In this article, we discuss the top 5 financial stocks to invest in. If you wish to see our detailed analysis of these stocks, go directly to the Top 10 Financial Stocks To Invest In.
5. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 94
Wells Fargo & Company (NYSE:WFC) is a financial services company that provides a range of products and services, including banking, insurance, mortgage and leasing services, among numerous others. The company rebuilt its mobile banking experience for consumer and small business customers, with an all-new virtual assistant, Fargo, to be added later in 2022.
On October 15, Piper Sandler analyst Scott Siefers raised his price target on Wells Fargo & Company (NYSE:WFC) to $48 from $45, and kept a Neutral rating on the shares.
At the end of the second quarter of 2021, 94 hedge funds in the database of Insider Monkey held stakes worth $7 billion in Wells Fargo & Company (NYSE:WFC), down from 96 in the previous quarter worth $7.4 billion. Out of the hedge funds being tracked by Insider Monkey, Boykin Curry’s Eagle Capital Management is the leading stakeholder in the company, holding over 34.9 million shares worth more than $1.58 billion.
L1 Capital, in its second-quarter 2021 investor letter, mentioned Wells Fargo & Company (NYSE:WFC). Here is what the fund said:
“Wells Fargo (Long +16%) was the strongest contributor to portfolio performance over the quarter. Wells Fargo shares rallied given a better outlook for bad debts driven by improving employment and house price trends. The company had been very undervalued due to excessive fears around likely bad debts due to the pandemic, the continued regulatory “asset cap” (a punishment that was put in place in 2017 for numerous compliance failures) and an inability to commence buybacks. The share price has subsequently recovered strongly in recent months as the company has progressed its turnaround program under the leadership of the well-regarded CEO, Charles Scharf (former CEO of Visa and BNY Mellon). Wells Fargo is now closer to getting the asset cap lifted and has announced a huge cost out program (US$8b+) as well as an $18b buyback program to be completed over the next 12 months. Wells Fargo shares have rallied more than 50% since we initiated the position in late 2020. Given the strong rally, we elected to exit our position and rotate into stocks with larger valuation upside.”
4. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 108
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based multinational financial services and investment banking corporation that provides financial advisory services and solutions to countries around the world. Earlier on October 22, the company announced the launch of Digital Bill Payment, a platform based around customer engagement, bill presentment and payments.
Of the 873 elite funds tracked by Insider Monkey, 108 were long in JPMorgan Chase & Co. (NYSE:JPM) at the end of June, compared to 111 in the first quarter of 2021. Ken Fisher’s Fisher Asset Management is a leading shareholder in the company.
On October 25, Wells Fargo analyst Mike Mayo raised the price target on JPMorgan Chase & Co. (NYSE:JPM) to $210 from $200, and maintained an Overweight rating on the shares, citing confidence in the company’s earnings capacity and consistency.
3. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 143
PayPal Holdings, Inc. (NASDAQ:PYPL) is a multinational financial technology company that operates an online payments system in a number of countries that support online money transfers, as well as serves as an electronic alternative to traditional paper methods such as checks and money orders.
After the it announced that it would not pursue an acquisition of Pinterest, Inc.(NYSE:PINS) on October 25, the company’s shares jumped by 6%.
On October 20, Keefe Bruyette analyst Sanjay Sakhrani maintained an Outperform rating on PayPal Holdings, Inc. (NASDAQ:PYPL), alongside a $340 price target on its shares,
At the end of the second quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $16.3 billion in PayPal Holdings, Inc. (NASDAQ:PYPL). The number of hedge funds with stakes in the company remained unchanged for the first and second quarter. Alexander Becker of Codex Capital is the leading shareholder in the company, with 32,900 shares worth more than $9.59 billion.
Qualivian Investment Partners mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) in their Q2 2021 investor letter and discussed its stance on the firm. Here’s what the fund said:
“PayPal: The company reported a slightly disappointing quarter with revenues growing 19%, missing on the average revenue per transaction due to the accelerated decline in eBay transactions, the higher mix of Braintree transactions, and other impacts from hedging and F/X translations. Given the stock’s significant outperformance in 2020 and heightened expectations coming into the quarter, the stock has been consolidating since the earnings report. Long term we remain bullish on PayPal, given the company’s continued growth in eCommerce end markets, as well as the continued share gains of digital payments/wallets over paper payments.”
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE:MA) is a New York-based multinational financial services company that engages in the provision of transaction processing and other payment-related products and services.
Warren Buffett’s Berkshire Hathaway is one of the biggest stakeholders of Mastercard Incorporated (NYSE:MA) as of the end of the second quarter, according to the data tracked by Insider Monkey. Overall, 156 funds were bullish on Mastercard Incorporated (NYSE:MA) by the end of the June quarter, compared to 154 in the preceding quarter.
On August 17, JPMorgan analyst Tien-tsin Huang raised the price target on Mastercard Incorporated (NYSE:MA) to $430 from $427, and kept an Overweight rating on the shares of the company.
Qualivian Investment Partners, in its Q2 2021 investor letter, mentioned Mastercard Incorporated (NYSE:MA). Here is what the firm has to say about the company:
“Mastercard: Q2 revenue and EPS beat consensus estimates by 3.7% and 12% respectively. Operating margins also beat consensus by +240 bps. Gross domestic volume growth of +38.3% (+32.8% in constant currency) was buttressed by continued e-commerce strength and better in-store performance, while purchase volumes grew 41.8% (35.5% in constant currency). Cross border performance was strong, but durability remains uncertain given uncertainty arising from the Delta variant and its impact on travel and tourism. We believe Mastercard has a robust runway for growth given further travel recovery, new/existing partnerships, traction in digital payments, and ongoing economic recovery.”
1. Visa, Inc. (NYSE:V)
Number of Hedge Fund Holders: 162
Visa, Inc. (NYSE:V) is a California-based multinational financial services company engaged in the provision of electronic funds transfer across the globe.
As of the end of the second quarter, 162 hedge funds tracked by Insider Monkey reported owning stakes in Visa, Inc. (NYSE:V). The total worth of these stakes is $27.6 billion. This is compared to 164 funds that had stakes in the company in the previous quarter, with a total worth of $26.5 billion. Alexander Becker of Codex Capital is the leading stakeholder of the company.
On October 28, Morgan Stanley analyst James Faucette kept an Overweight rating and $280 price target on Visa, Inc. (NYSE:V) shares.
In its Q1 2021 investor letter, ClearBridge Investments mentioned Visa Inc. (NYSE:V). Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
You can also take a look at 11 Best Dividend Aristocrats with over 3% Yield and Growth Stock Portfolio: 10 Stock Picks By Hedge Funds.
