5 Stocks to Buy for Interest Rate Hikes

In this article, we discuss 5 stocks to buy for interest rate hikes. If you want to see more stocks in this selection, check out 10 Stocks to Buy for Interest Rate Hikes. 

5. Arthur J. Gallagher & Co. (NYSE:AJG)

Number of Hedge Fund Holders: 31

Arthur J. Gallagher & Co. (NYSE:AJG) is an Illinois-based company that provides insurance brokerage, consulting, third-party claims settlement, and administration services globally. In August, Arthur J. Gallagher & Co. (NYSE:AJG) made multiple acquisitions of insurance firms, including Watkins Group, Hillsboro, Denver Agency, and Another Day. Arthur J. Gallagher & Co. (NYSE:AJG) is one of the best stocks to buy amid interest rate hikes. 

On August 26, Argus analyst John Staszak initiated coverage of Arthur J. Gallagher & Co. (NYSE:AJG) with a Buy rating and a $215 price target. The analyst forecasts organic growth of 10% in Arthur J. Gallagher & Co. (NYSE:AJG)’s Brokerage segment in the second half of the year, which is higher than the management’s estimate of 9%. He also forecasts 10% growth in its Risk Management business. Prospects for higher interest rates, robust organic growth, and contributions from acquisitions led to his above-consensus EPS estimates of $8.00 for 2022 and $9.00 for 2023, the analyst told investors in a research note.

According to Insider Monkey’s Q2 data, 31 hedge funds were long Arthur J. Gallagher & Co. (NYSE:AJG), up from 24 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the biggest stakeholder of the company, with 788,803 shares worth $128.60 million.

Here is what Cooper Investors Global Equities Fund has to say about Arthur J. Gallagher & Co. (NYSE:AJG) in its Q1 2022 investor letter:

“In terms of underlying businesses, the portfolio holdings are going well and largely reported solid numbers during earnings season with positive language around the outlook for 2022. Our insurance broker Arthur J Gallagher is a stand-out performer, delivering low-double-digit organic revenue growth at the same time as margin expansion – this is a business that benefit from higher interest rates, emerging risks and inflating premiums. While rising rates, supply chain constraints and war in Europe represent a myriad of challenges for many industries, our view is that our management teams are highly experienced focused operators. They are well equipped to deal with these challenges, having shown great resilience and flexibility during many crises, the most recent example (COVID) proving yet again the power of their business models.”