In this article, we discuss 5 financial stocks that Warren Buffett is buying in 2022. If you want to see more financial stock picks of the billionaire, click Warren Buffett is Buying and Holding These 10 Financial Stocks in 2022.
5. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 142
Visa Inc. (NYSE:V), the American multinational payments technology firm, has been part of the Berkshire Hathaway portfolio since Q3 2011. The hedge fund disclosed a $1.84 billion Visa Inc. (NYSE:V) stake in the regulatory filings for the first quarter of 2022. Visa Inc. (NYSE:V) reported above consensus earnings for Q1 on April 26, with an EPS of $1.79 and a revenue of $7.19 billion.
On May 17, Goldman Sachs analyst Will Nance initiated coverage of Visa Inc. (NYSE:V) with a Buy rating and a $282 price target, implying 43% upside. The analyst also added Visa Inc. (NYSE:V) to the firm’s Americas Conviction List. He sees the company as the global leader in payments with “attractive leverage to the long-term secular growth driver from payment electronification”.
According to Insider Monkey’s Q4 data, 142 hedge funds reported owning long positions in Visa Inc. (NYSE:V), with combined stakes amounting to $29.2 billion. In the first quarter of 2022, Chris Hohn’s TCI Fund Management was one of the leading stakeholders of the company, with almost 20 million shares worth $4.4 billion.
Here is what Baron Durable Advantage Fund has to say about Visa Inc. (NYSE:V) in its Q1 2022 investor letter:
“Shares of global payment network Visa, Inc. (NYSE:V) were up 2.5% on strong quarterly results with 24% revenue growth and 27% EPS growth. Payment volume grew 20% with notable strength in cross-border volumes as travel activity rebounded from depressed levels. Management raised full-year guidance to reflect high-teens revenue growth. Shares also likely benefited from a “flight to safety” during a volatile quarter for equities. We continue to own the stock due to Visa’s long runway for growth underpinned by the continued migration from cash transactions to card/digital and strong competitive advantages, operating in a duopoly with Mastercard.”
4. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 144
Mastercard Incorporated (NYSE:MA) is one of the most notable finance stocks in the first quarter Berkshire portfolio, with the hedge fund holding close to 4 million shares of the company, worth $1.4 billion. Warren Buffett initially invested in Mastercard Incorporated (NYSE:MA) in the first quarter of 2011, and he has consistently held the stake over the years.
Mastercard Incorporated (NYSE:MA) posted its Q1 results on April 28, reporting earnings per share of $2.76, beating estimates by $0.60. The Q1 revenue of $5.17 billion grew 24.36% year-over-year, topping Street consensus by $267.59 million.
Goldman Sachs analyst Will Nance on May 17 initiated coverage of Mastercard Incorporated (NYSE:MA) with a Buy rating and a $460 price target, which implies 38% upside. After “lackluster returns in 2021 and a choppy start to 2022,” the analyst is “constructive” on the payments sector. He believes Mastercard Incorporated (NYSE:MA) will continue to offer “best-in-class” earnings growth, owing to strong secular tailwinds, robust operating leverage, and increased scalability.
In Q1 2022, Charles Akre’s Akre Capital Management disclosed a $2 billion stake in Mastercard Incorporated (NYSE:MA), making it one of the leading company shareholders. In the last quarter of 2021, 144 hedge funds were bullish on the stock.
Here is what Saturna Capital Amana Funds has to say about Mastercard Incorporated (NYSE:MA) in its Q4 2021 investor letter:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. We sold our position in Mastercard. Although Mastercard does not charge or collect interest, its association with credit activities was problematic.”
3. StoneCo Ltd. (NASDAQ:STNE)
Number of Hedge Fund Holders: 35
StoneCo Ltd. (NASDAQ:STNE) is a financial technology provider in Brazil, facilitating digital payments for businesses and merchants. Warren Buffet has held a StoneCo Ltd. (NASDAQ:STNE) stake since Q4 2018. In the first quarter of 2022, the billionaire owned 10.6 million shares of the company, worth $125.1 million.
Cantor Fitzgerald analyst Josh Siegler on April 8 initiated coverage of StoneCo Ltd. (NASDAQ:STNE) with an Overweight rating and a $15 price target. While the analyst believes Brazilian inflation will remain elevated in 2022, he thinks that StoneCo Ltd. (NASDAQ:STNE) stock has overcorrected, and feels the market may be discounting the company’s ability to control the expense impact through higher prepayment fees.
According to Insider Monkey’s data, D E Shaw held a prominent position in StoneCo Ltd. (NASDAQ:STNE) in the first quarter of 2022, with 5.4 million shares worth $64.2 million. In Q4 2021, 35 hedge funds were long StoneCo Ltd. (NASDAQ:STNE), with collective stakes valued at $829.5 million.
Here is what ClearBridge Investments Global Growth Strategy has to say about StoneCo Ltd. (NASDAQ:STNE) in its Q4 2021 investor letter:
“We also sold and trimmed several names in the emerging market and emerging growth areas, to manage risk and pursue growth companies with a better long-term risk/reward. These included Brazilian payments provider StoneCo. Having expected a rebound in their performance post a profit warning earlier in the year, rising interest rates in Brazil and investments in newly acquired companies increased operating costs and depressed earnings.”
2. Ally Financial Inc. (NYSE:ALLY)
Number of Hedge Fund Holders: 48
Ally Financial Inc. (NYSE:ALLY) is a Michigan-based digital financial services company, serving individual, commercial, and corporate customers in the United States and Canada. It operates through four segments – Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations.
Securities filings for Q1 2022 reveal that Ally Financial Inc. (NYSE:ALLY) is a new arrival in Warren Buffett’s Berkshire Hathaway portfolio, with the hedge fund buying close to 9 million shares worth almost $390 million.
Ally Financial Inc. (NYSE:ALLY) reported its Q1 results on April 14, posting earnings per share of $2.03, beating analysts’ predictions by $0.10. The $2.14 billion revenue also surpassed estimates by $2.97 million.
On April 18, Wells Fargo analyst Donald Fandetti reiterated an Overweight rating on Ally Financial Inc. (NYSE:ALLY) and lowered the price target on the shares to $50 from $57. The analyst noted that Ally Financial Inc. (NYSE:ALLY) reported Q1 adjusted EPS of $2.03, ahead of his $1.91 estimate and consensus of $1.93. Overall, the results were good and the company seems positioned to surpass the upper limit of its 16%-18%+ ROTCE guidance for the year, the analyst added.
In the first fiscal quarter of 2022, Harris Associates reported owning a $1.15 billion position in Ally Financial Inc. (NYSE:ALLY). In Q4 2021, 48 hedge funds were long Ally Financial Inc. (NYSE:ALLY), compared to 57 funds in Q3.
1. U.S. Bancorp (NYSE:USB)
Number of Hedge Fund Holders: 46
U.S. Bancorp (NYSE:USB) is a Minnesota-based financial services holding company, operating via Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments. U.S. Bancorp (NYSE:USB) has been part of the Berkshire portfolio since Q4 2010. In the first fiscal quarter of 2022, Warren Buffett’s fund held 126.4 million shares of U.S. Bancorp (NYSE:USB), worth $6.7 billion.
On April 14, U.S. Bancorp (NYSE:USB) reported its Q1 financial results, posting earnings per share of $0.99, beating analysts’ estimates by $0.05. The $5.57 billion revenue outperformed Street forecasts by $19.24 million.
Oppenheimer analyst Chris Kotowski on May 3 raised the firm’s price target on U.S. Bancorp (NYSE:USB) to $72 from $67 and kept an Outperform rating on the shares, citing loan growth and rising rates as positive catalysts even amid a recessionary environment.
According to Insider Monkey’s Q4 data, 46 funds were bullish on U.S. Bancorp (NYSE:USB), up from 42 funds in the last quarter. At the conclusion of Q1 2022, Jean-Marie Eveillard’s First Eagle Investment Management owned a prominent stake in the company, with 9.5 million shares worth $506.2 million.
Here is what ClearBridge Investments Dividend Strategy has to say about U.S. Bancorp (NYSE:USB) in its Q4 2021 investor letter:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We have increased our exposure to interest-rate sensitive banks by adding to existing positions in U.S. Bancorp.”
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