RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. During the third quarter, the markets performed strongly with the Russell 1000 Growth Index (RLG) and the S&P 500 index returning 3.19% and 5.89% respectively and RPX returning 3.73%. A weaker-than-expected jobs report that raised fears of a coming recession caused the RLG to drop 8.8% from the end of June to the fifth of August, giving the quarter a rocky start. As China passed a significant stimulus package and the Fed began its rate-cutting cycle with a 0.50% decrease to a goal of 4.75%-5.00%, those losses quickly reversed. In addition, please check the fund’s top five holdings to know its best picks in 2024.
RiverPark Large Growth Fund highlighted stocks like The Charles Schwab Corporation (NYSE:SCHW) in the third quarter 2024 investor letter. The Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company that offers wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The one-month return of The Charles Schwab Corporation (NYSE:SCHW) was -4.60%, and its shares gained 14.36% of their value over the last 52 weeks. On December 17, 2024, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $76.76 per share with a market capitalization of $140.514 billion.
RiverPark Large Growth Fund stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its Q3 2024 investor letter:
“The Charles Schwab Corporation (NYSE:SCHW): SCHW was a top detractor in the third quarter following an uneven second quarter earnings report. After two quarters of stabilization of client deposits and continued reduction of short-term high-cost funding, both metrics reversed in the second quarter causing the company to lower near term EPS expectations. Client deposit accounts, though no longer materially impacted by cash sorting (clients moving cash to higher yielding instruments), declined more than expected as clients used this cash to pay taxes. Lower than expected deposits in turn limited SCHW’s ability to continue to pay down higher cost funding sources ultimately leading to lower spread income. While near term EPS expectations were lowered, we believe that 1) higher spreads should still materialize even if delayed and 2) client assets in the aggregate continue to grow at a healthy pace driven by market gains and organic growth.
Schwab has been the leading share gainer in the discount brokerage industry over the last decade, generating substantial organic asset growth while also growing operating margins and remaining amongst the price leader on all products. Revenue should continue to accelerate in the coming quarters as lower interest-bearing assets mature, which will allow the company to pay back higher cost short-term funding and invest at higher prevailing rates. We believe the company has emerged from the mini bank crisis of 2023 in an even stronger position to gather assets and drive long-term margins and free cash flow in the years to come.”
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The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 74 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter which was 72 in the previous quarter. The third quarter revenue of The Charles Schwab Corporation (NYSE:SCHW) increased 5% year-over-year to $4.8 billion. While we acknowledge the potential of The Charles Schwab Corporation (NYSE:SCHW) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed The Charles Schwab Corporation (NYSE:SCHW) and shared Broyhill Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q3 2024 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.