In this article, we discuss the 10 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.”
5. The Goldman Sachs Group, Inc. (NYSE:GS)
Number of Hedge Fund Holders: 74
The Goldman Sachs Group, Inc. (NYSE:GS) provides a range of financial services. Jim Cramer gave the stock a Buy recommendation during the Discussed Stock segment of his show in mid October.
On October 18, investment advisory Oppenheimer raised the price target on The Goldman Sachs Group, Inc. (NYSE:GS) stock to $576 from $520 and kept an Outperform rating. Analyst Chris Kotowski issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management is a leading shareholder in The Goldman Sachs Group, Inc. (NYSE:GS) with 3.6 million shares worth more than $1.3 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and The Goldman Sachs Group, Inc. (NYSE:GS) was one of them. Here is what the fund said:
“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”
4. Citigroup Inc. (NYSE:C)
Number of Hedge Fund Holders: 79
The journalist investor spoke about Citigroup Inc. (NYSE:C), a diversified financial services firm, during the Discussed Stock round of Mad Money on December 1, giving it a Buy rating.
Citigroup Inc. (NYSE:C) recently announced that two retail banking units of the firm, based in Puerto Rico and Uruguay, would be sold to independent broker Insigneo. Scott Schroeder, a key executive at the firm, said the sale would “simplify” the wealth business of Citigroup.
At the end of the third quarter of 2021, 79 hedge funds in the database of Insider Monkey held stakes worth $5.5 billion in Citigroup Inc. (NYSE:C), compared to 87 the preceding quarter worth $6.1 billion.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Citigroup Inc. (NYSE:C) with 28 million shares worth more than $1.9 billion.
In its Q1 2021 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Citigroup Inc. (NYSE:C) was one of them. Here is what the fund said:
“We fully exited position in Citigroup. Global financial services company Citigroup made a $900 million clerical error and received a public reprimand from federal regulators. This, after a decade focused on process control, information technology and risk systems, makes the error substantially more costly than just the $900 million mistake. Regulators believe the company’s risk management improvements have fallen short of expectations. To rectify the situation, a process and technology spending surge could negatively affect 2021-2022 profits by 10% to 20%. Trust and confidence are important in large financial institutions, and this incident combined with the CEO’s sudden retirement shook ours.”
3. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 101
JPMorgan Chase & Co. (NYSE:JPM) is a New York-based finance firm. It has an impressive dividend history with eight consecutive years of increasing payouts and 25 years of payments. It recently declared a quarterly dividend of $1.00 per share, in line with previous. The forward yield was 2.51%.
In mid-October, JPMorgan Chase & Co. (NYSE:JPM) 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 investment firm Fisher Asset Management is a leading shareholder in JPMorgan Chase & Co. (NYSE:JPM) with 7 million shares worth more than $1.1 billion.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and JPMorgan Chase & Co. (NYSE:JPM) was one of them. Here is what the fund said:
“After a strong performance in 2019, we wrote this about our bank stocks in last year’s report: “There will be another recession sooner than later, and our banks will see larger loans losses, but we think this is more than priced into the stock, and our banks are well reserved for that eventuality.” Little did we know “sooner” really meant “a few weeks from now.” Despite the economic shock, the banks still have huge capital cushions that can absorb large loan losses. Our remaining bank investments, JPMorgan and Bank of America, increased their reserves significantly at the beginning of the Covid-19 crisis in anticipation of imminent loan defaults, but with the government stimulus and perhaps a more resilient economy than many would have guessed, actual loan losses are up only slightly. They might happen later in 2021, but with an additional stimulus package and the vaccine rolling out, the large-scale losses may not be as bad as most people predicted. The bigger drag on the banks’ earnings power is lower rates, which in our opinion will persist for a long time. Despite this drag, we estimate both JPMorgan and Bank of America will continue to grow revenue and earnings over the next few years, while we believe their stocks remain bargains in a somewhat expensive market. JPMorgan’s earnings per share declined 17% last year, and its stock returned -5.5%. Bank of America’s earnings, which are more sensitive to interest rates, were down 32%, and its stock returned -11.6%.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Number of Hedge Fund Holders: 106
Berkshire Hathaway Inc. (NYSE:BRK-B) is a conglomerate with core interests in the insurance business. Cramer gave a Buy rating to the firm in late October while answering a question related to it on the Lightning Round segment of his show.
Over the past month, Berkshire Hathaway Inc. (NYSE:BRK-B) stock has outperformed the benchmark S&P 500 by 1.2 percentage points and the growth-heavy ARK Innovation ETF by close to 19 percentage points, indicating the market shift towards value heading into 2022.
At the end of the third quarter of 2021, 106 hedge funds in the database of Insider Monkey held stakes worth $19 billion in Berkshire Hathaway Inc. (NYSE:BRK-B), compared to 116 in the preceding quarter worth $22 billion.
In its Q1 2021 investor letter, Vltava Fund, an asset management firm, highlighted a few stocks and Berkshire Hathaway Inc. (NYSE:BRK-B) was one of them. Here is what the fund said:
“Despite the considerable rise in stock markets over the past year, there are still many attractive opportunities. Human nature also is playing a bit into our hands. Investor crowds often chase popular stocks, hot IPOs, or mysterious SPACs and completely leave aside stocks they consider boring and not sexy enough. A typical example of this category is our long-term largest position in Berkshire Hathaway. Since we bought it for the first time, its price has nearly quadrupled and yet it remains just as undervalued today as it was at that time. Considering the current rate at which it is buying back its own shares and the amount of cash that Berkshire Hathaway has, my greatest wish as a shareholder is for the company’s share price to remain as low as possible for as long as possible.”
1. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 123
The host of Mad Money on CNBC recommended PayPal Holdings, Inc. (NASDAQ:PYPL), a payments technology firm headquartered in California, as a Buy during the Discussed Stock segment of his show on December 1.
UBS analyst Rayna Kumar recently assumed coverage of PayPal Holdings, Inc. (NASDAQ:PYPL) stock with a Buy rating and a price target of $263, noting the firm would benefit from accelerated growth of digital payments in the coming months.
At the end of the third quarter of 2021, 123 hedge funds in the database of Insider Monkey held stakes worth $12.8 billion in PayPal Holdings, Inc. (NASDAQ:PYPL), compared to 143 in the preceding quarter worth $16.4 billion.
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
You can also take a peek at 10 Stocks Reddit’s WallStreetBets is Buying in July 2021 and Top Robinhood Stocks Popular on Reddit.
Follow Insider Monkey on Twitter
Suggested Articles:
- Beyond GameStop: Reddit’s WallStreetBets is Now Targeting These 10 Stocks
- 10 Hedge Funds that Profited from Reddit’s Meme Stock Craze
- 10 Best SPACs to Invest In According to Reddit
Disclosure. None. 10 Financial Stocks to Buy According to Jim Cramer is originally published on Insider Monkey.
