The Charles Schwab Corporation (SCHW) Benefited From Interest Rate Hikes

Giverny Capital, an investment management company, recently published its fourth-quarter investor letter in 2022. A copy of the same can be downloaded here. The model portfolio of the firm appreciated 8.49%, net of fees in the fourth quarter compared to a 7.56% return for the Standard & Poor’s 500 Index. For 2022, the fund delivered a -22.65% return compared to a -18.11% return for the Index. Oil and energy was the strongest sector in the year increased by 65%. In addition, you can check the top 5 holdings of the fund to see its best picks for 2022.

Giverny Capital highlighted stocks like The Charles Schwab Corporation (NYSE:SCHW) in its Q4 2022 investor letter. Headquartered in Westlake, Texas, The Charles Schwab Corporation (NYSE:SCHW) is a financial services company. On January 26, 2023, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $78.05 per share. One-month return of The Charles Schwab Corporation (NYSE:SCHW) was -6.26%, and its shares lost 12.21% of their value over the last 52 weeks. The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $145.699 billion.

Giverny Capital made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q4 2022 investor letter:

“The Charles Schwab Corporation (NYSE:SCHW) was our second-largest holding at year-end. Schwab earns most of its income on the spread between the paltry rate it pays brokerage customers for cash they hold in their accounts and the rate it can earn investing that cash. As rates rose this year, so did Schwab’s profit. It recently announced that earnings per share rose 20% for 2022, to $3.90. For 2023, earnings likely will grow another 20% or so. Despite this, shares declined 1% for the year, as evidently this result did not meet Mr. Market’s lofty expectation. I’m encouraged about Schwab’s long-term prospects: It added four million new brokerage accounts in 2022, up 13%. Schwab has an industry leading cost position and enjoys investor trust, a vital competitive advantage in any financial business. The shares trade for about the market multiple.”

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The Charles Schwab Corporation (NYSE:SCHW) is not on our 30 Most Popular Stocks Among Hedge Funds list. As per our database, 75 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter, and 68 in the previous quarter.

We discussed The Charles Schwab Corporation (NYSE:SCHW) in another article and shared the best holding company stocks to invest in. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.

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