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Billionaire Alan Howard Going Crazy For Banks: Comerica Incorporated (CMA), JPMorgan Chase & Co. (JPM), More

Brevan Howard is a hedge fund co-founded by Alan Howard and Jean-Philippe Blochet in 2003, with the latter leaving the firm in 2009. Howard ranks number 35 on Forbes’ list of billionaires in the United Kingdom, having a real-time net worth of $1.65 billion. Howard’s fund had its first net loss for a year in 2014, incurring a loss of 0.8% after fees. The hedge fund had assets worth $32.8 billion under management at the end of that year. We decided to look at the stock investments of the firm and found it has a noticeable inclination towards the finance sector, with nearly 60% of its portfolio dedicated towards stocks from that sector. According to the recent 13F filing of Brevan Howard, the hedge fund reported an public equity portfolio holding $324.36 million in long positions. Some of its finance positions that we are going to look at in this post include Comerica Incorporated (NYSE:CMA), JPMorgan Chase & Co. (NYSE:JPM), Fifth Third Bancorp (NASDAQ:FITB), Zions Bancorporation (NASDAQ:ZION), and KeyCorp (NYSE:KEY).

Alan Howard

Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole. These small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Moreover, since the beginning of forward testing from August 2012, the strategy worked just as our research predicted, outperforming the market every year and returning 118% over the last 35 months, which is more than 60 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).

Alan Howard
Alan Howard
Brevan Howard

Comerica Incorporated (NYSE:CMA) is a new position in Brevan Howard’s equity portfolio, with the fund having ownership of 273,378 shares valued at $14.03 million. Comerica Incorporated is among the top 25 banking companies in the country and operates under three different segments: business banking, retail banking, and the wealth management department. The banking company missed the market’s earnings expectations when it announced its second quarter results on July 17, with its reported earnings per share of $0.74 coming up $0.02 short, although its revenues of $682 million came in $8.75 million higher than the analysts’ estimates. The smart money tracked by Insider Monkey maintains a bullish outlook on Comerica Incorporated (NYSE:CMA), with 39 hedge funds holding $792.38 million in shares of the company as of June 30 against previous quarter holdings worth $678.44 million from 32 hedge funds. The shares of the banking company improved by 13.72% during the second quarter, contributing to the elevated aggregate investments. Martin Whitman’s Third Avenue Management was the top stockholder of Comerica Incorporated (NYSE:CMA) at the end of the second quarter, holding a position worth $152.58 million for 2.97 million shares.

Alan Howard held 206,166 shares of JPMorgan Chase & Co. (NYSE:JPM) in his portfolio, with the investment valued at $13.97 million. The financial holding company was able to beat Wall Street’s earnings and revenue expectations for the second quarter, with earnings per share of $1.54 against market estimates of $1.44. JPMorgan Chase & Co. (NYSE:JPM)’s quarterly revenue of $24.53 billion was slightly above analysts’ expectations of $24.49 billion. In terms of hedge fund investments, 98 hedge funds in our database held positions worth $9.01 billion in the company on June 30, with the aggregate investments rising nearly 18% in comparison with the previous quarter. JPMorgan’s shares were up by 11.85% during the second quarter, contributing to part of that rise. Lansdowne Partners, led by Paul Ruddock and Steve Heinz, owned 21.16 million shares of JPMorgan Chase & Co. (NYSE:JPM) worth $1.43 billion at the end of the second quarter.

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