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Grisanti Brown & Partners’ Top Bets Show ‘Bullishness’ on Finance Sector

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The Harvard Law School graduate Chris Grisanti co-founded the multi billion dollar hedge fund Grisanti Brown & Partners in 1999. The firm makes long term investments in the equity markets on the back of extensive research. At the end of the first quarter the energy and finance sectors each represented about 19% of the firm’s 13F portfolio, while the energy and healthcare sectors each constituted about 18% of this portfolio value. Retail investors looking to diversify their portfolios could get profitable ideas from the fund’s holdings. However, the top picks have become finance-focused after the fund managers adjusted the equity portfolio in the first quarter. Given that the companies operating in the sector are down by about 5% on average since the start of this year, these picks could serve as prudent value investments.

Our research determined that following the small-cap stocks, that hedge funds are collectively bullish on, can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

#5 Mastercard Inc (NYSE:MA)

– Shares Owned by Grisanti Brown & Partners (as of March 31): 147,200

– Value of Holding (as of March 31): $13.91 Million

After being boosted by 48% during the first three months, Grisanti Brown & Partners’ Mastercard Inc (NYSE:MA) holding represented about 6.6% of the fund’s equity portfolio. Among other hedgies who were also bullish on the $105 billion credit services company during the same period were David Harding of Winton Capital Management and Barry Dargan of Intermede Investment Partners. Both funds raised their stake in Mastercard by 210% and 41% respectively. In the recently released first-quarter financial results Mastercard Inc (NYSE:MA) managed to beat both top and bottom line estimates despite currency headwinds which manged to drag down the profits as compared to the year-ago level. While EPS of $0.86 beat expectations by $0.01, revenue of $2.45 billion was $70 million ahead of estimates. The stock is now trading at just around 5% below its all time high.

 

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#4 Synchrony Financial (NYSE:SYF)

– Shares Owned by Grisanti Brown & Partners (as of March 31): 491,900

– Value of Holding (as of March 31): $14.10 Million

Grisanti Brown & Partners significantly boosted this bet on the finance sector by 41%. Since the spinoff from General Electric in 2014, Synchrony Financial (NYSE:SYF)’s stock price is up by over 30%. However, it is down by a little over 1% so far this year, even though the company’s first quarter EPS of $0.7 beat expectations by $0.01 and revenues of $3.21 billion were $40 million ahead of consensus estimates. The consumer lending company has grown its deposit base by $10 billion over the last year’s number showing a promising level of growth. Synchrony Financial also recently launched the Citgo card program and also a new value proposition at Walmart – 3-2-1 save cashback program. First Eagle Investment Management raised its Synchrony Financial (NYSE:SYF) holding by 11% during the first quarter to 11.62 million shares.

 

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#3 Medtronic PLC (NYSE:MDT)

– Shares Owned by Grisanti Brown & Partners (as of March 31): 188,700

– Value of Holding (as of March 31): $14.15 Million

The fund has held a position in Ireland-based helathcare company since the third quarter of 2015. In the first trimester the stake was slightly trimmed by 1%. Medtronic PLC (NYSE:MDT) recently hired Karen L. Parkhill as its new chief financial officer as Gary Ellis, the former CFO is seeking to retire following Medtronic’s recent acquisition of Covidien, which he helped to materialize. The stock price of the medical equipment company has rallied by about 4.7% so far this year. Among the new bulls supporting Medtronic PLC (NYSE:MDT)’s camp is Eric Sprott‘s Sprott Asset Management, which initiated a stake containing 727,900 shares during the January-March period.

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