What Makes Charles Schwab Corporation (SCHW) a Strong Investment Option?

RiverPark advisorsan investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. During the third quarter, markets performed strongly with the Russell 1000 Growth Index (RLG) and the S&P 500 Index returning 3.19% and 5.89%, respectively, and the RPX returning 3.73%. A weaker-than-expected jobs report that raised fears of an impending recession sent RLG down 8.8% from the end of June to the fifth of August, giving the quarter a rocky start. When China passed a sizeable stimulus package and the Fed began its rate cut cycle with a 0.50% drop to a target of 4.75%-5.00%, those losses quickly reversed. Additionally, check out the fund’s top five holdings to know the best picks in 2024.

RiverPark Large Growth Fund featured stocks like The Charles Schwab Corporation (NYSE:SCHW) in the Q3 2024 Investor Letter. Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company that offers wealth management, securities brokerage, banking, wealth management, custody and financial advice. One month return of The Charles Schwab Corporation (NYSE:SCHW) was -4.60% and its shares increased 14.36% of their value over the last 52 weeks. On December 17, 2024, The Charles Schwab Corporation (NYSE:SCHW) stock closed at $76.76 per share. stock with a market capitalization of USD 140.514 billion.

RiverPark Large Growth Fund stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its Q3 2024 Investor Letter:

“Charles Schwab Corporation (NYSE:SCHW): SCHW was a major detractor in the third quarter after a lackluster second-quarter earnings report. After two quarters of stabilizing client deposits and continuing to reduce short-term high-cost funding, both metrics reversed in the second quarter, prompting the company to lower near-term EPS expectations. Customer deposit accounts, while no longer significantly affected by cash sorting (customers moving cash to higher-yielding instruments), fell more than expected as customers used that cash to pay taxes. Lower than expected deposits in turn limited SCHW’s ability to continue paying down higher cost funding sources, ultimately leading to lower spread income. Although near-term EPS expectations were lowered, we believe that 1) higher spreads should still be realized, albeit delayed, and 2) overall client assets continue to grow at a healthy pace driven by market gains and organic growth.

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Charles Schwab Corporation (NYSE:SCHW) is not on our list 31 most popular stocks among hedge funds. According to our database, 74 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter, up from 72 in the previous quarter. Third quarter income of The Charles Schwab Corporation (NYSE:SCHW) rose 5% year-over-year to $4.8 billion. While we recognize the potential of The Charles Schwab Corporation (NYSE:SCHW) as an investment, our conviction lies in the belief that AI stocks hold greater promise to deliver higher returns and do so in a shorter time frame. If you’re looking for an AI stock as promising as NVIDIA but trading at less than 5 times its earnings, check out our report on cheapest AI stock.

IN another articlewe discussed The Charles Schwab Corporation (NYSE:SCHW) and shared Broyhill Asset Management’s view of the company. Additionally, please check our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article was originally published on Insider monkey.