Jim Cramer’s Top 5 Bank Stock Picks This Year

3. The Charles Schwab Corporation (NYSE:SCHW)

Number of Hedge Fund Holders: 88

Jim Cramer recently called The Charles Schwab Corporation (NYSE:SCHW) a “cheap” stock and said people’s concerns over the company’s balance sheet are “overdone.” Cramer said that these concerns are keeping a lid on The Charles Schwab Corporation (NYSE:SCHW). Cramer was also eager to find out the reasons behind these concerns in the bank’s latest earnings report.  The Charles Schwab Corporation (NYSE:SCHW) posted mixed quarterly results. Adjusted EPS in the third quarter came in at $0.77 beating estimates by $0.03. Revenue in the period fell 16.2% year over year to $4.61 billion, meeting estimates.

As of the end of the second quarter of 2023, 88 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in The Charles Schwab Corporation (NYSE:SCHW). The biggest stakeholder of The Charles Schwab Corporation (NYSE:SCHW) was Natixis Global Asset Management’s Harris Associates which owns a $1.1 billion stake in the company.

ClearBridge Large Cap Value Strategy made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q2 2023 investor letter:

“We have done so recently with The Charles Schwab Corporation (NYSE:SCHW), which got caught up in investor concerns over regional banks, due to the perception of an asset/liability mismatch on Schwab’s balance sheet. While there are similarities with regional banks, Schwab has minimal credit risk and far higher organic growth than traditional banks. In addition, Schwab’s mostly retail customers are not pulling money out of its ecosystem. On the contrary, the company continues to grow client assets at a mid-single-digit percentage rate despite the banking selloff. Concerned over interest rate risk, we trimmed our position last year and earlier this year. As the stock pulled back this spring, we added back aggressively. It remains an exceptionally strong franchise in terms of asset gathering and customer loyalty and runs a unique business model that continues to attract client assets; we are pleased to have the opportunity to express our differentiated view.”