In this article, we discuss the 10 financial stocks to buy according to Jim Cramer. If you want to skip our detailed analysis of these stocks, go directly to the 5 Financial Stocks to Buy According to Jim Cramer.
Jim Cramer, the former hedge fund manager and present-day finance journalist, recently revealed that he had tested positive for COVID-19, showing the results of his test live on television while hosting Squawk on the Street on CNBC from his home office. Hundreds of thousands of fans, who adore Cramer for his investment insights, took to social media platforms to send well wishes to the investor.
Cramer has been especially bullish on the finance sector in recent weeks, giving stocks like PayPal Holdings, Inc. (NASDAQ:PYPL), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C), among others, Buy recommendations on his show. He has touted the power of technology, the possibility of a hike in interest rates, and blowout earnings despite a slowing economy as some of the reasons behind his constructive outlook on the sector. He advises people to buy stocks that trade on earnings and not future sales.
Our Methodology
These were picked keeping in mind the latest calls that Cramer made on these equities on his Mad Money show aired by news platform CNBC. Analyst ratings and business fundamentals of each company are discussed in detail below to provide readers with some context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey.
Sector Stocks to Buy According to Jim Cramer
10. BlackRock, Inc. (NYSE:BLK)
Number of Hedge Fund Holders: 44
BlackRock, Inc. (NYSE:BLK) operates as an investment manager. Jim Cramer gave the stock a Buy recommendation during the Discussed Stock segment of his show in early October.
Deutsche Bank analyst Brian Bedell recently raised the price target on BlackRock, Inc. (NYSE:BLK) stock to $1,141 from $1,024 and kept a Buy rating, noting that the overall outlook on finance stocks heading into 2022 was constructive given looming interest rate hikes.
At the end of the third quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $1 billion in BlackRock, Inc. (NYSE:BLK), compared to 47 the preceding quarter worth $1.2 billion.
Just like PayPal Holdings, Inc. (NASDAQ:PYPL), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C), BlackRock, Inc. (NYSE:BLK) is one of the stocks on the radar of elite investors.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and BlackRock, Inc. (NYSE:BLK) was one of them. Here is what the fund said:
“During the quarter, we initiated a position in BlackRock Inc., the world’s largest investment manager with $9 trillion in assets under management. BlackRock offers an array of products across equities, fixed income, alternatives, and cash management to institutional and retail investors worldwide. About one-quarter of BlackRock’s assets under management is actively managed, and the rest is in passive index funds and iShares-branded ETFs. The company offers technology services including the investment and risk management platform, Aladdin, as well as other advisory services and solutions. Over the five years ending December 31, 2020, assets under management and earnings per share grew at compound annual growth rates of 13% and 12%, respectively.
We believe BlackRock is well positioned for continued growth given its diverse product offering, global distribution, brand recognition, and capable management team. With most of its assets in index funds and ETFs, BlackRock is a prime beneficiary of the ongoing shift to passive investing. The company also benefits from increasing demand for sustainable investment strategies and “barbell” strategies that use a combination of low-cost index funds, active and illiquid alternatives products. BlackRock fits squarely within our Tech-Enabled Financials theme given its longstanding commitment to innovation and proprietary technology platform, Aladdin, which serves as the investment and risk management system for both BlackRock and a growing number of institutional investors around the world. We expect BlackRock’s earnings per share will continue to grow at a doubledigit annual rate over a market cycle through a combination of mid-single-digit growth in assets under management from net inflows, market appreciation, low to mid-teens revenue growth in technology services, modest margin expansion, and share repurchases.”
9. SVB Financial Group (NASDAQ:SIVB)
Number of Hedge Fund Holders: 45
The journalist investor spoke about SVB Financial Group (NASDAQ:SIVB), a diversified financial services company, during the Guest Interview round of Mad Money on December 13, giving it a Buy rating.
SVB Financial Group (NASDAQ:SIVB) recently announced that it had acquired MoffettNathanson LLC, an independent research firm, as part of a larger plan to invest in tech investment banking. MoffettNathanson focuses on media and communications research.
Among the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in SVB Financial Group (NASDAQ:SIVB) with 641,591 shares worth more than $415 million.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and SVB Financial Group (NASDAQ:SIVB) was one of them. Here is what the fund said:
“Among our top contributors was SVB Financial. SVB Financial Group is a leading provider of banking services to the innovation economy across the US and in key international markets. Headquartered in Silicon Valley, SVB offers financial products to clients in the technology, life science/health care and private equity/venture capital. Total client funds increased 51% to $243 billion in 2020—one of the company’s strongest years—as investors seek differentiated returns in innovative private companies. SVB’s high level of client service and long experience in the industry give it not only a historical data and knowledge advantage, but also a reputational edge. We believe this enables the company to quickly bring products to market and make speedy underwriting decisions. Given SVB’s strong profit growth comes at a time when net interest margins are depressed, we believe shares are priced attractively and added to our position.”
8. American Express Company (NYSE:AXP)
Number of Hedge Fund Holders: 57
American Express Company (NYSE:AXP) provides payments and travel-related services. It has been paying dividends for the last 32 years and recently declared a quarterly dividend of $0.43 per share, in line with previous. The forward yield was 1.02%.
On December 1, American Express Company (NYSE:AXP) stock was recommended as a Buy by the famed investor during the Discussed Stock segment of his show that airs on news platform CNBC.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in American Express Company (NYSE:AXP) with 15.6 million shares worth more than $2.6 billion.
In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and American Express Company (NYSE:AXP) was one of them. Here is what the fund said:
“In financials, American Express has done an excellent job demonstrating the resiliency of its franchise in the midst of a global pandemic that drove a 60% decline in its core travel and entertainment business. The company’s spend-centric model has been helped by fiscal stimulus ensuring a flush consumer, while management continues to execute well by adding millions of new consumer and small and medium business accounts, which should benefit the franchise over the medium to long term. We remain optimistic regarding the company’s prospects as travel and entertainment activity rebounds, adding to our position in the quarter.”
7. Morgan Stanley (NYSE:MS)
Number of Hedge Fund Holders: 65
Morgan Stanley (NYSE:MS) is a financial holding company based in New York. Cramer gave a Buy rating to the firm on December 16 while going into detail about his bullish outlook on the Discussed Stock segment of his show.
Citi analyst Keith Horowitz recently upgraded Morgan Stanley (NYSE:MS) stock to Buy from Neutral and raised the price target to $115 from $105, noting the stock offered high quality at a reasonable price for investors.
At the end of the third quarter of 2021, 65 hedge funds in the database of Insider Monkey held stakes worth $4.9 billion in Morgan Stanley (NYSE:MS), compared to 69 in the preceding quarter worth $5.3 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Morgan Stanley (NYSE:MS) was one of them. Here is what the fund said:
“Top three contributor Morgan Stanley, a leading global financial services company, came into the portfolio in Q4 as a result of its purchase of E*TRADE. E*TRADE is a great fit on Morgan Stanley’s wealth management platform and provides a considerable amount of non-interest-bearing deposit funding. James Gorman, chairman and CEO, has steadily de-risked Morgan Stanley’s business by adding less volatile fee streams and deemphasizing the risk-obtuse culture of prior management. We believe the market will come to appreciate this mix shift over time.”
6. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 72
The host of Mad Money on CNBC recommended Bank of America Corporation (NYSE:BAC), which provides banking and financial products, as a Buy during the Discussed Stock segment of his show on December 13.
In early November, news publication Bloomberg reported that Bank of America Corporation (NYSE:BAC) was among a host of large-cap banks that had applied for regulatory approval to form a brokerage unit in China.
At the end of the third quarter of 2021, 72 hedge funds in the database of Insider Monkey held stakes worth $46.4 billion in Bank of America Corporation (NYSE:BAC), compared to 87 in the previous quarter worth $46.5 billion.
In addition to PayPal Holdings, Inc. (NASDAQ:PYPL), JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc. (NYSE:C), Bank of America Corporation (NYSE:BAC) is one of the stocks that hedge funds are buying.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Bank of America Corporation (NYSE:BAC) was one of them. Here is what the fund said:
“Higher long-term interest rates supported financials such as Bank of America, which has shown both defensive and offensive characteristics in the past year. We believe it continues to be the least risky large bank from a credit standpoint, with conservative underwriting and controlled risk taking, a leading consumer deposit franchise, scale and technology. It is also a leader in its commitments to sustainability, or as it terms it, responsible growth. Disclosure and reporting at all levels form a large part of this commitment, including gender diversity and equality, environmental commitments and support of communities in which it operates. In the first quarter Bank of America announced it is setting a goal of net-zero greenhouse gas (GHG) emissions in its supply chain and operations, and notably also in its financing activities, before 2050.”
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Disclosure. None. 10 Financial Stocks to Buy According to Jim Cramer is originally published on Insider Monkey.
