In this article, we will be discussing the 5 stocks to invest in according to Claes Fornell. If you want to see our detailed analysis of Fornell’s history, investment philosophy, and hedge fund performance, go directly to the 10 Stocks To Invest In According To Claes Fornell.
5. The Charles Schwab Corporation (NYSE:SCHW)
CSat Investment Advisory’s Stake Value: $3.11 million
Percentage of CSat Investment Advisory’s 13F Portfolio: 2.61%
Number of Hedge Fund Holders: 72
The Charles Schwab Corporation (NYSE:SCHW) is a multinational financial services company that offers commercial banking, asset management and wealth management services. Ranked fifth on our list of the 10 stocks to invest in according to Claes Fornell, The Charles Schwab Corporation (NYSE:SCHW) has a market capitalization of $157.74 billion.
By the end of the second quarter of 2021, 72 hedge funds out of the 873 tracked by Insider Monkey held stakes in The Charles Schwab Corporation (NYSE:SCHW) worth roughly $4.85 billion. This is compared to 76 hedge funds in the previous quarter with a total stake value of approximately $4.9 billion. Claes Fornell currently owns 47,839 shares in the company. The value of these shares amount to more than $3.11 million and account for 2.61% of his hedge fund’s portfolio.
On October 22, Citi analyst William Katz raised his price target on The Charles Schwab Corporation (NYSE:SCHW) to $100 from $98, and kept a Buy rating on the shares of the company.
Lakehouse Capital, an investment management firm, releases its Q2 2021 investor letter and mentioned The Charles Schwab Corporation (NYSE:SCHW) in it. Here is what the firm has to say:
“Charles Schwab is not a household name in Australia but it is in the US where it is the largest discount broker with more than 32 million brokerage accounts, 2 million corporate retirement plans, and total client assets of US$7.4 trillion. Schwab’s shares performed extremely well during the year thanks to a confluence of factors including a strong stock market with the S&P 500 up 39% year-on-year, the company’s recent merger with industry heavyweight TD Ameritrade, and expectations that interest rate income would grow as the US economy gained steam.
Two other important contributors to Schwab’s year, which were a mix of cyclical and structural, were an increase in net new accounts and increased trading activity. We view these as cyclical in the sense that markets are performing very well and that retail investors have been bored and emboldened during the American lockdowns, however, also structural because Schwab’s shift to $0 commissions on equity trades has permanently reduced a barrier to trading for investors with smaller accounts. We also note that, while brokerage activity is cyclical, the average brokerage account itself is very sticky — we estimate normalised annual retention rates for accounts of better than 93% — and that the average client assets per account grow over time thanks to asset growth and clients collectively being net savers.
Schwab makes for an excellent natural hedge for the Fund as Schwab tends to perform well when interest rates increase, which is generally negative for the rest of the portfolio. And the position did its job for us by increasing during a rising interest rate environment, enabling us to harvest much of our gains from Schwab and redeploy them to shares of other growth companies that had gotten cheaper in response to higher rates. We’re mindful of the run in the shares and the cyclical nature of the business but comfortable keeping a small position for now given Schwab’s natural hedging dynamics, extremely loyal customers, and an industry-leading position in a growing market.”
