5 “Great” Earnings Reports Jim Cramer is Talking About

2. Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 177

Visa Inc. (NYSE:V) is one of the “great” earnings reports that Jim Cramer is talking about. He noted that the company “reported its usual strong results” and said that he would be a buyer of the stock as “its an amazing way to play the reversion to sanity in the fintech space”.

Visa Inc. (NYSE:V) delivered a market beating quarter. The company reported earnings for the fiscal second quarter of 2023, on April 25. The company reported earnings per share of $2.09 and outperformed EPS estimates by $0.10. The company’s revenue for the quarter amounted to $7.99 billion, up 11.07% year over year and ahead of Wall Street expectations by $194.11 million. Shares of Visa Inc. (NYSE:V) have gone up by 11.85% over the past 6 months, as of May 12.

Visa Inc. (NYSE:V) was held by 177 hedge funds at the end of Q4 2022. These funds held positions worth $22.4 billion in the company. As of December 31, TCI Fund Management is the top shareholder in the company and has a stake worth $4.1 billion.

Polen Capital 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.”

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