5 Best Spring Stocks To Buy Now

Below we present the list of 5 Best Spring Stocks To Buy Now. For our methodology and a more comprehensive list please see 12 Best Spring Stocks To Buy Now.

5. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Shareholders: 89

The Charles Schwab Corporation (NYSE:SCHW) reached a new all-time high in hedge fund ownership during Q1 among the select group of funds tracked by Insider Monkey. The company has become increasingly more popular with hedge funds over the years and now ranks ahead of industry titans like Citigroup and Wells Fargo as a result.

The Charles Schwab Corporation (NYSE:SCHW) shares are down by 38% this year, largely on fears that the brokerage firm would follow in the path of SVB Financial and Signature Bank due to clients migrating their cash to institutions seen as bigger and safer. While Charles Schwab’s deposits did shrink by 11% in the first quarter, the company nonetheless grew revenue by 10% and net income by 14% year-over-year during the quarter, as its strong brokerage activity more than outweighed the drop in its personal banking segment.

Baron Asset Fund believes The Charles Schwab Corporation (NYSE:SCHW) is well positioned to continue growing earnings long-term, as outlined in its Q1 2023 investor letter:

“Shares of online brokerage firm The Charles Schwab Corporation (NYSE:SCHW) declined during the quarter following the failure of SVB that led to weakness in Financials generally and particularly in regional banks. We do not believe Schwab is at any risk of a potential solvency issue (or run on the bank). Despite running a much different business than SVB, Schwab is facing near-term deposit pressure through cash sorting in the wake of SVB’s collapse. As interest rates rose, Schwab customers continued to move their uninvested cash balances into higher-yielding money market funds. As cash balances at Schwab decrease, the company may need to raise short-term external funding, which is more costly than the customer cash balances being depleted. This trend has pressured its earnings estimates and contributed to the recent share price weakness. Nevertheless, we retain long-term conviction in the value of Schwab’s franchise. Despite dislocation in the financial system, Schwab saw accelerating net inflows year-to-date, gathering over $75 billion in new assets in just the first two months of 2023. We remain encouraged by the firm’s exceptional client loyalty levels, robust organic growth, and industry-leading operating expense per client assets. Schwab remains well positioned to retain client assets and increase long-term earnings growth, in our view.”