In this article, we will take a look at the 10 financial stocks to buy now according to billionaire Cliff Asness.
In the realm of finance, Cliff Asness is a guru whose name doesn’t need to be introduced. Asness graduated with a bachelor’s degree in computer science and finance from the University of Pennsylvania in 1988. He later went on to complete his Ph.D. in finance at the University of Chicago in 1994. Cliff Asness started his hedge fund, AQR Capital Management, with David Kabiller, John Liew, and Robert Krail in 1998 after working at Goldman Sachs Asset Management while pursuing his Ph.D. As of September 2022, Asness’ actual net worth stands at $1.4 billion.
AQR Capital Management, a Connecticut-based quantitative hedge fund, manages assets for institutional investors and financial advisors. The hedge fund, which specializes in factor-based investing, seeks to create highly diversified investments while minimizing the risks associated with them. The fund was able to produce consistent returns over the years by adhering to the value investment strategy.
As the possibility of an economic recession increases due to the Federal Reserve raising interest rates, the market has become unstable and shares of Cliff Asness’ AQR Capital Management’s 13F portfolio could decline if the market falls. However, there are opportunities for long-term investors who buy high-quality equities.
As of Q2 2022, Asness’ AQR Capital Management’s 13F portfolio is valued at over $44 billion. AQR Capital Management mainly invests in information technology, healthcare, finance, consumer staples, consumer discretionary, and communications sectors with a top ten holding concentration of 13.95%. The 10 financial stocks to buy now according to billionaire Cliff Asness accounted for 4.15% of the portfolio weight.
Cliff Asness of AQR Capital Management
Methodology:
For our list, we took the top 10 financial stocks in Cliff Asness’ AQR Capital Management’s 13F portfolio at the end of Q2 2022 and we ranked them #10 to #1. We also included the number of hedge fund holders in our database who owned shares in the same stock at the end of Q2 2022.
Financial Stocks to Buy Now According to Billionaire Cliff Asness
10. The Travelers Companies, Inc. (NYSE:TRV)
AQR Capital Management’s Stake Value: $139.9 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.31%
Number of Hedge Fund Holders: 31
The Travelers Companies, Inc. (NYSE:TRV) is an American insurance company, with a focus on property and commercial insurance. Business insurance, bond, and specialty insurance, and personal insurance are the three segments through which the company operates. According to the latest 13F filings, AQR Capital Management owns 848,156 shares worth $139.9 million in The Travelers Companies, Inc.. The hedge fund decreased its holdings in the firm by 23% in the second quarter of 2022.
Analysts like the stock. On July 25, investment advisory Raymond James upgraded The Travelers Companies, Inc. stock from Market Perform to a Strong Buy rating with a price target of $185.
Given double-digit top-line growth across all 3 segments, The Travelers Companies, Inc. has shown strong profits. In the second fiscal quarter, The Travelers Companies, Inc. reported a normalized EPS of $4.22, beating estimates by $0.60.
The Travelers Companies, Inc. is also popular with hedge funds. According to Insider Monkey’s Q2 data, 31 hedge funds had stakes in The Travelers Companies, Inc.. The total value of the holdings is approximately $433 million. When looking at the institutional investors followed by Insider Monkey, First Eagle Investment Management, holds the biggest position in The Travelers Companies, Inc..
Alongside Citigroup Inc. (NYSE:C), The Allstate Corporation (NYSE:ALL), and Berkshire Hathaway Inc. (NYSE:BRK-B), The Travelers Companies, Inc. is a financial stock held by Cliff Asness’ AQR Capital Management at the end of Q2 2022.
9. The Goldman Sachs Group, Inc. (NYSE:GS)
AQR Capital Management’s Stake Value: $152.5 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.34%
Number of Hedge Fund Holders: 69
The Goldman Sachs Group, Inc. (NYSE:GS), headquartered in New York City, is an investment bank and financial services company. The four main divisions of the company are investment banking, global markets, asset management, and consumer and wealth management.
In Q2 2022, AQR Capital Management decreased its stake in The Goldman Sachs Group, Inc. by 12% and now holds shares worth $152.5 million. It ranks #9 on our list of 10 Financial Stocks to Buy Now According to Billionaire Cliff Asness.
Given its scale and strong brand, The Goldman Sachs Group, Inc. has higher margins than many of its competitors. In the second fiscal quarter, The Goldman Sachs Group, Inc. reported a normalized EPS of $7.73, beating analyst estimates by $1.04. The company’s revenue in the second quarter came in at $11.86 billion, surpassing revenue estimates by $1.16 billion.
Overall, the company remained a popular stock among hedge funds. At the end of the second quarter of 2022, 69 hedge funds in the database of Insider Monkey held stakes worth $4.6 billion in The Goldman Sachs Group, Inc.. As of September 12, Eagle Capital Management owned more than 3 million shares in The Goldman Sachs Group, Inc.. The hedge fund’s total stake in the company stood at over $1 billion, which accounted for 4.37% of its 13F portfolio.
Here is what GoodHaven Capital Management specifically said about The Goldman Sachs Group, Inc. in its Q2 2022 investor letter:
“We also initiated a position in Goldman Sachs at an inexpensive valuation and are attracted by the potential durability of the company’s ability to generate high returns on equity driven in part by the growth in their existing and new franchises.”
8. Visa Inc. (NYSE:V)
AQR Capital Management’s Stake Value: $166.5 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.37%
Number of Hedge Fund Holders: 166
Visa Inc. (NYSE:V) is a financial services company. The company facilitates international electronic money transfers, most typically through Visa prepaid, debit, and credit cards. Asness’ AQR Capital Management owns 859,570 shares of Visa Inc., accounting for 0.37% of its 13F portfolio. The hedge fund increased its stake by 21% in Q2 2022, as compared to the previous quarter. Visa Inc. is #8 on our list of 10 Financial Stocks to Buy Now According to Billionaire Cliff Asness.
Given its leading position in the monetary sector, Visa Inc. has both economies of scale and earnings power. The company also has good long-term prospects, even though a recession or slowdown in the economy could cause the stock to decline in the near term.
In the second fiscal quarter, Visa Inc. reported a normalized EPS of $1.98, beating analyst estimates by $0.23. The company’s revenue in the second quarter came in at $7.3 billion, an increase of 19.1% year over year, and beat revenue estimates by $230 million.
Some analysts are also bullish on the firm’s prospects, with investment advisories like Mizuho, Susquehanna, and Barclays raising their price targets on the stock recently.
Hedge funds like the stock. At the end of the second quarter, 166 hedge funds tracked by Insider Monkey owned stakes in Visa Inc.. The total value of these stakes is $24 billion. This is compared to 159 hedge funds in the previous quarter that held stakes worth $28 billion in the firm.
Here is what Baron Fintech Fund has to say about Visa Inc. in its Q2 2022 investor letter:
“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 Visa, Inc. (NYSE:V). 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.”
7. American International Group, Inc. (NYSE:AIG)
AQR Capital Management’s Stake Value: $167.6 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.37%
Number of Hedge Fund Holders: 44
American International Group, Inc. (NYSE:AIG), found in 1919, is an insurance organization. The company offers a variety of life insurance, retirement solutions, property casualty insurance, and financial services to its customers.
Some analysts have high hopes for the company’s prospects. On September 12, Credit Suisse analyst Andrew Kligerman kept a Neutral rating on American International Group, Inc. stock and raised his price target to $60 from $50. Kligerman noted that AIG recently spun off Corebridge Financial, which could help the valuation of AIG’s assets if the stock rallies.
In Q2, AQR Capital Management increased its position in American International Group, Inc. by 176%, which represented 0.37% of the hedge fund’s 13F portfolio. When looking at the institutional investors followed by Insider Monkey at the end of Q2, Harris Associates managed by Natixis Global Asset Management, holds the biggest position in American International Group, Inc.. Harris Associates has over $1 billion position in the stock, comprising 2.11% of its 13F portfolio.
Here is what Diamond Hill Capital has to say about American International Group, Inc. in its Q1 2022:
“Other top contributors included property and casualty insurance company American International Group (NYSE:AIG). AIG continued to execute on its turnaround of the global property and casualty business, showing underwriting margin improvements during the quarter.”
6. Wells Fargo & Company (NYSE:WFC)
AQR Capital Management’s Stake Value: $171 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.38%
Number of Hedge Fund Holders: 83
Wells Fargo & Company, headquartered in San Francisco, California, provides retail, commercial, and corporate banking services.
According to the latest 13F filings, AQR Capital Management owns more than 4 million shares worth $171 million in Wells Fargo & Company. The hedge fund increased its holdings in the company by 63% in the second quarter of 2022. As a result, Wells Fargo & Company ranks #6 on our list of 10 Financial Stocks to Buy Now According to Billionaire Cliff Asness.
Given its financial stability and expansion prospects, the company has the potential to grow earnings in the long term. On July 27, Wells Fargo & Company declared a quarterly dividend of $0.30 per share, an increase of 20% from the previous. The company’s dividend yield on September 14 came in at 2.78%.
83 hedge funds in Insider Monkey’s database had Wells Fargo & Company in a bullish position at the end of the second quarter of 2022. These hedge funds held shares in the firm worth about $5.2 billion. Eagle Capital Management, with a position worth $709 million, stood as the most significant shareholder of Wells Fargo & Company.
Like Wells Fargo & Company, Citigroup Inc., The Allstate Corporation, and Berkshire Hathaway Inc. are financial stocks owned by billionaire Cliff Asness’ AQR Capital Management at the end of Q2 2022.
5. Everest Re Group, Ltd. (NYSE:RE)
AQR Capital Management’s Stake Value: $188.5 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.42%
Number of Hedge Fund Holders: 28
Everest Re Group, Ltd. (NYSE:RE) is a prominent global provider of insurance and reinsurance. It operates in the U.S., Europe, Singapore, Canada, Bermuda, and other regions through its subsidiaries.
Some analysts are bullish. In July, Jefferies kept a Buy rating on Everest Re Group, Ltd. stock and increased its price target to $344 from $343. Everest Re Group, Ltd. also had strong Q2 results with normalized EPS of $9.79, beating analyst estimates by $1.69.
Many hedge funds like the stock. According to the second quarter database of Insider Monkey, 28 hedge funds were bullish on Everest Re Group, Ltd., with combined stakes worth about $560 million. AQR Capital Management is the biggest stakeholder of Everest Re Group, Ltd. as of the second quarter of 2022, with more than 681,939 shares worth more than $188 million.
4. JPMorgan Chase & Co. (NYSE:JPM)
AQR Capital Management’s Stake Value: $212.3 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.47%
Number of Hedge Fund Holders: 104
JPMorgan Chase & Co., headquartered in New York City, offers advanced financial solutions to individuals, startups, large enterprises, organizations, governments, and institutions all around the world.
For the past 10 years JPMorgan Chase & Co. has continuously increased its dividends. As of September 2022, the company has a quarterly dividend of $1.00 per share with a dividend yield of 3.44%.
In Q2 2022, AQR Capital Management owned over 1.9 million shares in JPMorgan Chase & Co., worth $121.3 million. The company accounted for 0.47% of the hedge fund’s 13F portfolio.
At the end of Q2 2022, 104 hedge funds tracked by Insider Monkey were bullish on JPMorgan Chase & Co.. These stakes are collectively valued at around $5.8 billion. When looking at the institutional investors followed by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the biggest position in JPMorgan Chase & Co..
3. Citigroup Inc. (NYSE:C)
AQR Capital Management’s Stake Value: $215 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.48%
Number of Hedge Fund Holders: 82
Citigroup Inc., headquartered in New York City, is an investment bank and financial services company. In 1998, Travelers Group and Citicorp, two massive financial conglomerates, merged to form this company. In Q2 2022, AQR Capital Management increased its stake in Citigroup Inc. by 105% and now holds shares worth $215 million. It ranks #3 on our list of 10 Financial Stocks to Buy Now According to Billionaire Cliff Asness.
In the second fiscal quarter, Citigroup Inc. reported normalized EPS of $2.19 and revenue of $19.64 billion, beating estimates by $0.52 and $1.32 billion respectively.
On July 21, Citigroup Inc. declared a quarterly dividend of $0.51 per share, in line with previous. The company’s dividend yield on September 14 came in at 4.16%.
As of Q2 2022, 82 of the 895 hedge funds tracked by Insider Monkey were long Citigroup Inc. shares, for a total value of $7.4 billion. Warren Buffett’s Berkshire Hathaway was its largest shareholder with ownership of 55 million shares valued at $2.5 billion.
2. The Allstate Corporation (NYSE:ALL)
AQR Capital Management’s Stake Value: $215 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.48%
Number of Hedge Fund Holders: 37
The Allstate Corporation, headquartered in Northfield Township, Illinois, is an insurance company. Through its subsidiaries, the company engages in the property and casualty insurance business.
Asness’ AQR Capital Management owns more than 1.7 million shares in The Allstate Corporation, representing 0.48% of the hedge fund’s holdings based on the latest security filings.
The Allstate Corporation has a strong dividend history and has raised its dividend every year for the last 11 years. As of September, the company also has a dividend yield of 2.68% and pays a quarterly dividend of $0.85 per share.
In Q2 2022, The Allstate Corporation reported quarterly revenue of $12.22 billion, beating estimates by $850 million. Shares of The Allstate Corporation have also increased over 8.03% year to date.
Many hedge funds like the stock. According to the second quarter database of Insider Monkey, 37 hedge funds were bullish on The Allstate Corporation, with combined stakes worth about $627.3 million.
1. Berkshire Hathaway Inc. (NYSE:BRK-B)
AQR Capital Management’s Stake Value: $237.4 million
Percentage of AQR Capital Management’s 13F Portfolio: 0.53%
Number of Hedge Fund Holders: 109
Berkshire Hathaway Inc., headquartered in Omaha, Nebraska, is a diversified holding company. Its subsidiaries are involved in manufacturing, retailing, services, energy generation and distribution, insurance, freight rail transportation, and other businesses. With robust business fundamentals, Berkshire Hathaway Inc. is generally regarded as a less risky stock in case the economy slows down.
Given Berkshire Hathaway Inc. accounts for 0.53% of AQR Capital Management’s 13F holdings at the end of Q2, the stock ranks #1 on our list of 5 and 10 Financial Stocks to Buy Now According to Billionaire Cliff Asness.
With 109 hedge funds in our database holding positions at the end of Q2, 2022, Berkshire Hathaway Inc. is also one of the most widely held stocks by hedge funds on our list. Among them, Bill & Melinda Gates Foundation Trust is the biggest stakeholder of Berkshire Hathaway Inc. as of the second quarter of 2022, with more than 34 million shares worth more than $9 billion.
You can also take a look at 10 Best Media Stocks To Buy and 13 Largest Lithium Companies In the World.
Follow Insider Monkey on Twitter
Suggested articles:
This article is originally published at Insider Monkey.
