Longleaf Partners Fund: “We Believe Discovery (DISCA) is Obvious”

Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, published its “Longleaf Partners Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. Longleaf Partners Fund added 6.18% in the fourth quarter, taking returns for the full year to 23.58%, well ahead of its absolute return goal. However, the S&P 500 rallied 11.03% in the fourth quarter, taking the index’s full-year returns to 28.71%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Longleaf Partners Fund, in its Q4 2021 investor letter, mentioned Discovery, Inc. (NASDAQ: DISCA) and discussed its stance on the firm. Discovery, Inc. is a New York, New York-based mass media company with a $14.2 billion market capitalization. DISCA delivered a 19.97% return since the beginning of the year, while its 12-month returns are down by -46.75%. The stock closed at $28.24 per share on February 25, 2022.

Here is what Longleaf Partners Fund has to say about Discovery, Inc. in its Q4 2021 investor letter:

“While our largest holdings received at least a little market appreciation, our detractors were unreasonably punished based on headline-level misunderstandings. Discovery Communications is grouped with dying legacy media stocks, and many market participants are sitting this one out until the plan for the merged Warner Bros. Discovery is obvious. We believe Discovery is obvious. We view this as an opportunity and would also note that Discovery’s sharp stock price rally to begin 2022 indicates that at least some of the late year selling pressure might have been tax loss-selling or just plain capitulation.”

Our calculations show that Discovery, Inc. (NASDAQ: DISCA) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. DISCA was in 42 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 42 funds in the previous quarter. Discovery, Inc. (NASDAQ: DISCA) delivered a 14.24% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on DISCA in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.