What Makes TFS Financial (TFSL) an Interesting Company?

Middle Coast Investing, an investment advisor firm, released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was favorable for Middle Coast Investing. Its collective portfolio outperformed the S&P 500 and is ahead of benchmarks year to date. In Q3 2025, the US Portfolios returned 9.6% compared to 7.8% for the S&P 500. It’s Core U.S. portfolios returned 10% while the Russell 2000 returned 12%, the S&P 600 returned 8.7% and the Nasdaq generated 11.2% for the same period. Also, its European Portfolios appreciated by 5.5%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Middle Coast Investing highlighted stocks such as TFS Financial Corporation (NASDAQ:TFSL). TFS Financial Corporation (NASDAQ:TFSL) is a US-based retail consumer banking services provider. The one-month return of TFS Financial Corporation (NASDAQ:TFSL) was 1.04%, and its shares gained 9.11% of their value over the last 52 weeks. On October 6, 2025, TFS Financial Corporation (NASDAQ:TFSL) stock closed at $13.65 per share, with a market capitalization of $3.831 billion.

Middle Coast Investing stated the following regarding TFS Financial Corporation (NASDAQ:TFSL) in its third quarter 2025 investor letter:

“TFS Financial Corporation (NASDAQ:TFSL): One more Thomas Lott idea. This is a small Ohio bank that doesn’t seem cheap, but that’s because most of its shareholders are shareholders in the mutual holding company, who waive their rights to the dividend annually. TFS is interesting, then, because it pays out an 8%+ dividend, making it a viable bond replacement, and because it benefits from interest rate cuts. We have just seen interest rates cut for the f irst time in 2025, and more cuts may be in store. We have stocks, like Charles Schwab, that benefit from higher interest rates, so it’s good to have the other side of the equation. And for now, this is just taking the place of a bond in one of our portfolios.”

TFS Financial Corporation (NASDAQ:TFSL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 13 hedge fund portfolios held TFS Financial Corporation (NASDAQ:TFSL) at the end of the second quarter, compared to 15 in the previous quarter.  While we acknowledge the risk and potential of TFS Financial Corporation (NASDAQ:TFSL) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TFS Financial Corporation (NASDAQ:TFSL) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money.

Disclosure: None. This article is originally published at Insider Monkey.