In this piece, we will take a look at the top five finance stocks to buy according to George Soros’ Soros Fund Management. If you want a detailed introduction about Mr. Soros, and learn about more stocks, then take a look at 10 Finance Stocks to Buy Today According to George Soros’ Soros Fund Management.
5. LPL Financial Holdings Inc. (NASDAQ:LPLA)
Soros Fund Management’s Stake Value: $32.8 million
Percentage of Soros Fund Management’s 13F Portfolio: 0.45%
Number of Hedge Fund Holders: 48
LPL Financial Holdings Inc. (NASDAQ:LPLA) is a brokerage and investment advisory services provider headquartered in the United States. The company offers services and products such as annuities, equities, mutual funds, savings plans, insurance, and alternative investments.
Mr. Soros’ hedge fund owned 205,431 LPL Financial Holdings Inc. (NASDAQ:LPLA) shares during the fourth quarter of last year. These were worth $32.8 million and they represented 0.45% of its investment portfolio. Insider Monkey’s survey of 924 hedge funds during the same time period revealed that 48 had owned the company’s shares.
LPL Financial Holdings Inc. (NASDAQ:LPLA) brought in $2 billion in revenue and $1.32 in GAAP EPS by the end of its fourth fiscal quarter, beating analyst estimates on both counts. JMP Securities upgraded the firm’s share price rating to Outperform from Market Perform in April 2022, stating that interest rate stabilization will help the company.
LPL Financial Holdings Inc. (NASDAQ:LPLA)’s largest investor is Robert Pohly’s Samlyn Capital which owns 2.2 million shares worth $356 million.
Baron Funds mentioned the company in its fourth quarter 2021 investor letter. Here is what the firm said:
“We initiated a position in LPL Financial Holdings Inc., an independent broker-dealer for financial advisors. The U.S. market for financial advice continues to grow, as does the volume of assets that are advisor-mediated. There is also an ongoing migration away from wirehouses, such as Morgan Stanley and Wells Fargo, to independent firms in which the financial advisor runs their own practice and retains more of the economics. LPL offers an integrated technology platform, brokerage services, and practice management support that help advisors run their own independent advisory firms with a broad menu of investment options. LPL is the largest independent broker-dealer in the country with $1.1 trillion of assets under management and nearly 20,000 advisors on its platform. LPL is classified within the “Leader” category.
We believe that LPL has compelling growth opportunities and enjoys strong competitive advantages. As the largest independent broker-dealer, LPL has scale advantages from managing a growing pool of assets over a fixed cost base. LPL has invested heavily in technology over the past five years, and it also self-clears transactions, which provides additional revenue streams. These capabilities lead to superior margins and cash flow, which then enable LPL to invest more in its technology and better compete for new advisors. LPL continues to gather assets as advisors migrate away from the wirehouses. The company is shifting towards advisory fees paid as a percentage of assets under management and away from transaction-based brokerage commissions. Given this revenue model, LPL benefits from underlying asset appreciation, which is a natural tailwind to growing LPL’s asset base. LPL also earns cash sweep revenues on idle client cash balances. As interest rates rise, we believe LPL will be able to monetize these balances at higher yields, improving its overall return on assets. With a profitable business, good growth prospects, and underlying tailwinds, we believe that LPL is well positioned to continue growing earnings per share at a rapid rate.”
