1. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 144
Mastercard Incorporated (NYSE:MA) is one of Warren Buffett’s oldest positions, with the billionaire first investing in the company back in Q1 2011. In the fourth quarter of 2021, Berkshire cut its stake in Mastercard Incorporated (NYSE:MA) by 8%, holding close to 4 million shares worth $1.4 billion.
On March 7, Mastercard Incorporated (NYSE:MA) announced a 5-year global partnership with Zeta, a fintech unicorn specializing in next-generation credit card processing. The companies will jointly launch credit cards to banks and fintechs worldwide on Zeta’s modern credit processing stack, integrated with Mastercard Incorporated (NYSE:MA)’s digital issuance and loyalty solutions.
Mastercard Incorporated (NYSE:MA) declared on February 8 a $0.49 per share quarterly dividend. The dividend will be paid on May 9, to shareholders of record on April 8.
Tigress Financial analyst Ivan Feinseth raised the price target on Mastercard Incorporated (NYSE:MA) to $472 from $460 and reiterated a Strong Buy rating on the shares on March 4, given the company’s “strong” Q4 results as consumer spending remained strong regardless of omicron headwinds.
Akre Capital Management is the largest Mastercard Incorporated (NYSE:MA) shareholder as of the close of Q4 2021, with 5.8 million shares worth $2.10 billion. Overall, 144 hedge funds were long Mastercard Incorporated (NYSE:MA) at the end of December 2021.
Here is what VGI Partners has to say about Mastercard Incorporated (NYSE:MA) in its Q4 2021 investor letter:
“Mastercard has been a core constituent of the VGI Partners global strategy since 2009. Mastercard is a global payments processor and in an effective duopoly with Visa. The industry benefits from a strong secular trend toward electronic payments over cash and cheques and the COVID pandemic has accelerated this shift.
Mastercard’s share price increased +1% in calendar 2021 despite more than 25% earnings growth. This was due to Mastercard’s market multiple de-rating due to short-term concerns about cross-border volumes and long-term concerns about disintermediation from fintechs such as PayPal and Square (see the chart below showing Mastercard’s EV/EBITDA multiple during 2021 de-rating from >30x to ~26x).
Whilst the full recovery in cross-border travel has been delayed by the onset of Delta and Omicron, we believe there is significant pent-up demand for travel and that cross-border transaction volumes can exceed 2019 levels by 2023.
Interchange fees have long been a point of contention between the payment processors and merchants so the news that Amazon UK would no longer accept Visa credit cards rekindled fears that there would be a race to the bottom in merchant discount rates. Amazon and Visa have since come to a resolution and we think it is highly unlikely that other merchants will take a similar step. Nevertheless, we are closely monitoring the situation for further developments…” (Click here to see the full text)
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