Charles Schwab Corp (SCHW)

He's been recommending this since last year's regional bank crisis when Schwab got caught in the crosshairs. It's a premier brokerage house with an amazing franchise. It was insane that shares nearly plunged in half. Last Monday, they reported a great quarter which sent shares 5% higher as the averages sank. Reported top and bottom line beats and added 1 million new accounts in Q1.

Likes their numbers, even better than the big banks. Shares have nearly doubled over the past year. Is less headline and overall risk than the big banks. Have $9.1 trillion in client assets, growth rates are 27% next year and 22% the year after that, and trades at 18x PE. 

Just bought it after the January numbers came out; cash sorting was much better than expected at $6.8 billion on their balance sheets though $9 billion was expected as clients suffer FOMO and are buying stocks. But this helps their net interest income and net interest margin.

True, anything can go wrong with banks, and he's made the wrong call on this in the past, but you can't go wrong buying it at $56.

It got hammered when the regional bank crisis hit. Makes no sense, because Schwab there was little tie-in with those banks. They reported a great quarter last month, but has declined with the rest of the market as bond yields rise. Again, makes little sense. Shares fell 5% yesterday after announcing they close some offices, but they're still integrating TD Ameritrade. Their bond offering doesn't bother him as long as they don't sell common stock (are not).

It's been punished for being a San Francisco financial, but it's now showing momentum and it offers organic growth as it trades at a low PE.

He stuck by this during spring's banking crisis. There was zero chance of a bank run on Schwab. They reported a strong quarter last Tuesday and shares jumped 12%.

She recently added to her position. SCHW has inflows in February and March during the regional bank crisis. Trades at 13x 2024 PE.

He just bought it. SCHW got it pretty hard  in March. He loves the broker dealer business. Also, SCHW has scale. So, he added when shares got hammered by the regional banking crisis. He's overweight financials.

The downgrade is late to the party. Shares are down 30% YTD. Schwab has seen an inflow of assets since the banking crisis in mid-March. This is a brokerage firm that does asset management; it isn't First Republic Bank. It trades at 10x earnings 2024.

They're still making a lot of money in their spreads, in their money market funds, for example.

Their woes are not unique and effect all financials, which all face 5% interest rates and investors seeking yield beyond these stocks.

Panic is not a strategy, but it has fueled the sell-off in this stock. But the CEO has been buying shares and they just reported a good quarter: their assets are sticky and are not in flight. Sellers were acting like Schwab was going under. That was panic. In reality, Schwab lost a bit of earnings power--no big deal. Lately, shares are rallying, up 2.87% today.

#3 loser in Q1, down 37%, a victim of the banking crisis. That's unfair. It has little in common with the regional banks, though they carry large losses in their bond portfolio. It's been punished enough, but can go higher if you aren't squeamish.