10 Best Stocks In Each Sector In 2024

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders in Q2 2024: 163

Visa Inc. (NYSE:V) is one of the biggest payments processing companies in the world. This is evidenced by its market share, which estimates suggest controls 61% of US payments volume. However, as cable and broadband companies are witnessing in the media and communications industry, emerging technologies can threaten Visa Inc. (NYSE:V)’s moat. Alternative payment services, which typically do not require a bank account and are often favored by merchants because of lower liability protections, can offer compelling alternatives to Visa Inc. (NYSE:V)’s products in the long term. However, these are long term trends, and the firm is taking some steps to ensure this doesn’t happen. It and Mastercard have agreed to a $30 billion settlement to address merchant complaints of high fees. However, the future of the deal is uncertain after a judge rejected it in June. Visa Inc. (NYSE:V) was also dealt a blow in September when the shares dropped by 3% after a Bloomberg report claimed that the DOJ was preparing to file an antitrust suit against it. Then, the shares dropped by 5.5% on the day that the Justice Department sued the company. Antitrust lawsuits take significant time to  play out, but their impact on investor sentiment is often immediate. Additionally, the stock’s performance depends on payment volumes, and if these drop, then Visa Inc. (NYSE:V)’s scale works against it as it struggles to fund its operating costs.

Aoris Management mentioned Visa Inc. (NYSE:V) in its Q2 2024 investor letter. Here is what the firm said:

“Visa operates the world’s largest payments network, which facilitates the movement of money between merchants, financial institutions, consumers, businesses, and governments.

The company is best known for enabling consumers to make debit and credit card payments. In the year to September 2023, 4.3 billion Visa cardholders made 213 billion transactions on its network, to a total value of US$12.1 trillion.

Compared to cash and cheques, which are still widely used around the world, Visa’s network is a more convenient, secure, and ubiquitous way for consumers to pay. Visa has invested to reduce friction and fraud in the payments experience, to the benefit of both merchants and consumers.”