Davis Funds, an investment management firm, published its “Davis Opportunity Fund” fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the year ended December 31, 2021, Davis Opportunity Fund delivered a return of 24.96%, reflecting real progress in the underlying business fundamentals across most of its holdings. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Davis Opportunity Fund, in its Q4 2021 investor letter, mentioned Capital One Financial Corporation (NYSE:COF) and discussed its stance on the firm. Founded in 1994, Capital One Financial Corporation (NYSE:COF) is a McLean, Virginia-based bank holding company with a $56.8 billion market capitalization, and is currently spearheaded by its CEO, Richard Fairbank. (company w/ ticker) delivered a -5.20% return since the beginning of the year, while its 12-month returns are up by 7.20%. The stock closed at $137.55 per share on March 17, 2022.
Here is what Davis Opportunity Fund has to say about Capital One Financial Corporation (NYSE:COF) in its Q4 2021 investor letter:
“The absolute level of revenues and profits generated by such companies is in fact so large that most of the major financial holdings in the portfolio produce enough annual operating income individually that a number of them could, in theory, purchase several entire businesses among hundreds of choices within the S&P 1500 Index, using just a year’s cash earnings without dipping into capital. This is theoretical, as financial companies would not be in the business of buying healthcare or technology companies, for example, but we point out these facts to illustrate the sheer scale of the economics produced by single financial companies in a given year, which is often a multiple of the cash earnings yielded by companies in a host of other industries.
Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund includes Capital One Financial.”
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Our calculations show that Capital One Financial Corporation (NYSE:COF) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Capital One Financial Corporation (NYSE:COF) was in 58 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 55 funds in the previous quarter. Capital One Financial Corporation (NYSE:COF) delivered a -7.07% return in the past 3 months.
In July 2021, we also shared another hedge fund’s views on Capital One Financial Corporation (NYSE:COF) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
