In this article, we discuss the 5 Best Financial Services Stocks to Buy Now. If you want to read our detailed analysis of the finance sector, go directly to read 10 Best Financial Services Stocks to Buy Now.
5. Bank of America Corporation (NYSE:BAC)
Number of Hedge Fund Holders: 72
In Q3, Bank of America Corporation (NYSE:BAC)’s organic customer growth momentum reached pre-pandemic levels as its deposit balances exceeded $1 trillion for the first time, presenting a 16% growth from the prior-year quarter. Due to the strong deposit growth and improving fundamentals, Bank of America Corporation (NYSE:BAC) remains one of the best financial services stocks to buy now.
Warren Buffett’s Berkshire Hathaway held a $42.8 billion worth of stake in Bank of America Corporation (NYSE:BAC) in Q3, becoming the company’s largest shareholder. Overall, 72 hedge funds in Insider Monkey’s database held stakes in the company in Q3, down from 87 in the previous quarter. The consolidated value of these stakes is over $46.4 billion.
Recently, Piper Sandler lifted its price target on Bank of America Corporation (NYSE:BAC) to $53, with an Overweight rating on the shares, highlighting the bank’s recent multiple expansions. As of the close of December 2, the stock’s year-to-date returns stood at 45.99%.
Oakmark Funds mentioned Bank of America Corporation (NYSE:BAC) in its Q3 2021 investor letter. Here is what the firm has to say:
“Earlier this year, one of our holdings, Bank of America, announced that it was raising its minimum hourly wage from $15 to $20 and would increase it to $25 by 2025. The company received great press for placing the well-being of its employees above profits. But was it really either/or? Bank of America’s chief human resources officer spoke to the bigger picture: “A core tenet of responsible growth is our commitment to being a great place to work…that includes providing strong pay and competitive benefits to help them and their families, so that we continue to attract and retain the best talent.” Bank of America understood that engaged, high-caliber employees are more productive, less prone to turnover and, therefore, less expensive in the long run. Increasing the pay for employees wasn’t elevating employees above shareholders; it was the right thing to do for employees and for shareholders.
If an increase to $20 was good, why stop there? Why not $50 per hour? Because the benefits the business receives at $50 don’t justify the expense. The bank would no longer be able to price its products competitively and would lose business. The employees would “win” in the short term, but eventually the lost business would lead to job cuts, meaning both employees and shareholders would lose. The negative effects of stakeholder overreach are no different than when CEOs overreach to inflate short-term profits. Both hurt shareholders and stakeholders.”
