8. The Charles Schwab Corporation (NYSE:SCHW)
Market capitalization: $153.97 billion
Forward P/E: 11.33
Expected forward revenue growth: 17.29%
Number of hedge fund holders: 95
Client Money Keeps Arriving, and the Earnings Follow
The Charles Schwab Corporation (NYSE: SCHW) offers a different route into a growth-stock portfolio: helping investors manage their money rather than supplying the equipment behind the AI boom. On October 15, the company reported record third-quarter core net new assets of $190.4 billion, up 38% year over year, and 1.2 million new brokerage accounts. Total client assets reached $13.33 trillion, a 15% increase. The distinction between new money and market appreciation deserves attention. Rising markets can lift account values without winning a single new customer; core net new assets provide a clearer view of the money clients are actually bringing to the platform.
The financial results suggest that the expanding client base is translating into stronger earnings. Quarterly net revenue increased 17% to $7.2 billion, while adjusted earnings per share rose 29% to $1.69. The adjusted pretax profit margin reached 54.8%, compared with 51.3% a year earlier. Bank loan balances increased 35% to $72.3 billion, and managed investing solutions recorded 22% growth in net flows. Chief executive Rick Wurster said the company’s “leading value proposition continues to resonate with investors and RIAs.” Together, those measures support a business case built on attracting assets, deepening relationships, and serving more of each customer’s financial needs, rather than relying on trading activity alone.
At the supplied forward P/E of 11.33, the valuation question is whether that combination of asset gathering and profitability can endure through a less cooperative market. A larger client base creates opportunities for investment management, lending, and other services, but it does not make the earnings stream immune to interest rates or changes in investor behavior. Clients can move cash toward higher-yielding alternatives, borrow less, or reduce activity when confidence weakens. Our interpretation is that sustained net inflows deserve more weight than a single quarter of buoyant asset prices. For value investors, the attraction lies in a franchise that may grow with its customers; the discipline lies in testing how well it performs when those customers become more cautious.
Ranking rationale: The Charles Schwab Corporation (NYSE: SCHW) ranks eighth with 95 hedge fund holders. Its supplied 17.29% expected revenue growth clears the screening threshold, while the 11.33 forward P/E places it among the lower-multiple financial stocks considered here. Record asset gathering provides the central operating support for its inclusion.
