Ken Fisher Strategy: 5 New Stock Picks

1. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Holders: 68

Fisher Asset Management’s Stake Value: $1,109,194,000

The Charles Schwab Corporation (NYSE:SCHW) is an American multinational financial services company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. In Q3 2022, Ken Fisher acquired a stake in The Charles Schwab Corporation (NYSE:SCHW) by purchasing 15.4 million shares worth $1.10 billion, representing 0.83% of the total securities. 

On October 26, The Charles Schwab Corporation (NYSE:SCHW) declared a quarterly dividend of $0.22 per share, in line with previous. The dividend is payable on November 25, to shareholders of record on November 11. 

Deutsche Bank analyst Brian Bedell on November 14 raised the price target on The Charles Schwab Corporation (NYSE:SCHW) to $101 from $100 and kept a Buy rating on the shares. The analyst updated estimates and price targets midway through Q4 for the brokers, asset managers, and exchanges. The sector has a “mostly upward bias” given the robust equity market rebound in Q4 so far, the analyst told investors in a research note. 

Among the hedge funds tracked by Insider Monkey, 68 funds reported owning stakes worth $4.5 billion in The Charles Schwab Corporation (NYSE:SCHW) at the end of Q2 2022, compared to 78 funds in the prior quarter worth $5.5 billion. Harris Associates held the biggest stake in the company, comprising 12.7 million shares valued at $804.6 million. 

LVS Advisory made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q3 2022 investor letter:

“We purchased shares of The Charles Schwab Corporation (NYSE:SCHW) around the same time as Interactive Brokers. The investment thesis is similar. Schwab benefits from higher interest rates as it collects income earned from client cash. While IBKR mostly serves retail investors, Schwab has a greater emphasis on wealth advisors and corporate retirement plans. B2B channels are stickier than retail traders and give Schwab pricing power to collect a greater portion of the interest earned than IBKR. Schwab is a more mature business and has fewer reinvestment opportunities than IBKR (which is why I prefer IBKR on the margin); however, Schwab has authorized a massive $15 billion share buyback program (!) representing over 10% of the company’s market cap at the time of announcement. Given that Schwab trades for a mid-teens price-to-earnings multiple and has a low cost of capital, the share buyback should be highly accretive. The combined tailwind from higher interest rates and the buyback program will lead to attractive earnings per share growth over the coming years.”

You can also take a look at 11 Best Materials Dividend Stocks To Buy and Dividend Kings List By Yield. 

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