Cove Street Capital LLC Cuts Position in The Charles Schwab Corporation $SCHW

Key Points

• Cove Street Capital LLC reduced its stake in The Charles Schwab Corporation by 47.5%, leaving it with 15,668 shares. This investment now represents 1.9% of Cove Street Capital's portfolio.
• Charles Schwab's quarterly earnings beat analysts' expectations, reporting $1.14 earnings per share compared to an estimate of $1.10, with revenue of $5.85 billion exceeding forecasts as well.
• The company has authorized a $20 billion share buyback program, which indicates its belief that its shares are currently undervalued.

Cove Street Capital LLC trimmed its stake in The Charles Schwab Corporation (NYSE:SCHW - Free Report) by 47.5% in the 1st quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 15,668 shares of the financial services provider's stock after selling 14,156 shares during the period. Charles Schwab accounts for 1.9% of Cove Street Capital LLC's portfolio, making the stock its 20th largest position. Cove Street Capital LLC's holdings in Charles Schwab were worth $1,226,000 as of its most recent filing with the Securities and Exchange Commission.

A number of other hedge funds have also recently made changes to their positions in SCHW. Bain Capital Public Equity Management II LLC bought a new stake in Charles Schwab during the first quarter valued at about $79,605,000. Bain Capital Public Equity LP bought a new position in Charles Schwab in the first quarter worth about $4,816,000. Alliancebernstein L.P. lifted its position in shares of Charles Schwab by 16.0% during the first quarter. Alliancebernstein L.P. now owns 17,115,759 shares of the financial services provider's stock valued at $1,339,822,000 after buying an additional 2,355,309 shares during the last quarter. AQR Capital Management LLC boosted its holdings in shares of Charles Schwab by 694.1% in the 1st quarter. AQR Capital Management LLC now owns 2,358,310 shares of the financial services provider's stock valued at $182,651,000 after buying an additional 2,061,332 shares in the last quarter. Finally, Atalanta Sosnoff Capital LLC boosted its holdings in shares of Charles Schwab by 2.3% in the 1st quarter. Atalanta Sosnoff Capital LLC now owns 806,385 shares of the financial services provider's stock valued at $63,124,000 after buying an additional 18,380 shares in the last quarter. 84.38% of the stock is currently owned by hedge funds and other institutional investors.

Charles Schwab Trading Down 0.1%

NYSE SCHW opened at $96.06 on Thursday. The Charles Schwab Corporation has a 12-month low of $61.16 and a 12-month high of $99.59. The company has a fifty day simple moving average of $94.99 and a two-hundred day simple moving average of $86.13. The company has a current ratio of 0.55, a quick ratio of 0.55 and a debt-to-equity ratio of 0.47. The stock has a market cap of $174.36 billion, a P/E ratio of 25.82, a P/E/G ratio of 0.94 and a beta of 0.96.

Charles Schwab (NYSE:SCHW - Get Free Report) last announced its quarterly earnings data on Friday, July 18th. The financial services provider reported $1.14 earnings per share for the quarter, beating analysts' consensus estimates of $1.10 by $0.04. Charles Schwab had a net margin of 33.68% and a return on equity of 19.30%. The firm had revenue of $5.85 billion for the quarter, compared to analyst estimates of $5.64 billion. During the same period in the previous year, the company earned $0.73 earnings per share. The business's quarterly revenue was up 24.8% compared to the same quarter last year. On average, analysts forecast that The Charles Schwab Corporation will post 4.22 earnings per share for the current year.

Charles Schwab announced that its board has authorized a share buyback program on Thursday, July 24th that allows the company to repurchase $20.00 billion in outstanding shares. This repurchase authorization allows the financial services provider to reacquire up to 11.6% of its stock through open market purchases. Stock repurchase programs are typically a sign that the company's board of directors believes its shares are undervalued.

Charles Schwab Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Friday, August 22nd. Stockholders of record on Friday, August 8th were issued a $0.27 dividend. The ex-dividend date of this dividend was Friday, August 8th. This represents a $1.08 dividend on an annualized basis and a dividend yield of 1.1%. Charles Schwab's dividend payout ratio is currently 29.03%.

Insider Transactions at Charles Schwab

In other Charles Schwab news, insider Jonathan S. Beatty sold 6,144 shares of the firm's stock in a transaction that occurred on Thursday, August 28th. The shares were sold at an average price of $96.81, for a total transaction of $594,800.64. Following the completion of the transaction, the insider directly owned 11,923 shares of the company's stock, valued at approximately $1,154,265.63. This trade represents a 34.01% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, Chairman Walter W. Bettinger sold 173,876 shares of Charles Schwab stock in a transaction that occurred on Tuesday, July 29th. The shares were sold at an average price of $98.84, for a total transaction of $17,185,903.84. Following the sale, the chairman owned 590,734 shares of the company's stock, valued at approximately $58,388,148.56. The trade was a 22.74% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last 90 days, insiders sold 298,214 shares of company stock valued at $29,022,580. 6.30% of the stock is owned by company insiders.

Analyst Ratings Changes

Several research analysts recently commented on SCHW shares. William Blair lowered shares of Charles Schwab from a "strong-buy" rating to a "hold" rating in a research note on Thursday, July 3rd. Cowen reaffirmed a "buy" rating on shares of Charles Schwab in a report on Tuesday, May 20th. JMP Securities upped their price target on Charles Schwab from $106.00 to $110.00 and gave the stock a "market outperform" rating in a research report on Monday, July 21st. Raymond James Financial reissued an "outperform" rating and issued a $99.00 price objective on shares of Charles Schwab in a research report on Friday, July 18th. Finally, Piper Sandler boosted their target price on Charles Schwab from $80.00 to $92.00 and gave the stock a "neutral" rating in a research note on Tuesday, July 15th. Sixteen investment analysts have rated the stock with a Buy rating, three have given a Hold rating and two have given a Sell rating to the stock. Based on data from MarketBeat, Charles Schwab presently has a consensus rating of "Moderate Buy" and an average target price of $99.60.

Charles Schwab Profile

The Charles Schwab Corporation, together with its subsidiaries, operates as a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody, and financial advisory services in the United States and internationally. The company operates in two segments, Investor Services and Advisor Services.

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