5 Stocks to Buy for Interest Rate Hikes

2. Ally Financial Inc. (NYSE:ALLY)

Number of Hedge Fund Holders: 42

Ally Financial Inc. (NYSE:ALLY) is a Michigan-based digital financial services company, serving consumer, commercial, and corporate customers primarily in the United States and Canada. The bank is diversifying its credit portfolio, controlling funding costs, and introducing favorable lending products, which will support robust book value growth into the future. The financials group is positioned to benefit from rising rates, which makes Ally Financial Inc. (NYSE:ALLY) one of the best stocks to buy amid interest rate hikes. 

On September 15, Barclays analyst Jason Goldberg maintained an Overweight rating on Ally Financial Inc. (NYSE:ALLY) but lowered the price target on Ally Financial Inc. (NYSE:ALLY) to $49 from $56.

According to Insider Monkey’s data, 42 hedge funds held stakes worth $2.3 billion in Ally Financial Inc. (NYSE:ALLY) at the end of Q2 2022, compared to 49 funds in the last quarter worth $2.4 billion. Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of the company, with 30 million shares valued at more than $1 billion. 

Here is what Oakmark Fund has to say about Ally Financial Inc. (NYSE:ALLY) in its Q2 2022 investor letter:

“As for Ally Financial, fears of a recession drove the stock price down more than 20% for the period, but business fundamentals have remained strong and the shares now trade for just a mid-single-digit multiple of current earnings. We believe today’s price ignores the funding cost improvements and well-capitalized nature of Ally’s balance sheet. We continue to own both investments given their significant discounts to our estimates of business value.”