5 Best Dow Stocks To Buy According To Hedge Funds

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 143

Visa Inc. (NYSE:V) is an American multinational financial services company from California. It enables the transfer of funds digitally on a global level, via Visa Inc. (NYSE:V) credit cards, debit cards, and prepaid cards. Visa Inc. (NYSE:V) is one of the world’s most valuable companies that was launched by the Bank of America in 1958. Visa Inc. (NYSE:V) is traded as a S&P 100 and DJIA Component, and is one of the most popular Dow stocks among hedge funds. 

As of the end of the third quarter, 143 hedge funds in Insider Monkey’s database of 867 elite funds reported owning stakes in Visa Inc. (NYSE:V), worth $26.1 billion. This is compared to 162 funds holding stakes valued at $27.6 billion in Visa Inc. (NYSE:V) in the preceding quarter

On October 26, Visa Inc. (NYSE:V) posted its Q3 financial results, announcing earnings per share of $1.62, up $0.08 as compared to estimates. Visa Inc. (NYSE:V)’s revenue came in at $6.56 billion, exceeding estimates by $45.89 million. 

UBS analyst Rayna Kumar on November 17 assumed coverage of Visa Inc. (NYSE:V) with a Buy rating and a $275 price target. The analyst noted that Visa Inc. (NYSE:V) trades at an attractive valuation and has a leading position in mature areas, along with share gains in many markets that will “drive low teens revenue growth and high teens EPS gains”.

Here is what Qualivian Investment Partners has to say about Visa Inc. (NYSE:V) in its Q3 2021 investor letter:

“What Attracts Us

Superior Business:

  • Wide moat business with high barriers to entry:

− Duopoly with top 2 players (Mastercard/VISA) owning 68% share of credit and 94% of debit transactions

− A double sided financial transaction network with scale on each end

  • High returns on equity (21.8%) and low levels of capital expenditure compared to sales (3.4%)
  • Recurring revenue stream:

⎼ Toll booth based on transaction volumes

  • Top security platform versus cyber fraud

Superior Reinvestment Opportunities:

  • Long Runway: Secular cash to electronic payment trends supporting double digit growth in demand for the foreseeable future

Superior Management / Capital Allocation:

  • Consistent deployment of excess cash flow towards value accretive acquisitions (V Europe), dividends and opportunistic share repos…” (Click here to see the full text)