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Oakmark Funds’ Bill Nygren said he favors bigger banks in the financial sector, and the top value investor broke down why he particularly likes Charles Schwab. “I think bigger has been better in financials for a long time,” Nygren said on CNBC’s ” Squawk on the Street. ” “The economic advantage that those banks have just allows the large banks to either be more profitable, take less risk or offer more services to their clients than the smaller banks can.” Worries about the banking system deepened in March after closures of Silicon Valley Bank and Signature Bank , and capital issues at Credit Suisse and First Republic . Nygren, who owns Wells Fargo, Capital One, Bank of America and Schwab, believes larger banks are more insulated from these balance sheet issues. “Even though they have some of the long term investments that got SVB in trouble, we think they have very seasoned deposits that are likely to be inside of those institutions for a very, very long time,” Nygren said. “That makes it appropriate to have longer term assets.” Nygren is one of the best-performing value managers on Wall Street with decades of experience. He has been the manager of the Oakmark Select Fund since 1996 and the Oakmark Fund since 2000. SCHW YTD mountain Schwab Nygren said he is especially bullish on Schwab because it’s the lowest cost provider for wealth management services. “Schwab’s business model has been to give the customer more and more for free and they make their money on the transactional cash that’s sitting in those accounts,” Nygren said. “It’s an exceptionally well managed company.” The portfolio manager also noted that Schwab insiders have been active buyers of the stock in the past few weeks.
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