In this article, we discuss 5 large-cap stocks to buy for a starter stock portfolio. If you want to see more stocks in this selection, check out Starter Stock Portfolio: 12 Large-Cap Stocks To Buy.
5. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 68
The Charles Schwab Corporation (NYSE:SCHW) is an American multinational company that provides wealth management, securities brokerage, banking, asset management, and financial advisory services. The Charles Schwab Corporation (NYSE:SCHW)’s Q3 earnings and revenue outperformed Wall Street expectations, as resilient growth in net interest revenue and record retail inflows offset a drop in asset management fees and trading revenue. The Charles Schwab Corporation (NYSE:SCHW) is one of the best large-cap stocks to buy for a starter portfolio.
On October 18, Deutsche Bank analyst Brian Bedell said The Charles Schwab Corporation (NYSE:SCHW) posted “solid’ Q3 results and he sees the 2% stock selloff on cash sorting fears as being overblown. The selloff is a buying opportunity, said the analyst, who reiterated a Buy rating on the shares.
According to Insider Monkey’s data, 68 hedge funds were bullish on The Charles Schwab Corporation (NYSE:SCHW) at the end of Q2 2022, compared to 78 funds in the prior quarter. Harris Associates is the leading position holder in the company, with 12.7 million shares worth $804.6 million.
Here is what IP Capital Partners has to say about The Charles Schwab Corporation (NYSE:SCHW) in its Q2 2022 investor letter:
“When we wrote about Charles Schwab in the end-2019 management report, the company managed around $5.5 trillion and had 24.4 million customers when added to the recently acquired TD Ameritrade. A little more than two years later, at the end of the first quarter of 2022, assets under custody jumped to US$ 7.9 trillion and total customers reached 33.6 million, an increase of 44% and 37%, respectively. Of the increase in managed assets, US$ 1 trillion came from funding and US$ 1.4 trillion from the appreciation of the stock of assets. No other financial institution in the world attracted more individual customers than Schwab during this period.
From a revenue point of view, two important effects have occurred in the last two years – and that should be reversed from now on. In terms of trading revenues (about 20% of the total), the company benefited from a period of increased customer activity. In the results of financial intermediation (about 50% of the total), the company suffered from the low interest rate scenario…” (Click here to see the full text)
4. ConocoPhillips (NYSE:COP)
Number of Hedge Fund Holders: 71
ConocoPhillips (NYSE:COP), a Texas-based provider of crude oil, bitumen, natural gas, liquefied natural gas, and natural gas liquids, is one of the premier large-cap stocks to buy. On October 19, Barclays analyst Jeanine Wai maintained an Overweight rating on ConocoPhillips (NYSE:COP) but lowered the price target on the shares to $135 from $153 ahead of the Q3 results.
According to the second quarter database of Insider Monkey, 71 hedge funds held stakes worth $2.4 billion in ConocoPhillips (NYSE:COP), compared to 67 funds in the prior quarter worth $2.6 billion. Ken Fisher’s Fisher Asset Management is the biggest position holder in the company, with 6.76 million shares valued at $607.2 million.
Diamond Hill Capital mentioned ConocoPhillips (NYSE:COP) in its Q1 2022 investor letter. Here is what the firm had to say:
“We redeployed capital into ConocoPhillips (NYSE:COP), which was trading at a discount to our estimate of intrinsic value and is well positioned over the long run due to its low-risk asset base.”
3. Comcast Corporation (NASDAQ:CMCSA)
Number of Hedge Fund Holders: 75
Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based media and technology company that operates through Cable Communications, Media, Studios, Theme Parks, and Sky segments. On July 28, Comcast Corporation (NASDAQ:CMCSA) declared a $0.27 per share quarterly dividend, in line with previous. The dividend is payable on October 26, to shareholders of record on October 5. The company delivers a dividend yield of 3.51% as of October 19.
Deutsche Bank analyst Bryan Kraft on October 19 reiterated a Buy recommendation on Comcast Corporation (NASDAQ:CMCSA) but trimmed the firm’s price target on the shares to $50 from $54 ahead of the Q3 results.
According to Insider Monkey’s database, Comcast Corporation (NASDAQ:CMCSA) was part of 75 hedge fund portfolios at the end of the second quarter of 2022, compared to 78 in the last quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the leading shareholder of the company, with 30.30 million shares worth $1.2 billion.
Here is what Mawer Investment Management has to say about Comcast Corporation (NASDAQ:CMCSA) in its Q3 2022 investor letter:
“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Comcast (NASDAQ:CMCSA) have been impacted as wireless operators are spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”
2. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 83
Wells Fargo & Company (NYSE:WFC), an American multinational financial services company, features as one of the best large-cap stocks to consider for a starter stock portfolio. Wells Fargo & Company (NYSE:WFC)’s Q3 earnings topped Wall Street expectations as the company benefited from rising interest rates and prioritized expense management.
On October 17, Piper Sandler analyst R. Scott Siefers raised the price target on Wells Fargo & Company (NYSE:WFC) to $49 from $48 and maintained an Overweight rating on the shares following the Q3 results. The analyst saw “some encouraging but admittedly mixed trends” in the Q3 report.
According to Insider Monkey’s second quarter database, 83 hedge funds were long Wells Fargo & Company (NYSE:WFC), compared to 93 funds in the earlier quarter. Boykin Curry’s Eagle Capital Management is the biggest stakeholder of the company, with more than 18 million shares worth $709.3 million.
Here is what Oakmark Funds specifically said about Wells Fargo & Company (NYSE:WFC) in its Q3 2022 investor letter:
“Wells Fargo & Company (NYSE:WFC) has been a long-time holding in the Oakmark Fund. Despite the positives of higher interest rates and the company making good progress on reducing expenses and regulatory consent orders, Wells Fargo shares have fallen one-third from their highs earlier this year to roughly 6.5x our estimate of normalized earnings power, and the stock ended the quarter at ~1x next year’s tangible book value. We find this is far too cheap for a strong banking franchise capable of tangible returns in the low-to-mid teens across business cycles.”
1. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 96
T-Mobile US, Inc. (NASDAQ:TMUS) provides mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. On September 26, Assurant, Inc. (NYSE:AIZ) announced a multi-year extension of its long-term partnership with T-Mobile US, Inc. (NASDAQ:TMUS) to continue offering comprehensive mobile device protection solutions. It is one of the best large-cap plays for a starter stock portfolio.
On October 17, Credit Suisse analyst Douglas Mitchelson reiterated an Outperform rating on T-Mobile US, Inc. (NASDAQ:TMUS) but lowered the price target on the shares to $175 from $188 ahead of Q3 results as high interest rates drive a greater cost of capital. The analyst continues to be confident in the second half of 2022, and trends still demonstrate conservatism for management’s forward year guides.
Among the hedge funds tracked by Insider Monkey, 96 hedge funds were long T-Mobile US, Inc. (NASDAQ:TMUS) at the end of June 2022, up from 91 funds in the preceding quarter. Andreas Halvorsen’s Viking Global is the largest stakeholder of the company, with 9.17 million shares worth $1.2 billion.
In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc. (NASDAQ:TMUS):
“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”
You can also take a look at 12 Best Undervalued Stocks To Invest In and 11 Best Dividend Aristocrats With High Yields.
