Banking on Experience: 3 Financial Stock Picks from Wall Street’s Longest-Serving Guru


  • Here are three financial stocks to buy for the long haul. 
  • Morgan Stanley (MS): James Gorman positioned the company to win long-term. 
  • Berkshire Hathaway (BRK-A, BRK-B): The best quasi-financial stock you could own.
  • Truist Financial (TFC): The riskiest of the bunch just strengthened its balance sheet.
Financial Stocks to Buy - Banking on Experience: 3 Financial Stock Picks from Wall Street’s Longest-Serving Guru

Source: Hermin /

In life, whether looking for the best financial stocks to buy or the best way to get rich quickly, imitation can be the best form of flattery. Barron’s published an article about bank-stock fund manager David Ellison’s portfolio of financial services stocks in his Hennessy Large Cap Financial Fund (MUTF:HLFNX). 

Ellison has spent 41 years working in the investment industry, the past 27 years running this Hennessey fund and the Hennessey Small Cap Financial Fund (MUTF:HSFNX). He’s been with the fund for so long that it underwent a change in ownership when his old firm, FBR Funds, was acquired by Hennessey in 2012.     

You wouldn’t think an old-school fund manager would own a stock like Coinbase (NASDAQ:COIN), but it’s the large-cap fund’s sixth-largest holding, accounting for 5.41% of its net assets. 

While some excellent names are in the top 10 holdings, here are three other financial stocks to buy from one of Wall Street’s longest-serving fund managers. 

Morgan Stanley (MS)

The logo for Morgan Stanley is displayed on the side of a building.
Source: Ken Wolter /

Morgan Stanley (NYSE:MS) is Ellison’s 12th-largest holding with a 4.81% weighting. 

Former CEO James Gorman, who stepped down in January and became executive chairman of the investment bank, held the top job for 14 years. During that time, MS shares appreciated by 215%, less than the 323% of the S&P 500, but significantly higher than the 133% return for the Dow Jones U.S. Banks Index. It’s all relative. 

As a January article reminded investors, Morgan Stanley generated most of its revenue from traditional banking and capital markets trading when Gorman took over. He pushed the company hard into asset and wealth management. 

As a result, revenues grew from $16.4 billion in 2010 to $54.14 billion in 2023, with wealth management accounting for nearly 50% of annual revenue.

Two acquisitions in 2020 also helped it grow revenues, $13 billion for E-Trade and $7 billion for Eaton Vance. The wealth management business will continue to drive its growth. 

Berkshire Hathaway (BRK-A,BRK-B)

Berkshire Hathaway stock
Source: Sergio Photone /

Berkshire Hathaway (NYSE: BRK-A ,BRK-B) is Ellison’s 15th-largest holding with a 4.29% weighting.

One of the big announcements by Warren Buffett and Berkshire in the holding company’s Q1 2024 results released in early May was the 13% reduction in its Apple (NASDAQ:AAPL) holdings. Berkshire’s most significant sale was 117 million shares of Apple stock, more than the 93.5 million shares it sold in 2020.

Buffett likes Apple, he called it a better business than Coca-Cola (NYSE:KO) at its annual meeting in Omaha. However, he wants to keep adding to the company’s cash position.

Berkshire Hathaway’s cash position as of March 31 was more than $188 billion. If its cash were an S&P 500 company, it would be the 42nd largest. Of course, it doesn’t hurt that it makes more than $8 billion annually in income from this cash. Who wouldn’t like it? 

With meme-stock mania back in full force, I think his actions make a lot of sense.   

Truist Financial (TFC)

Smartphone with website of American financial company Truist Financial Corporation on screen in front of logo.
Source: T. Schneider /

Truist Financial (NYSE:TFC) is Ellison’s 21st-largest holding with a 1.99% weighting. TFC stock is up nearly 41% over the past year.

Analysts are lukewarm about the financial stock. Of 23 analysts, 12 rate it a buy with a $43 target, about 10% higher than where it’s currently trading. Understandably, it would be a smaller holding of Ellison’s. 

On May 7, Truist announced the sale of its remaining stake in Truist Insurance Holdings to a consortium of private equity investors, including Stone Point Capital, Clayton, Dubilier & Rice, Mubadala Investment Company and other co-investors.

“The sale of TIH significantly enhances Truist’s financial profile and positions Truist to invest in and grow its core banking businesses,” CEO Bill Rogers stated in the transaction’s press release.

Moody’s downgraded Truist’s long-term senior unsecured debt to Baa1 from A3. There’s a difference of opinion about the pros and cons of the deal. 

While the sale improved the bank’s liquidity and capitalization, Moody’s argues it did so at the expense of revenue diversification. It now has to rely on the net interest income of its lending business, potentially leading to greater earnings volatility.

It’s a riskier bet that could pay off for aggressive investors and seasoned investment pros such as Ellison.

On the date of publication, Will Ashworth did not have (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 Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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