quality at a reasonable price.”
One of the leading Morgan Stanley (NYSE:MS) stakeholders as of September 2021 is Fisher Asset Management, with a $970.5 million position in the company. Overall, 65 hedge funds in the third quarter database of Insider Monkey were long Morgan Stanley (NYSE:MS).
Here is what Artisan Value Fund has to say about Morgan Stanley (NYSE:MS) in its Q3 2021 investor letter:
“Morgan Stanley, a leading global financial services company, came into the portfolio in late 2020 as a result of its purchase of E*TRADE. The acquisition is a great fit for Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked the business by adding less volatile fee streams to complement its leading positions in cyclical businesses such as advisory, equities and FICC (fixed income, currencies and commodities). We believe the company will prove its resiliency and value over the long term.”
3. Wells Fargo & Company (NYSE:WFC)
Bridgewater Associates’ Stake Value: $77,842,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 88
Wells Fargo & Company (NYSE:WFC), a California-based multinational financial services organization operating primarily via Wells Fargo Bank, is one of the top finance stocks to purchase according to billionaire Ray Dalio, who added 19% to his existing stake in the company during the third quarter of 2021. Bridgewater Associates has a $77.8 million position in Wells Fargo & Company (NYSE:WFC), which accounts for 0.42% of the firm’s total Q3 portfolio.
One of the main stakeholders of Wells Fargo & Company (NYSE:WFC) as of September is Theleme Partners, with 20.1 million shares worth $934.1 million. According to Insider Monkey’s Q3 data, a total of 88 funds were bullish on Wells Fargo & Company (NYSE:WFC), down from 94 funds in the preceding quarter.
On October 14, Wells Fargo & Company (NYSE:WFC) posted its Q3 results, announcing earnings per share of $1.22, exceeding estimates by $0.28. The $18.83 billion revenue dipped 0.15% year-over-year, but outperformed estimates by $542.17 million.
UBS analyst Erika Najarian on December 9 assumed coverage of Wells Fargo & Company (NYSE:WFC) with a Buy rating and a $65 price target, calling Wells Fargo & Company (NYSE:WFC) one of her “highest conviction Buy ideas.”
Here is what Davis Global Fund has to say about Wells Fargo & Company (NYSE:WFC) in its Q3 2021 investor letter:
“…This second chart highlights that financials remain the cheapest part of the market today and continue to be extremely attractive. Strong capital ratios, conservative lending practices, already record low interest rates and now a strengthening economy, all paired with low valuations, bode well for future returns.
Take our top financials holding in Wells Fargo, for instance. Wells Fargo is trading at 1.3x tangible book value, while we expect return on equity (ROE) to be in the mid-to-high teens over time. Even in this low-rate environment, the current multiple is only 12x 2021 owner earnings, and our IRR estimate is 12–13%. Wells Fargo has performed well this year, up 51% year-to-date, yet still looks very attractive, which speaks to how undervalued it was and why it is so important to be patient when investing in high-quality companies trading at low valuations. Rather than invest on the basis of unpredictable near-term catalysts, we prefer to be patient as earnings and cash build up, even if the stock price does not immediately reflect the economic reality. We continue to like our positions in financials.”
2. Bank of America Corporation (NYSE:BAC)
Bridgewater Associates’ Stake Value: $101,419,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.55%
Number of Hedge Fund Holders: 72
Bank of America Corporation (NYSE:BAC) is a multinational investment bank engaged in financial services including asset management, commodities, equities trading, insurance, investment management, mortgage loans, mutual funds, private equity, risk management, and wealth management.
Ray Dalio, as of Q3 2021, boosted his stake in Bank of America Corporation (NYSE:BAC) by 24%, making it one of the best finance stocks to buy according to the billionaire. Dalio, via Bridgewater Associates, owns a $101.4 million position in Bank of America Corporation (NYSE:BAC), which represents 0.55% of the fund’s total investments.
Bank of America Corporation (NYSE:BAC) announced earnings for the third quarter on October 14, posting an EPS of $0.85, beating estimates by $0.15. The Q3 revenue was up 11.33% from the prior-year quarter, equaling $22.77 billion, surpassing estimates by $1.16 billion.
UBS analyst Erika Najarian assumed coverage of Bank of America Corporation (NYSE:BAC) on December 9 with a Buy rating and a $64 price target, naming Bank of America Corporation (NYSE:BAC) her top pick among the U.S. large cap banks.
Of the 72 hedge funds that were bullish on Bank of America Corporation (NYSE:BAC) in Q3, Berkshire Hathaway is the largest stakeholder of the company, with more than 1 billion shares worth $42.8 billion.
Here is what Oakmark Funds has to say about Bank of America Corporation (NYSE:BAC) in its Q3 2021 investor letter:
“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.
If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives at $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”
1. JPMorgan Chase & Co. (NYSE:JPM)
Bridgewater Associates’ Stake Value: $102,152,000
Percentage of Bridgewater Associates’ 13F Portfolio: 0.55%
Number of Hedge Fund Holders: 101
JPMorgan Chase & Co. (NYSE:JPM) is the top finance stock pick of billionaire Ray Dalio, with his hedge fund increasing its position in the stock by 28% in Q3, holding 624,057 shares worth $102.1 million. JPMorgan Chase & Co. (NYSE:JPM) is a multinational financial services holding company and one of America’s Big Four banks.
JPMorgan Chase & Co. (NYSE:JPM) reported its third quarter earnings on October 13, announcing an EPS of $3.55, exceeding estimates by $0.55. The $29.65 billion revenue also beat estimates by $12.88 million.
On December 9, UBS analyst Erika Najarian initiated coverage of JPMorgan Chase & Co. (NYSE:JPM) with a Buy rating and a $210 price target. According to the analyst, the stock’s “rare” year-to-date price underperformance relative to peers presents investors with a “compelling opportunity”, and concerns over capital constraints eroding JPMorgan Chase & Co. (NYSE:JPM)’s best-in-class revenue power are “overblown”.
In the third quarter of 2021, 101 hedge funds in the database of Insider Monkey were bullish on JPMorgan Chase & Co. (NYSE:JPM), with total stakes amounting to $5.63 billion. Adage Capital Management is one of the leading JPMorgan Chase & Co. (NYSE:JPM) stakeholders as of Q3, with a $489.8 million position.
Vltava Fund mentioned JPMorgan Chase & Co. (NYSE:JPM) in its Q3 2021 investor letter. Here is what the fund said:
“While all the previous names could be categorized as founder, continuing, or key shareholders, these last two names fall into the category of hired professional managers. This is actually the most numerous category among the bosses of large companies, but even among them there exist a number of individuals with exceptional long-term track records. In our view, these include Jamie Dimon and Herman Gref.
We consider JP Morgan to be the strongest, largest, and most profitable bank in the world. It has not always been so, and the fact that it is what it is today can be attributed especially to its CEO Jamie Dimon. Dimon has spent his entire career in banking. He came to JP Morgan in a roundabout way in 2004 after the bank bought Bank One, of which he was CEO at the time. Since early 2006, Dimon has been CEO of the entire JP Morgan.
The quality and strength of JP Morgan under his leadership became fully apparent for the first time in 2008. Not only did JP Morgan help to stabilise the market by taking over the failing Bear Stearns in the spring of that year, but it was the only major US bank that did not require government assistance throughout the Great Financial Crisis and that was highly profitable even in the difficult year of 2008. Today, JP Morgan is even bigger, even more profitable, and even stronger than ever before. Many investors view banks with disdain, but a good bank with good management can be a very good long-term investment. From the time of its merger with Bank One in 2004 through the end of 2020, JP Morgan’s stock has outperformed even the S&P 500 index. The bank has earned a total net profit of USD 330 billion during this period, of which USD 232 billion has been paid out to shareholders in dividends and in share buybacks. I can recommend two books about Jamie Dimon: The House of Dimon and Last Man Standing.”
You can also take a look at 10 High Dividend Stocks to Buy According to Billionaire Lee Cooperman and 10 Dividend Stocks to Buy According to Billionaire Jim Simons’ Hedge Fund.
