The third quarter 2023 investor letter for the “Davis New York Venture Fund” was produced by investment management company Davis Funds; a copy of the letter can be accessed here. From July 31, 2023, until the completion of the first seven months, the fund generated a return of 25.38%. The fund’s recent performance is consistent with the easy-money bubble bust, which started after the financial crisis and grew worse throughout the epidemic. Examine the fund’s top five holdings for a brief overview of their main investing strategies for 2023.
Davis New York Venture Fund discussed U.S. Bancorp (NYSE:USB) and provided insights into the firm in an investor letter dated Q3 2023. With a $55.2 billion market value, U.S. Bancorp (NYSE:USB) is a financial services business headquartered in Minneapolis, Minnesota. Over the course of the year, U.S. Bancorp (NYSE:USB) has returned -18.62%, while its 12-month returns have decreased by -17.14%. The stock’s closing price on November 3, 2023 was $35.49 per share.
A few prominent regional banks that we did not control failed in a matter of weeks in the spring of 2023. Conversely, the few, sizable banks we own—such as U.S. Bancorp—saw an increase in profitability and deposit inflows, supporting our contention that reputable financial services firms continue to be among the most alluring and misunderstood segments of the market. This stress test simulates a severe recession that is noticeably worse than the global financial crisis that occurred between 2008 and 2009. It comprises a 10% unemployment rate, a 3.5% loss in the gross domestic product, a 40% decline in commercial real estate, a 37% decline in residential real estate, and a 55% decline in the stock market.
For years to come, DNYVF’s market share gains and growth should be propelled by its ability to withstand economic storms and its established branding and technological economies of scale. Our investments in the banking industry, including U.S. Bancorp, are trading at some of the lowest values in the market and should be increased in value over time. While we wait, value is created by rising dividends and dwindling share base.
According to our calculations, U.S. Bancorp (NYSE:USB) did not qualify for our ranking of the 30 Most Preferred Stocks by Hedge Funds. By the end of the second quarter of 2023, U.S. Bancorp (NYSE:USB) was included in 42 hedge fund portfolios as opposed to 48 funds the previous quarter. The last three months saw a -10.96% return from U.S. Bancorp (NYSE:USB). On our page of hedge fund investor letters for Q3 2023, you may discover further investor letters from notable investors and hedge funds.