Is Charles Schwab (SCHW) A Smart Long-Term Buy?

Ariel Investments, an investment management firm, published its “Ariel Fund & Ariel Appreciation Fund” third-quarter 2021 investor letter – a copy of which can be downloaded here. A return of -0.17% was recorded by the Fund for the third quarter of 2021, compared to the Russell 2500TM Value Index, Russell 2500TM Index, and S&P 500® Index which had a -2.07%, -2.68%, and 0.58% returns respectively for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Ariel Fund & Ariel Appreciation Fund, in its Q3 2021 investor letter, mentioned The Charles Schwab Corporation (NYSE: SCHW) and discussed its stance on the firm. The Charles Schwab Corporation is a Westlake, Texas-based financial services company with a $154.2 billion market capitalization. SCHW delivered a 53.85% return since the beginning of the year, while its 12-month returns are up by 57.89%. The stock closed at $81.60 per share on December 15, 2021.

Here is what Ariel Fund & Ariel Appreciation Fund has to say about The Charles Schwab Corporation  in its Q3 2021 investor letter:

“Additionally, financial services provider Charles Schwab Corporation (SCHW) was another strong performer in the period. Management has made progress increasing new and existing customer engagement through its multichannel approach and low-cost, high value product offerings—bolstering the company’s competitive positioning. Elevated interest rate expectations have been another driver of performance as SCHW reinvests deposits in securities and earns a spread. In our view, SCHW has the ability to weather various macro-economic and competitive pressures by flexing its scale and customercentric focus in support of the company’s industry leading cost advantage. We also believe the TD Ameritrade acquisition will create incremental value and further enhance SCHW’s market place standing and long-term growth trajectory.”

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Based on our calculations, The Charles Schwab Corporation (NYSE: SCHW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. SCHW was in 8 hedge fund portfolios at the end of the third quarter of 2021, compared to 7 funds in the previous quarter. The Charles Schwab Corporation (NYSE: SCHW) delivered a 14.69% return in the past 3 months.

Earlier this year, we also shared another hedge fund’s views on SCHW in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

Disclosure: None. This article is originally published at Insider Monkey.