Markets

Insider Trading

Hedge Funds

Retirement

Opinion

Should You Expect Strong Earnings Growth for Charles Schwab Corp. (SCHW)?

Fiduciary Management Inc. (FMI), an independent money management firm, released its first quarter 2024 investor letter. A copy of the same can be downloaded here. The first quarter of this year saw the continuation of last year’s stock market momentum, with growth stocks leading the way across market capitalization and geographical areas. The Small Cap Strategy rose 9.2% (gross) / 9.0% (net), in the quarter compared to 5.18% and 2.90% for the Russell 2000 Index and Russell 2000 Value Index. FMI Large Cap Strategy gained 8.7% (gross) / 8.6% (net) compared with 10.56% and 8.86% for the S&P 500 and iShares Russell 1000 Value ETF, respectively. The FMI All Cap Equity advanced 7.4% (gross) / 7.3% (net), compared with 9.89% for the iShares Russell 3000 ETF. Finally, the FMI International Strategies gained 5.8% (gross) / 5.7% (net) on a currency-hedged basis and 3.6% (gross) / 3.4% (net) on a currency-unhedged basis. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Fiduciary Management featured stocks like The Charles Schwab Corporation (NYSE:SCHW) in the first quarter 2024 investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company. On April 16, 2024, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $73.07 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was 4.88%, and its shares gained 31.54% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $ 133.495 billion.

Fiduciary Management stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its first quarter 2024 investor letter:

“We last wrote about The Charles Schwab Corporation (NYSE:SCHW) a year ago in the midst of the banking crisis. At the time, the worst fears were a bank run and/ or balance sheet impairment. Positively, these did not come to pass. As a refresh of our interest in the business, Charles Schwab is a leading discount broker. The business benefits from long run market appreciation and Schwab’s better mousetrap has allowed it to gain share on top of market growth, which has driven long run revenue growth of 10%. The competitive advantage comes from shared economies of scale, whereby Schwab lowers costs to the customer, thereby attracting new assets which then lets them lower costs even more to the customer. The rapid rise in interest rates that precipitated the banking crisis contributed to a challenging last 18 months for Schwab, as clients moved bank cash to higher yielding instruments. This led to a significant, albeit short-term, earnings headwind. As we move into 2024, we believe the worst is behind them. We expect Schwab will experience strong earnings growth for the next few years, driven by accelerating revenue growth and renewed expense discipline. Despite this attractive outlook, Schwab trades for 21 times trough earnings and only 14 times our estimate of normalized earnings.”

Photo by Brendan Church on Unsplash

The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, The Charles Schwab Corporation (NYSE:SCHW) was held by 81 hedge fund portfolios, up from 77 in the previous quarter, according to our database.

We previously discussed The Charles Schwab Corporation (NYSE:SCHW) in another article, where we shared the list of stocks billionaire investor Stan Druckenmiller and insiders are piling into. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

Suggested Articles:

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

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

I’ve compiled everything you need to know about this groundbreaking company in a detailed, members-only report.

Trust me — you’ll want to read this report before putting another dollar into any tech stock.

For a ridiculously low price of just $9.99 a month, you can unlock a year’s worth of in-depth investment research and exclusive insights – that’s less than a single fast food meal!

Here’s why this is a deal you can’t afford to pass up:

• Access to our Detailed Report on this Game-Changing AI Stock: Our in-depth report dives deep into our #1 AI stock’s groundbreaking technology and massive growth potential.

• 11 New Issues of Our Premium Readership Newsletter: You will also receive 11 new issues and at least one new stock pick per month from our monthly newsletter’s portfolio over the next 12 months. These stocks are handpicked by our research director, Dr. Inan Dogan.

• One free upcoming issue of our 70+ page Quarterly Newsletter: A value of $149

• Bonus Reports: Premium access to members-only fund manager video interviews

• Ad-Free Browsing: Enjoy a year of investment research free from distracting banner and pop-up ads, allowing you to focus on uncovering the next big opportunity.

• 30-Day Money-Back Guarantee:  If you’re not absolutely satisfied with our service, we’ll provide a full refund within 30 days, no questions asked.

If you’re thinking about getting in, don’t wait – because once Wall Street catches wind of this story, the easy money will be gone.

Space is Limited! Only 1000 spots are available for this exclusive offer. Don’t let this chance slip away – subscribe to our Premium Readership Newsletter today and unlock the potential for a life-changing investment.

Here’s what to do next:

1. Head over to our website and subscribe to our Premium Readership Newsletter for just $9.99 a month.

2. Enjoy a year of ad-free browsing, exclusive access to our in-depth report on the revolutionary AI company, and the upcoming issues of our Premium Readership Newsletter over the next 12 months.

3. Sit back, relax, and know that you’re backed by our ironclad 30-day money-back guarantee.

Don’t miss out on this incredible opportunity! Subscribe now and take control of your AI investment future!

No worries about auto-renewals! Our 30-Day Money-Back Guarantee applies whether you’re joining us for the first time or renewing your subscription a month later!