Discover Financial Services (DFS) Surged in Q3
Middle Coast Investing, an investment advisor firm, released its third-quarter investor letter. A copy of the letter can be downloaded here. It was a frustrating quarter for the firm. The portfolio appreciated in the quarter but lagged the main indices and closer benchmarks. The portfolio’s price to earnings for the trailing 12 months (TTM) was 19.7. Cash and equivalents accounted for 17.1% of the portfolio at the end of the quarter, with an estimated average yield of 3%. This compares to 13.4% of the portfolio and a 3.9% yield at the end of Q2. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Middle Coast Investing highlighted stocks like Discover Financial Services (NYSE:DFS) in the third quarter 2024 investor letter. Discover Financial Services (NYSE:DFS) offers digital banking products and services, and payment services in the United States. The one-month return of Discover Financial Services (NYSE:DFS) was 9.51%, and its shares gained 56.26% of their value over the last 52 weeks. On October 7, 2024, Discover Financial Services (NYSE:DFS) stock closed at $144.06 per share with a market capitalization of $35.891 billion.
Middle Coast Investing stated the following regarding Discover Financial Services (NYSE:DFS) in its Q3 2024 investor letter:
"The good transitions tend to tie back to the macroeconomy. Financial companies are seen as the big winners in a soft landing. Each of our winners have good things happening with them, too. Discover Financial Services (NYSE:DFS) is cleaning up many of its problems from the past few years. Whether or not its deal with Capital One goes through, Discover’s business has gotten much stronger in the past six months."
A business professional in a suit swiping their credit card at the store.
Discover Financial Services (NYSE:DFS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held Discover Financial Services (NYSE:DFS) at the end of the second quarter which was 71 in the previous quarter. In the second quarter, Discover Financial Services (NYSE:DFS) reported $1.5 billion in net income, a 70% increase from Q2 2023. While we acknowledge the potential of Discover Financial Services (NYSE:DFS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Discover Financial Services (NYSE:DFS) and shared the list of best digital payments stocks to buy. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.