Phill Gross and Robert Atchinson‘s Adage Capital Management has inched up its stake in Meridian Bancorp, Inc. (NASDAQ:EBSB) by acquiring some 141,900 shares according to a new 13G filing. The stake now consists of 2.79 million shares valued at $36.40 million, based on current trading levels, and represents 5.07% of the company’s outstanding stock.
The Gross and Atchinson duo was a star performer at the Harvard Management Company (HMC) before launching their own fund in 2001. Gross, who spent 18 years at HMC, started out as a healthcare and retail analyst and later became a partner. Adage currently has about $48.2 billion worth of assets under management and the market value of its public equity portfolio stood at $41.02 billion at the end of the first quarter. The portfolio is fairly diversified with its top ten holdings constituting about 13.8% of the portfolio value. The finance sector accounted for 13% of the holdings, with the fund’s other top finance picks being JPMorgan Chase & Co. (NYSE:JPM), and Citigroup Inc (NYSE:C), which we’ll get to later. So far this year, the sector is up by more than 10%.
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Adage has held a position in Meridian Bancorp, Inc. (NASDAQ:EBSB) since the third quarter of 2014. The $712 million company is a holding company for East Boston Savings Bank and held its IPO in July of last year. The savings bank founded in 1848 is a Massachusetts chartered stock savings bank. Currently the company operates 27 service branches. In its latest financial results, Meridian Bancorp, Inc. (NASDAQ:EBSB) delivered an EPS which was in-line with the estimates and revenues that beat expectations. Since its IPO, the stock has climbed by more than 23%. In comparison, the savings & cooperative banks industry has risen by about 16% during the same period. Among Meridian Bancorp, Inc. (NASDAQ:EBSB)’s investors among the funds we track is Emanuel J. Friedman‘s EJF Capital, which is the second-largest stockholder of Meridian Bancorp, Inc. (NASDAQ:EBSB) after Adage Capital, holding about 2.0 million shares valued at $26.34 million.
During the first quarter Adage hiked its stake in JPMorgan Chase & Co. (NYSE:JPM) by 26% to 5.93 million shares valued at $359.35 million. JPMorgan Chase & Co. (NYSE:JPM)’s stock has appreciated by almost 10% year-to-date, outperforming the global banks industry, which has gained 4.11% during the same period. The $252.87 billion financial holding company has been in the fund’s portfolio since the fourth quarter of 2001. Following a 20% increase in revenue from its fixed income, currencies and commodities (FICC) unit during the first quarter, JPMorgan Chase & Co. (NYSE:JPM) has climbed to the top spot on the global FICC rankings. Following it were Citigroup Inc (NYSE:C), Goldman Sachs, and Deutsche Bank. During the first quarter, the hedge fund interest in JPMorgan increased, as 95 firms had an aggregate investment of $7.64 billion at the end of March compared to 92 funds with $7.06 billion invested at the end of the previous quarter. Paul Ruddock and Steve Heinz’s Lansdowne Partners is the largest stockholder of JPMorgan Chase & Co. (NYSE:JPM) among them, owning 20.68 million shares valued at $1.25 billion.
After a 2% increase in its Citigroup Inc (NYSE:C) holding during the first quarter, Adage held some 4.8 million shares valued at $247.40 million in the $172 billion financial services holding company. Recently Goldman Sachs upgraded the stock to ‘Buy’ from ‘Neutral’, increasing its price target to $61 from $57. Analyst Richard Ramsden believes that the market is undervaluing the extent to which Citigroup Inc (NYSE:C) can improve its Return on Assets (ROA) in the future by building up on its first quarter performance. However, the impact that the ROA improvement will have on the company Return on Equity will be limited given the company’s deleveraging efforts. Currently, Citi has a total debt-to-equity ratio of 197.23, compared to the industry’s average of 55.71. Boykin Curry‘s Eagle Capital Management is the largest shareholder of Citigroup Inc (NYSE:C) within our database, owning some 26.35 million shares valued at $1.36 billion.
Disclosure: None
