Hedge Funds Are Betting On Discover Financial Services (DFS)

Page 2 of 2

As one would reasonably expect, some big names were leading the bulls’ herd. TPG-AXON Management LP, managed by Dinakar Singh, initiated the biggest position in Discover Financial Services (NYSE:DFS). TPG-AXON Management LP had $91.8 million invested in the company at the end of the quarter. Ross Margolies’ Stelliam Investment Management also initiated a $39.9 million position during the quarter. The other funds with brand new DFS positions are Joshua Nash’s Ulysses Management, Porter Collins, Daniel Moses, and Vincent Daniel’s Seawolf Capital, and Steve Cohen’s Point72 Asset Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Discover Financial Services (NYSE:DFS) but similarly valued. We will take a look at Waste Management, Inc. (NYSE:WM), Activision Blizzard, Inc. (NASDAQ:ATVI), Fiat Chrysler Automobiles NV (NYSE:FCAU), and Chipotle Mexican Grill, Inc. (NYSE:CMG). This group of stocks’ market values are closest to DFS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WM 31 1359476 0
ATVI 43 2087134 -3
FCAU 34 1179659 -1
CMG 28 1099623 -8

As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $1431 million. That figure was $1901 million in DFS’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Chipotle Mexican Grill, Inc. (NYSE:CMG) is the least popular one with only 28 bullish hedge fund positions. Compared to these stocks Discover Financial Services (NYSE:DFS) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Page 2 of 2