In this article, we present the list of the 5 stocks to buy before interest rates rise in March. For our methodology and a more comprehensive list, go directly to 10 Stocks to Buy Before Interest Rates Rise in March.
5. Raymond James Financial, Inc. (NYSE:RJF)
Number of Hedge Fund Holders: 32
Raymond James Financial, Inc. (NYSE:RJF) is one of the best stock picks for a rising interest rate environment. The Florida-based company has a PE ratio of 13.7 and has a dividend yield of 1.36%. Financial services firm Seaport upgraded Raymond James Financial, Inc. (NYSE:RJF) to Buy from Neutral on the back of the company’s organic growth amid the expected rising interest rates. Similarly, Morgan Stanley also recommends Raymond James Financial, Inc. (NYSE:RJF) to those who want to “avoid credit risk.”
4. Wells Fargo & Company (NYSE:WFC)
Number of Hedge Fund Holders: 94
Wells Fargo & Company (NYSE:WFC) has been increasing its dividend for several years now. This makes this financial stock extremely attractive in the current environment. Morgan Stanley (NYSE:MS) analysts Betsy Graseck and Michael Cyprys named Wells Fargo & Company (NYSE:WFC) in their list of stocks that will gain amid the upcoming rate hikes.
Legendary investor Warren Buffet has a $32 million stake in Wells Fargo & Company (NYSE:WFC) as of the end of the fourth quarter. The Oracle of Omaha has been holding a stake in the bank since 2010.
L1 Capital, an investment management firm, published its ‘L1 Long Short Fund Limited’ fourth quarter 2021 investor letter and mentioned Wells Fargo & Company (NYSE:WFC). Here‘s what the fund said:
“Detailed, bottom-up stock research remains the investment team’s primary focus and the core driver of portfolio performance. 2021 once again demonstrated the team’s ability to identify ‘winners’ through extensive company and industry research across a diverse range of sectors. Key contributors included Wells Fargo, (due to its) improving compliance and operational performance, falling bad debts and progress towards removal of ‘asset cap’. Exited our holding in June at a >50% gain.”
3. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 72
The Charles Schwab Corporation (NYSE:SCHW) in February received a bullish call from Deutsche Bank analyst Brian Bedell who thinks that the stock will gain because of the interest rate hike. The analyst said he prefers to see a 50 basis point hike for the stock, but 25bps will also be positive. The Charles Schwab Corporation (NYSE:SCHW) has been paying dividends consistently for the last 32 years.
At the end of the fourth quarter of 2021, 72 hedge funds had stakes in The Charles Schwab Corporation (NYSE:SCHW), as compared to 59 funds a quarter earlier. John Armitage’s Egerton Capital Limited has a $1.2 billion stake in the company.
Weitz Investment Management, an investment management firm, published its “Partners III Opportunity Fund” fourth quarter 2021 investor letter and mentioned The Charles Schwab Corporation (NYSE:SCHW). Here‘s what the fund said:
“Financial services firm Charles Schwab took bronze medals for the fourth quarter and calendar year. Brokerage account balances are higher, and investors are anticipating better profit margins for the bank’s lending business in the quarters ahead.”
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 63
Walmart Inc. (NYSE:WMT) is yet another consumer defensive play investors are flocking to amid market volatility. Walmart Inc. (NYSE:WMT)’s fourth-quarter report shows the company’s resilience and strength that helped it offset the supply chain challenges. Comparable sales in the quarter jumped 5.6% in the U.S. Adjusted income in the period was $6.0 billion, versus $5.7 billion posted in the same quarter last year.
Walmart Inc. (NYSE:WMT) declared a quarterly dividend of $0.56 per share recently, a 1.8% increase from the prior dividend of $0.55. Forward dividend yield comes in at 1.68%.
As of the end of the fourth quarter of 2021, 63 hedge funds had stakes in Walmart Inc. (NYSE:WMT). The total value of these stakes is $71.4 billion.
1. M&T Bank Corporation (NYSE:MTB)
Number of Hedge Fund Holders: 65
Morgan Stanley (NYSE:MS) in a report said that if investors want to avoid equity market risk in the upcoming rate hike environment, they should consider M&T Bank Corporation (NYSE:MTB), among some other financial stocks. With a PE ratio of 12.7, the stock is up about 11.36% year to date. M&T Bank Corporation (NYSE:MTB) saw a significant uptick in hedge fund sentiment in the fourth quarter. 37 hedge funds out of the 924 tracked by Insider Monkey had stakes in M&T Bank Corporation (NYSE:MTB) at the end of the fourth quarter, compared to 27 funds a quarter earlier.
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