Davis Funds, an investment management firm, released its “Davis New York Venture Fund” third quarter 2023 investor letter, a copy of which can be downloaded here. During the initial seven months, ending on July 31, 2023, the fund yielded a return of 25.38%. This recent performance of the fund aligns with the burst of the easy-money bubble, which originated in the wake of the financial crisis and gained momentum throughout the pandemic. Take a moment to review the fund’s top 5 holdings to gain insights into their primary investment choices for 2023.
In its Q3 2023 investor letter, Davis New York Venture Fund mentioned Capital One Financial Corp. (NYSE:COF) and explained its insights for the company. Capital One Financial Corp. (NYSE:COF) is a McLean, Virginia-based bank holding company with a $40.4 billion market capitalization. Capital One Financial Corp. (NYSE:COF) delivered a 14.37% return since the beginning of the year, while its 12-month returns are up by 3.70%. The stock closed at $106.32 per share on November 3, 2023.
Here is what Davis New York Venture Fund has to say about Capital One Financial Corp. (NYSE:COF) in its Q3 2023 investor letter:
“In spring 2023, a number of high-profile regional banks, none of which we owned, collapsed over the course of a few weeks. In contrast, the select, large banks we own, including Capital One Financial, actually saw deposit inflows and increasing profits, reinforcing our thesis that high-quality financial services companies remain among the most misunderstood and attractive sectors of the market. This stress test models a dramatic recession—one meaningfully worse than the great financial crisis of 2008-2009. It includes a 3.5% decline in gross domestic product, a 10% unemployment rate, a 37% decline in residential real estate, a 40% decline in commercial real estate and a 55% decline in the stock market. The resilience and strength required to weather such an economic storm combined with proven economies of scale in branding and technology should drive DNYVF market share gains and growth for years to come. Trading at some of the lowest valuations in the market, our financial sector holdings—such as Capital One Financial, deserve to be revalued upwards over time. In the meantime, increasing dividends and a shrinking share base create value while we wait.”
A banker helping an elderly customer understand the finer details of a deposit product.
Our calculations show that Capital One Financial Corp. (NYSE:COF) failed to make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Capital One Financial Corp. (NYSE:COF) was in 51 hedge fund portfolios at the end of the second quarter of 2023, compared to 53 funds in the previous quarter. Capital One Financial Corp. (NYSE:COF) delivered a -6.23% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q3 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.
