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5 Investors Betting Big on Charles Schwab (SCHW) Stock


  • Charles Schwab (SCHW) reported a first-quarter net income of $1.6 billion, up by 14% year-over-year.
  • Toronto Dominion Bank (TD) is the largest shareholder of the company, with ownership of 225.99 million shares.
  • SCHW stock is down by over 35% year-to-date.
SCHW stock - 5 Investors Betting Big on Charles Schwab (SCHW) Stock

Source: Sundry Photography / Shutterstock.com

Shares of Charles Schwab (NYSE:SCHW) stock are up by about 2% after the multinational financial services company reported its first-quarter earnings. First, revenue tallied in at $5.11 billion, missing the consensus analyst estimate of $5.15 billion. Adjusted EPS, however, was 93 cents, which beat the consensus analyst estimate of 90 cents.

Next, net income was $1.6 billion, up 14% from $1.4 billion a year ago. The increase in income was driven by higher pre-tax profit margins on both a GAAP and an adjusted basis, as well as increased interest revenue.

“During the quarter, clients opened over 1 million new brokerage accounts and entrusted us with $132 billion of core net new assets – including over $53 billion in March alone,” said co-CEO Walt Bettinger. “While Investor Services gathered approximately $60 billion during the period, the Advisor Services segment posted a record first quarter with over $71 billion in net flows and attracted 70 transitioning advisor teams.”

However, bank account deposit revenue fell to $151 million compared to $294 million a year ago. On top of that, bank account deposits were $325.7 billion, down by a significant 30% year-over-year and 11% quarter-over-quarter. When deposit outflows exceed cash on hand, Charles Schwab must use other capital resources, such as Federal Home Loan Bank (FHLB) loans. FHLB loans totaled $45.6 million for the quarter compared to $12.4 million during Q4.

5 Investors Betting Big on SCHW Stock

Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q4, a healthy 1,569 13F filers disclosed a stake in SCHW stock, an increase of 90 filers from the prior quarter. Of these filers, 128 own SCHW in their top ten positions. Meanwhile, the institutional put/call ratio sits at 0.92, up from 0.83. That’s equivalent to 14.04 million puts and 15.29 million calls, implying a relatively neutral options stance.

With that in mind, let’s take a look at the top five shareholders of SCHW:

  1. Toronto Dominion Bank (NYSE:TD): 225.99 million shares. TD’s stake is accurate as of the fourth quarter.
  2. Vanguard: 125.88 million shares. Vanguard acquired 1.45 million shares during Q4.
  3. BlackRock (NYSE:BLK): 106.84 million shares. BlackRock acquired 3.90 million shares during Q4.
  4. Charles R. Schwab, Founder: 99.90 million shares. Schwab offloaded 186,305 shares on February 13 and 14.
  5. Wellington Management Group: 79.84 million shares. Wellington acquired 4.43 million shares during Q4.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/5-investors-betting-big-on-charles-schwab-schw-stock-2/.

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