Levin Capital is a hedge fund that was founded in 200 and is managed by John A. Levin, a former manager of Levin Management and President of BKF Capital Group. The fund focuses mainly on large-cap stocks and uses a bottom-up strategy in establishing the value of its target stocks. Levin Capital has released its 13F for the June 30 reporting period, with the filing indicating that it has a public equity portfolio valued at $6.76 billion, up slightly from $6.68 billion at the end of the first quarter. The hedge fund boasts a diversified portfolio, having interests in healthcare, information technology, industrials, and finance, among other sectors. In this article, we focus on Discover Financial Services (NYSE:DFS), Corning Incorporated (NYSE:GLW), and McDonald’s Corporation (NYSE:MCD), which emerged as some of the fund’s biggest investments in the second quarter.
But before we dive deep into each of these three stocks, let’s first have a look at why Insider Monkey tracks hedge fund activity. We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 123% since then and outperformed the S&P 500 Index by around 65 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
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Let’s first look at Discover Financial Services (NYSE:DFS), which featured among Levin Capital’s top bullish plays during the second quarter of 2015. At the end of the quarter, the fund held a total of 2.83 million shares of the stock, with the holding having a value of $163.01 million, that after raising its position in the stock by 115%. The company was recently caught in a tussle with the Consumer Financial Protection Bureau after the body ordered it to pay $18.5 million relating to illegal practices touching on the collection and repayment of student loans. At the end of the second quarter of 2015, Winton Capital, managed by David Harding, held a total of 1.65 million shares of Discover Financial Services (NYSE:DFS) valued at $95.31 million, having bought 136,959 shares of the company during the second quarter. Matthew Tewksbury’s Stevens Capital Management was also long in the stock at the end of the quarter, holding 301,181 shares valued at $17.35 million after it sold 158,556 shares in the quarter.
