Do you believe in the sustainable earnings growth of Charles Schwab Corporation (SCHW)?

The London Company, an investment management company, has published the investor letter “The London Company Large Cap Strategy” for the third quarter of 2024. A copy of the letter can be downloaded here. U.S. stocks rose in the third quarter, with most major indexes posting mid-single-digit gains. The broader market, represented by the Russell 3000 Index, rose 6.2%. In particular, there was a shift from large-cap growth stocks to small-cap and value stocks. The portfolio increased 8.2% (8.1% net) for the quarter, compared to a 6.1% increase for the Russell 1000 Index. Both stock selection and sector exposure had a positive impact on the strategy's relative performance. Additionally, you can check out the fund's top 5 holdings to determine the best picks for 2024.

The London Company Large Cap Strategy highlighted stocks like Charles Schwab Corporation (NYSE:SCHW) in its third-quarter 2024 investor letter. Charles Schwab Corporation (NYSE:SCHW) is a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody and financial advisory services. Charles Schwab Corporation (NYSE:SCHW)'s one-month return was 6.91%, and its shares have gained 29.89% of their value over the past 52 weeks. On November 5, 2024, Charles Schwab Corporation (NYSE:SCHW) stock closed at $71.31 per share with a market cap of $130.45 billion.

London Company Large Cap Strategy stated the following regarding Charles Schwab Corporation (NYSE:SCHW) in its third quarter 2024 investor letter:

“The Charles Schwab Corporation (NYSE:SCHW) – SCHW underperformed the broader market as the company reported a visually poor quarter that had little impact on the company's fundamentals. Consumer cash sorting continued last quarter and took longer than expected. We believe an end to the headwinds for SCHW is near, particularly as the Federal Reserve moves to cut interest rates, and therefore expect a strong recovery in earnings power over the next 18 months. Longer term, we believe SCHW is well positioned to continue to gain market share and drive sustainable earnings growth.”

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Charles Schwab Corporation (NYSE:SCHW) isn't on our list of the 31 most popular stocks among hedge funds. According to our database, there were 72 hedge fund portfolios holding The Charles Schwab Corporation (NYSE:SCHW) at the end of the second quarter, up from 71 in the previous quarter. Charles Schwab Corporation (NYSE:SCHW) revenue increased 5% year-over-year in the third quarter $4.8 billion. While we recognize Charles Schwab Corporation (NYSE:SCHW)'s potential as an investment, we believe AI stocks have more promise for delivering higher returns, and within a shorter time frame. If you're looking for an AI stock that has the same promise as NVIDIA but costs less than five times its earnings, check out our report on it cheapest AI stock.

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