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.”
4. FedEx Corporation (NYSE:FDX)
CSat Investment Advisory’s Stake Value: $3.34 million
Percentage of CSat Investment Advisory’s 13F Portfolio: 2.8%
Number of Hedge Fund Holders: 61
FedEx Corporation (NYSE:FDX) is an American multinational conglomerate holding company which focuses on transportation, e-commerce and business services. Based in Memphis, Tennessee, the company is ranked fourth on the list of the 10 stocks to invest in according to Claes Fornell.
On October 8, Citi analyst Christian Wetherbee maintained a Buy rating on FedEx Corporation (NYSE:FDX) alongside a $300 price target.
As of Q2 2021, CSat Investment Advisory holds 11,774 shares of FedEx Corporation (NYSE:FDX), worth $3.34 million and representing 2.8% of the fund’s total investment portfolio. At the end of the second quarter of 2021, 61 hedge funds in the database of Insider Monkey held stakes worth $2.17 billion in FedEx Corporation (NYSE:FDX), down from 63 in the previous quarter worth $2.26 billion.
Artisan Partners, in its Q1 2021 investor letter, mentioned FedEx Corporation (NYSE: FDX). Here is what the fund had to say:
“Whatever products did make it off the line met a constrained logistics infrastructure, with commercial air capacity cut and ship cargo space at a premium. Then, in the event your dishwasher part actually made it to US waters, our ports were congested due to manpower shortages and COVID-19 protocols. When the goods were finally unloaded, it turns out trucking shortages caused a spike in ground rates! All this might be bad for your dinner parties, home décor or exercise goals, but it can be great for the middlemen. Middlemen like logistics expert FedEx.
FedEx provides global logistics services. It gets your dishwasher part on a truck, or that semiconductor chip on a plane. Surging demand for at-home deliveries during the pandemic boosted volumes and allowed management to push through price increases, keeping competitive with industry peers. The industry’s renewed pricing discipline was a welcome change, reflecting a broader commitment to earn better returns on invested capital. Despite a significant re-rating of the business over the last 12 months, FedEx remains attractive based on our margin of safety criteria.”
3. Alphabet Inc. (NASDAQ:GOOG)
CSat Investment Advisory’s Stake Value: $3.62 million
Percentage of CSat Investment Advisory’s 13F Portfolio: 3.04%
Number of Hedge Fund Holders: 155
Alphabet Inc. (NASDAQ:GOOG) is a multinational tech-based conglomerate. The California-based ranks third on our list of the 10 stocks to invest in according to Claes Fornell.
As of the end of the June quarter, 155 hedge funds out of the 873 tracked by Insider Monkey held stakes in Alphabet Inc. (NASDAQ:GOOG). According to the recent 13F Filings, Claes Fornell’s CSat Investment Advisory holds 1,752 shares in the company. These shares are worth more than $3.62 million and represent 3.04% of the fund’s total portfolio value.
On October 12, JPMorgan analyst Doug Anmuth maintained an Overweight rating on Alphabet Inc. (NASDAQ:GOOG) with a $3,250 price target, noting that the company was the most liked mega-cap internet stock.
In its Q2 2021 investor letter, Mawer Investment Management named Alphabet Inc. (NASDAQ:GOOG) among the companies that reported strong results. Here is what the fund said:
“Many higher growth companies reported strong results amid the pick-up in broad economic activity including Alphabet. These higher growth companies tend to have increased sensitivity to a change in discount rates and were supported as long-term interest rates stabilized over the period.”
2. Southwest Airlines Co. (NYSE:LUV)
CSat Investment Advisory’s Stake Value: $3.75 million
Percentage of CSat Investment Advisory’s 13F Portfolio: 3.15%
Number of Hedge Fund Holders: 49
Southwest Airlines Co. (NYSE:LUV) is a major American airline company, and is the world’s largest low-cost air carrier. The company provides passenger airline services through its fleet of over 718 aircraft that travel to 121 destinations in the world. It ranks second on our list of the 10 stocks to invest in according to Claes Fornell.
On October 4, Barclays analyst Brandon Oglenski upgraded Southwest Airlines Co. (NYSE:LUV) to Overweight from Equal Weight, with a price target of $75, up from $64.
By the end of the second quarter of 2021, 49 hedge funds out of the 873 tracked by Insider Monkey held stakes in Southwest Airlines Co. (NYSE:LUV) worth roughly $926 million. This is compared to 52 hedge funds in the previous quarter with a total stake value of approximately $747 million. By the end of June, Claes Fornell’s CSat Investment Advisory reported owning 61,529 shares in the company, worth more than $3.75 million.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Southwest Airlines Co. (NYSE:LUV) was one of them. Here is what the fund said:
“One of our goals as we constantly monitor the portfolio is to see if we can better deploy capital by lowering the probability of being wrong. This motivation drove our swap of Delta Airlines into Southwest Airlines during the quarter. We expect a huge rebound in airline traffic as COVID-19 concerns abate, but we are much more comfortable that it will be led by leisure travel. Conversely, we are more uncertain of the ultimate level and timing of business travel demand. Southwest, with its simple fare strategy and high leisure travel exposure, is better positioned to capture the ongoing traffic rebound without having to answer the business travel demand question on which Delta is more dependent. As a result, we expect Southwest to play serious offense as it gains share in the rebounding travel market and can fully leverage the massive pent-up demand for travel that we expect. In addition, the U.S. lead in vaccination over Europe favors Southwest over Delta, given the domestic focus of Southwest. COVID-19 has changed many things, but humans by their very nature like to move, and many of them will do it on Southwest.”
1. Apple Inc. (NASDAQ:AAPL)
CSat Investment Advisory’s Stake Value: $5.85 million
Percentage of CSat Investment Advisory’s 13F Portfolio: 4.92%
Number of Hedge Fund Holders: 138
Apple Inc. (NASDAQ:AAPL) is placed first on our list of the 10 stocks to invest in according to Claes Fornell. The California-based company operates as a technology firm with a large stake in the consumer electronics business.
On October 8, Morgan Stanley analyst Katy Huberty maintained an Overweight rating and $168 price target on Apple Inc. (NASDAQ:AAPL) shares.
By the end of the second quarter of 2021, Claes Fornell held over 47,965 shares in Apple Inc. (NASDAQ:AAPL), worth more than $5.85 million. These shares represented 4.92% of his hedge fund’s portfolio value. According to our database, 138 hedge funds were long Apple Inc. (NASDAQ:AAPL) in the second quarter of 2021, compared to 127 funds in the preceding quarter.
In its Q1 2021 investor letter, Distillate Capital, an asset management firm, highlighted a few stocks and Apple Inc. (NASDAQ:AAPL) was one of them. Here is what the fund said:
“Apple is an even more notable situation and one that highlights our free cash valuation methodology and bears further discussion given its Q3 ‘20 sale from our strategy. For an extended period, Apple was extraordinarily inexpensive on a free cash flow basis and was the largest position in our strategy, exceeding 5% of the portfolio.”
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