In this article, we discuss the 5 best fintech stocks to buy now. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Fintech Stocks To Buy Now.
5. Fiserv, Inc. (NASDAQ:FISV)
Number of Hedge Fund Holders: 72
Fiserv, Inc. (NASDAQ:FISV) stock has jumped in recent weeks after ValueAct Capital, an activist hedge fund, acquired a stake in the company, with Bloomberg reporting that the hedge fund believed that the firm was a direct rival of payments firm Square and growing at a faster rate. The fund predicts that the company could be worth $185 billion by 2024. For context, the market cap of the firm is presently around $65 billion.
Fiserv, Inc. (NASDAQ:FISV) recently posted earnings for the third quarter, reporting earnings per share of $1.47, beating market estimates by $0.02. The revenue over the period was $4.1 billion, up close to 10% year-on-year and beating predictions by $60 million.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Harris Associates is a leading shareholder in Fiserv, Inc. (NASDAQ:FISV) with 12 million shares worth more than $1.2 billion.
In its Q1 2021 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and Fiserv, Inc. (NASDAQ:FISV) was one of them. Here is what the fund said:
“This quarter we researched several new stock ideas, but because of high prices, acted on only one. Thus, a new portfolio name is Fiserv, with corporate headquarters in Brookfield, WI, just down I-94 from us. Fiserv is a technology company serving financial institutions (“FIs”) and retail merchants. It has two main business lines. In the first, it’s a market leader in outsourced IT solutions for banks and credit unions, online and mobile banking technology, digital money movement solutions, and card issuing services. Fiserv’s second core business is merchant acquiring and processing, where it’s a leader in providing a variety of solutions to help all types of merchants accept digital payments. They entered this business through the acquisition of First Data in 2019.
Within the first business, Fiserv’s software is critical to the daily operations of FI clients. Their solutions not only provide the vital central processing systems, but also enable services such as electronic bill pay and digital money transfers at both large institutions and local banks and credit unions alike. As such, it is an incredibly sticky business that is resilient through economic cycles. On the merchant acquiring side of Fiserv, they process trillions of dollars annually for millions of merchant clients. Their solutions cater to all types of merchants and optimize for seamless acceptance and high authorization rates while also limiting fraud. Similar to the IT outsourcing business, Fiserv’s merchant solutions are critical to their customers’ daily operations. Furthermore, we are especially encouraged by their investments in new solutions, particularly Clover and Carat. Clover is a small and midsize business merchant acquiring platform and Carat is an e-commerce acquiring platform. Both these products hit the bullseye in terms of the way people are interacting with the retail industry, and both are growing at above market rates, which we believe will sustain into the future.
In addition to Fiserv’s favorable business characteristics and competitive positioning, the management team, led by CEO Frank Bisignano, has a track record of successfully investing for growth, improving profitability, and intelligently allocating excess capital. We believe these value-creating activities will continue going forward.
Financial institutions are increasingly making investments to digitize…” [read entire letter here]
