5 Best Ethical Companies to Invest in According to Reddit

3. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V) makes it to our list of the best ethical companies to invest in according to Reddit because it is the top holding of the Global Sustainability Leaders ETF, which is a popular ethical investing option among Redditors. The ETF tracks the performance of an index that consists of large companies known as “Climate Leaders.” These companies have no direct or significant exposure to fossil fuels and they are not engaged in “activities deemed inconsistent with responsible investment considerations.”

Visa Inc. (NYSE:V) saw a jump in hedge fund sentiment during the fourth quarter, as 177 hedge funds tracked by Insider Monkey ended the period with Visa shares in their portfolios, up from 165 hedge funds in the previous quarter. The biggest hedge fund stakeholder of Visa Inc. (NYSE:V) is Chris Hohn’s TCI Fund Management which owns a $4.1 million stake in the company.

Polen Global Growth Strategy made the following comment about Visa Inc. (NYSE:V) in its Q1 2023 investor letter:

“We trimmed Mastercard and Visa Inc. (NYSE:V) to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double[1]digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e[1]commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”