Turtle Creek Asset Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. Turtle Creek had a rather difficult year that culminated in the fourth quarter. Even though the firm ended the year in the black, it was far behind the indices. This was a complete reversal from 2023. In 2024, Turtle Creek’s portfolio business value increased by 14%, compared to a muted 3% increase in 2023. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Turtle Creek Asset Management emphasized stocks such as Discover Financial Services (NYSE:DFS). Discover Financial Services (NYSE:DFS) offers digital banking products and services, and payment services in the United States. The one-month return Discover Financial Services (NYSE:DFS) was -9.38%, and its shares gained 35.65% of their value over the last 52 weeks. On March 24, 2025, Discover Financial Services (NYSE:DFS) stock closed at $170.13 per share with a market capitalization of $42.806 billion.
Turtle Creek Asset Management stated the following regarding Discover Financial Services (NYSE:DFS) in its Q4 2024 investor letter:
“Two other companies that contributed positively to the flagship fund’s returns during 2024 happened to be the two most disappointing for us in terms of decisions taken by boards: Discover Financial Services (NYSE:DFS) and Berry Global. We wrote about Discover Financial last quarter so we won’t rehash things here, but we believe the board suboptimized long term value for shareholders through a variety of actions over the prior year and a half. If you are interest ed in more detail you can read about it here. Nevertheless, their actions resulted in a higher share price in the short term which we took advantage of to exit the position.”
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Discover Financial Services (NYSE:DFS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held Discover Financial Services (NYSE:DFS) at the end of the fourth quarter which was 69 in the previous quarter. In the fourth quarter, Discover Financial Services (NYSE:DFS) generated net income of $1.3 billion versus $366 million in the same-period last year. 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 top stocks to buy according to Balyasny Asset Management. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.