Do Hedge Funds Love Discover Financial Services (DFS)?

As one would reasonably expect, key hedge funds were breaking ground themselves. Stevens Capital Management, managed by Matthew Tewksbury, created the biggest position in Discover Financial Services (NYSE:DFS). The fund had $16.1 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also initiated a $12.4 million position during the quarter. The following funds were also among the new DFS investors: Ken Griffin’s Citadel Investment Group, Sharif Siddiqui’s Alpenglow Capital, and Alec Litowitz and Ross Laser’s Magnetar Capital.

Let’s check out hedge fund activity in other stocks similar to Discover Financial Services (NYSE:DFS). We will take a look at Corning Incorporated (NYSE:GLW), Mylan Inc. (NASDAQ:MYL), Aviva Plc (ADR) (NYSE:AV), and HP Inc. (NYSE:HPQ). This group of stocks’ market valuations match DFS’s market valuation.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $944 million. That figure was $671 million in DFS’s case. Mylan Inc. (NASDAQ:MYL) is the most popular stock in this table. On the other hand Aviva Plc (ADR) (NYSE:AV) is the least popular one with only 5 bullish hedge fund positions. Discover Financial Services (NYSE:DFS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MYL might be a better candidate to consider a long position.

Disclosure: none.