5 High Growth Financial Stocks To Buy

In this article, we discuss 5 high growth financial stocks to buy. If you want to see more stocks in this selection, check out 12 High Growth Financial Stocks To Buy. 

5. East West Bancorp, Inc. (NASDAQ:EWBC)

Number of Hedge Fund Holders: 33

Quarterly Revenue Growth YoY as of December 30, 2022: 40.5%

East West Bancorp, Inc. (NASDAQ:EWBC) is a California-based bank holding company for East West Bank that provides a range of personal and commercial banking services to businesses and individuals. It operates through three segments – Consumer and Business Banking, Commercial Banking, and Other. On January 26, East West Bancorp, Inc. (NASDAQ:EWBC) declared a $0.48 per share quarterly dividend, a 20% increase from its prior dividend of $0.40. The dividend was distributed to shareholders on February 21. 

On January 27, Truist analyst Jennifer Demba raised the firm’s price target on East West Bancorp, Inc. (NASDAQ:EWBC) to $85 from $77 and reiterated a Buy rating on the shares after its Q4 earnings beat. The analyst noted that the company’s higher net interest income was partially offset by lower fee income, higher expenses, and higher provisioning. Additionally, the firm expressed its encouragement with East West Bancorp, Inc. (NASDAQ:EWBC)’s continued positive credit quality trends and finds the stock’s valuation of 7.9-times expected forward earnings to be “attractive”.

According to Insider Monkey’s Q3 data, 33 hedge funds were bullish on East West Bancorp, Inc. (NASDAQ:EWBC), compared to 35 funds in the prior quarter. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with 1.05 million shares worth $70.75 million. 

Here is what Aristotle Capital Management Value Equity has to say about East West Bancorp, Inc. (NASDAQ:EWBC) in its Q1 2022 investor letter:

“We purchased East West Bancorp in the third quarter of 2017; however, our history with the business stretches back further having twice previously invested. Companies we consider to be high-quality like East West tend to remain high quality, and we have long admired the business for its uniqueness among the otherwise homogeneous U.S. banking industry. Its dominant market share built over generations in Asian communities – and difficult-to-replicate experience due to culture, geography and business practices – create distinct competitive advantages in our view. During our most recent holding period, the bank achieved sustained loan growth, a catalyst we identified, through its continued leadership position as the financial “bridge” for customers doing business in the U.S. and China. Moreover, East West also realized market share gains in its headquarters state of California. With these catalysts nearing completion, we decided to exit our investment to fund the purchase of Oshkosh. As always, we will continue to study East West and, in the future, may once again find an opportunity to be investors.”

4. S&P Global Inc. (NYSE:SPGI)

Number of Hedge Fund Holders: 90

Quarterly Revenue Growth YoY as of December 30, 2022: 40.70%

S&P Global Inc. (NYSE:SPGI) is a New York-based company that offers credit ratings, benchmarks, analytics, and workflow solutions globally. It operates through six segments – S&P Global Ratings, S&P Dow Jones Indices, S&P Global Commodity Insights, S&P Global Market Intelligence, S&P Global Mobility, and S&P Global Engineering Solutions. On January 25, S&P Global Inc. (NYSE:SPGI) declared a $0.90 per share quarterly dividend, a 5.9% increase from its prior dividend of $0.85. The dividend is payable on March 10, to shareholders of record on February 24. 

On February 13, Argus analyst John Eade increased the price target on S&P Global Inc. (NYSE:SPGI)’s shares from $380 to $400 and maintained a Buy rating. The company’s performance has been better than the market in the past quarter, and the analyst believes that the double-digit earnings growth rate will return this year. 

According to Insider Monkey’s third quarter database, 90 hedge funds were long S&P Global Inc. (NYSE:SPGI), compared to 84 funds in the prior quarter. Chris Hohn’s TCI Fund Management is the largest stakeholder of the company, with 8.7 million shares worth $2.6 billion. 

Andvari Associates made the following comment about S&P Global Inc. (NYSE:SPGI) in its Q4 2022 investor letter:

“S&P Global Inc. (NYSE:SPGI) is another company we own that is part of a duopoly in the business of credit rating. S&P and Moody’s have roughly equal market shares and rate more than 90% of all bonds worldwide. The service provides high value for the cost. A company that chooses to issue debt without a rating will pay an interest rate that could be higher by half of a percent. The cost of a higher interest rate far exceeds any savings gained by not using the services of S&P.

We think of S&P as a toll road that earns fees from its customers in exchange for cost-effective access to capital. As such, the company has extraordinary margins and pricing power and requires little of its own capital to grow. Even after fully reinvesting in its business, S&P still has an excess of cash. In 2021, S&P produced $3.5 billion of free cash from $8.3 billion of revenues. The company returns the majority of its free cash to investors in the form of dividends and share repurchases.”

3. NatWest Group plc (NYSE:NWG)

Number of Hedge Fund Holders: 7

Quarterly Revenue Growth YoY as of December 30, 2022: 42.7%

NatWest Group plc (NYSE:NWG) was founded in 1727 and is headquartered in Edinburgh, the United Kingdom. It provides banking and financial products and services to personal, commercial, corporate, and institutional customers in the United Kingdom and internationally. It operates through Retail Banking, Private Banking, Commercial & Institutional segments. NatWest Group plc (NYSE:NWG)’s total income of £3.71 billion climbed 42.7% on a year-over-year basis. 

Aman Rakkar, an analyst at Barclays, downgraded NatWest Group plc (NYSE:NWG) from Overweight to Equal Weight and set a price target of 400 GBp on February 6. The analyst believes that there are potential long-term risks associated with the bank’s liquidity unwind and deposit outflows. The analyst expressed concern that these factors could lead to “over-earning” issues.

According to Insider Monkey’s third quarter database, 7 hedge funds were bullish on NatWest Group plc (NYSE:NWG), compared to 10 funds in the prior quarter. Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital is the leading stakeholder of the company, with 3.34 million shares worth $16.6 million. 

Here is what Artisan Partners has to say about NatWest Group plc (NYSE:NWG) in its Q2 2021 investor letter:

“It is worth discussing two positions that we sold, (which includes) Natwest Group. Natwest, a majority state-owned British banking and insurance firm, was one of the worst investments we’ve ever made.

Natwest Group was purchased in 2013. Since that initial purchase, the investment’s total return was negative 44% and the largest negative contribution to performance. Over the same time period, the MSCI EAFE Index has increased by 79%. It is important to consider the return of the index, as the damage done by your manager must include both the 44% loss and the opportunity cost of owning an average stock…” (Click here to see the full text)

2. Bank of Montreal (NYSE:BMO)

Number of Hedge Fund Holders: 9

Quarterly Revenue Growth YoY as of December 30, 2022: 54.80%

Bank of Montreal (NYSE:BMO) was founded in 1817 and is headquartered in Montreal, Canada. It provides diversified financial services primarily in North America. On January 24, Bank of Montreal (NYSE:BMO) announced a C$650 million domestic institutional non-viability contingent capital (NVCC) preferred stock offering. The bank is going to sell class B preferred shares, series 52 with a fixed rate for five years, which are not cumulative and can be reset. The shares will only be available to specific institutional investors, and the price per share will be $1,000.

On February 7, Desjardins analyst Doug Young raised the firm’s price target on Bank of Montreal (NYSE:BMO) to C$146 from C$143 and maintained a Buy rating on the shares.

According to Insider Monkey’s third quarter database, 9 hedge funds were bullish on Bank of Montreal (NYSE:BMO). It is one of the top high growth financial stocks to monitor, with quarterly year-over-year revenue growth of 54.80% as of the end of December 2022. 

1. M&T Bank Corporation (NYSE:MTB)

Number of Hedge Fund Holders: 44

Quarterly Revenue Growth YoY as of December 30, 2022: 66.2%

M&T Bank Corporation (NYSE:MTB) is a New York-based bank holding company that provides commercial and retail banking services. With quarterly year-over-year revenue growth of 66.2% as of the end of December 2022, M&T Bank Corporation (NYSE:MTB) is one of the premier high growth financial stocks to invest in. 

According to Deutsche Bank analyst Matt O’Connor, the price target for M&T Bank Corporation (NYSE:MTB) has been decreased from $255 to $175, while the Buy rating on the shares remains unchanged as of January 6. The analyst expects that the U.S. bank stocks will experience new lows, and predicts that bank stocks will trade below their usual historical range of 60% to 80%. O’Connor believes that the bank earnings might have peaked, which could cause some downside risk due to the reserve build and valuations in case of a recession.

According to Insider Monkey’s third quarter database, Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 1.48 million shares worth $261.7 million. 

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