Large Investor Dumps Schwab Stock

Charles Schwab (NYSE:SCHW) wasn’t immune from the tumult that hit bank stocks over the last month or so. It may have had a plan to survive the worst of things, and it may have taken some unexpected analyst hits, but the latest news might have been the unkindest cut. Charles Schwab shares slipped once more after news emerged that one of its largest shareholders dumped its shares.

GQG Partners held $1.4 billion worth of Schwab stock last month. Today, it holds nothing in Schwab. GQG sold off the entire $1.4 billion, which is almost a bizarre move given how Schwab could have readily weathered the storm that was hitting banks all along the spectrum. But GQG’s head of international, Mark Barker, revealed just why GQG dumped all its Schwab shares. Barker noted that there, indeed, was no “existential risk,” but the “sentiment around banks” proved a major issue at the time.

Indeed, Barker also noted that Schwab stood to lose—and still stands to lose—significant deposit revenue thanks to clients moving their accounts and their contents to money-market funds. Schwab, not surprisingly, didn’t want to comment about the issue, the Financial Times noted. But with Schwab poised to report results this Monday, we’ll find out just how bad the damage was and whether or not GQG’s approach was justified.

Meanwhile, analyst consensus calls Schwab stock a Moderate Buy with 13 Buy ratings, four Holds, and one Sell. It also comes with 47.77% upside potential, thanks to its average price target of $74.83.

Disclosure