10 Best S&P 500 Stocks to Buy According to Hedge Funds

6) Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 142

Mastercard Incorporated (NYSE:MA) offers transaction processing and other payment-related products and services in the US and internationally.

Wall Street analysts opine that the continued expansion of Mastercard Incorporated (NYSE:MA)’s payment network revenue and accelerating growth of its value-added services should continue to support its long-term growth trajectory. The company’s strategic focus on VAS is a key differentiator and growth engine and this shift forms part of Mastercard Incorporated (NYSE:MA)’s strategy to diversify revenue streams and reduce cyclicality in the business model.

The company is well-placed to capitalize on the ongoing shift from cash to digital payments. Operating margins of Mastercard Incorporated (NYSE:MA) are expected to expand as a result of its scale, ongoing displacement of cash transactions, and roll-out of new service and technology offerings. Its VAS offerings, which consist of data analytics, cybersecurity solutions, and consulting services, have been experiencing quicker adoption.

As organizations look for comprehensive financial solutions, the company’s expanding suite of services places it as a one-stop shop for payment and data-driven business insights. Moreover, the acquisition of companies such as Recorded Future, which specializes in AI-powered analytics, improves Mastercard Incorporated (NYSE:MA)’s VAS capabilities. Analysts at Robert W. Baird increased their target price on the company’s shares from $545.00 to $575.00, giving an “Outperform” rating on 16^th October.

L1 Capital, an investment management firm, released its second-quarter 2024 investor letter. Here is what fund said:

“The share prices of Mastercard Incorporated (NYSE:MA) and Visa, both long term Fund investments, have both drifted down over recent months. There have been no dramatic developments, but there has been a general slight softening in the rate of growth of consumer spending in the U.S. and globally, a court decision rejecting Mastercard and Visa’s proposed settlement of a long-lasting dispute with U.S. merchants as well as other modest adverse regulatory developments. We continue to view Mastercard and Visa as two of the highest quality businesses in the world, and both are well placed to continue to deliver attractive, risk adjusted returns to shareholders over time.”