Madison Investments, an investment advisor, released its “Madison Investors Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund was up 6.5% compared to a 7.5% return for S&P 500 Index benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Madison Investors Fund highlighted stocks like U.S. Bancorp (NYSE:USB) in the first quarter 2023 investor letter. Headquartered in Minneapolis, Minnesota, U.S. Bancorp (NYSE:USB) is a financial service holding company. On April 14, 2023, U.S. Bancorp (NYSE:USB) stock closed at $34.97 per share. One-month return of U.S. Bancorp (NYSE:USB) was 6.13%, and its shares lost 33.66% of their value over the last 52 weeks. U.S. Bancorp (NYSE:USB) has a market capitalization of $53.567 billion.
Madison Investors Fund made the following comment about U.S. Bancorp (NYSE:USB) in its Q1 2023 investor letter:
“U.S. Bancorp (NYSE:USB) shares are ensnared in the bank-run panic that began late in the quarter. Two large banks failed in early March as depositors rushed to withdraw money on concerns that the banks would suffer from liquidity problems. That’s a self-fulfilling prophecy, of course, but in the case of the two banks, it was prompted by the revelations of utter mismanagement of their securities portfolio. Bank models are, essentially, to borrow short and lend long. This sounds dangerous of course, and it would be if not for the deposit guarantee provided by the FDIC. The history of the U.S. banking system can be divided into two eras – pre-FDIC, when bank runs were fairly common, and post-FDIC, when bank runs have been close to non-existent. However, FDIC protection has its limits, and it remains incumbent on management to properly manage its assets and liabilities. The two banks in question didn’t do that. By taking down the share prices of all banks, we think investors are shooting first and asking questions later; they are not distinguishing between the strong and the weak.
U.S. Bancorp, as one of the largest and best-managed banks in the country, appears to be a net beneficiary so far of the panic among some depositors, with a pick-up in net deposit inflows in recent weeks. We don’t dismiss the probability of industry contagion – in a true nationwide panic, the big banks will suffer along with the small banks, and the well-managed ones will suffer along with the badly-managed ones. But we think the odds of that are quite small, and recent steps by federal regulators confirm that they will do everything in their power to prevent such a scenario, given the calamitous impact that it would have on our economy. We tightly manage this risk by limiting our exposure to the banking sector.”
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U.S. Bancorp (NYSE:USB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held U.S. Bancorp (NYSE:USB) at the end of the fourth quarter which was 52 in the previous quarter.
We discussed U.S. Bancorp (NYSE:USB) in another article and shared the list of best 5% dividend stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q1 2023 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.
