1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 165
Visa Inc. (NYSE:V) is the world’s largest payment processor. It handled about $15 trillion in total volume in fiscal 2023. The firm handles transactions in more than 160 currencies and operates in more than 200 countries. Its systems can handle more than 65,000 transactions in a second. In 2024, the stock increased by about 18%, making it the best financial stock.
Visa Inc. (NYSE:V) is typically connected with credit and debit cards; however, it does not issue or manage any of these accounts. To issue Visa-branded cards, it solely collaborates with banks and other financial institutions; accounts are managed by their partners.
In Q4 of 2024, the company reported a 12% year-over-year growth in net revenue of $9.6 billion, with a 16% increase in earnings per share. Expectations were met as net sales expanded by 10% and EPS improved by 15% over the fiscal year. The company reported considerable growth in new flows, with revenue up 22% year on year in constant dollars, driven by a rise of 38% in Visa Direct transactions. Revenue from value-added services increased by 22% in constant dollars as well. Visa secured 650 new business partnerships while expanding and renewing important ones, such as deals with Grupo Promerica, SMCC, Alrajhi, Standard Chartered Bank, RBC, Americas Bank, and USAA. Innovations in payment solutions, including the forthcoming Flexible Credential solution and Visa A2A for account-to-account payments, highlight the company’s dedication to technical advancement. Furthermore, in fiscal 2024, there were over 2 billion tap-to-ride transactions globally, a 25% increase from the previous year, showing Visa Inc. (NYSE:V)’s dominance in contactless payments.
Wells Fargo maintained its Overweight rating on Visa Inc. (NYSE:V) shares and increased its price objective from $325 to $360. The company is optimistic about consumer finance companies based on the Q4 results, stating that there are regulatory catalysts and that consumer metrics are trending stronger. In a research report, the analyst informs investors that modestly increased interest rates do not dissuade stocks or fundamentals. Wells believes with “high conviction the rally is to resume for the card issuer and network stocks.”
Chris Hohn’s TCI Fund Management was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 16.80 million shares worth $4.62 billion as of Q3.
Qualivian Investment Partners stated the following regarding Visa Inc. (NYSE:V) in its Q3 2024 investor letter:
“Visa Inc. (NYSE:V): FQ3 2024 revenues and EPS came inline versus consensus estimates with revenue and EPS growing 10% and 12% respectively. Payment volume increased by 7% and the highly profitable cross border volume increased by 14%. Operating margins at 67.1% missed consensus expectations at 67.4%. Management’s commentary on consumer spending for the back half of 2024 suggested a cautious but stable backdrop. Similar to our thoughts on MA, while we do not view V as immune to the macro backdrop, we continue to expect that over the longer term, it will continue to drive and benefit from the digitization of payments globally.
Overall, Visa Inc. (NYSE:V) ranks first on our list of the 10 Best Financial Stocks To Buy According to Hedge Funds. While we acknowledge the potential for V to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than V but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. 10 Best Financial Stocks To Buy According to Hedge Funds is originally published on Insider Monkey. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.