Let’s start with Mastercard Inc (NYSE:MA), in which 82 funds from our database reported long positions as of the end of September, unchanged over the quarter. However, the total value of their positions went up to $8.75 billion from $7.73 billion and represented around 5.60% of the company’s outstanding stock. A year earlier, there were 84 investors with stakes in Mastercard Inc (NYSE:MA) worth $7.48 billion in aggregate.
Earlier this month, Mastercard Inc (NYSE:MA) raised its quarterly dividend by 14% to $0.25 per share and approved a new $4 billion stock buyback program to be implemented after the current one is completed. On the other hand, the company’s finances might be affected by fines from the European Commission on antitrust violations that could reach $1.0 billion, although more details on the issue are yet to be revealed. Overall, Mastercard Inc (NYSE:MA)’s stock has gained over 46% since the beginning of the year as the company reported strong quarterly revenue growth and posted better than expected EPS for the last four quarters and missed the revenue expectations one quarter.
Then there is JPMorgan Chase & Co. (NYSE:JPM). During the third quarter, the number of investors long the stock inched down by two to 104, while the aggregate value of their positions increased by 5.60% to $9.93 billion. Compared to September 2016, the number of investors bullish on JPMorgan Chase & Co. (NYSE:JPM) increased by six.
JPMorgan Chase & Co. (NYSE:JPM)’s shares have appreciated by nearly 24% year-to-date helped by better-than-expected results reported by the company and positive industry news. For the third quarter, JPMorgan posted EPS of $1.76 and revenue of $26.2 billion, both of which topped the consensus estimates by $0.11 and $970 million respectively. However, the bank’s trading revenue of $3.16 billion was lower than even the bottom expectation of $3.18 billion, although investment banking revenue of $1.71 billion was better than the estimated $1.65 billion.
In Visa Inc (NYSE:V), there were 106 funds in our database with stakes worth $12.72 billion at the end of September, versus 115 funds and $12.79 billion, respectively, a quarter earlier, and 115 funds and $10.26 billion, respectively, at the end of September 2016.
Visa Inc (NYSE:V)’s stock is 46% in the green since the beginning of the year and some analysts are optimistic that the stock will extend its gains next year and still consider that its undervalued. For example, in October, after Visa posted its third-quarter results, Evercore analysts reiterated their confidence in Visa Inc (NYSE:V) citing the company’s pricing power and accretion from Visa Europe, which Visa acquired in 2016. SunTrust also reiterated their ‘Buy’ rating on the stock after the earnings report, pointing out that the stock is undervalued and is not trading with the premium of “shiny new objects” in the payments sector, such as Paypal Holdings Inc (NASDAQ:PYPL) and Square Inc (NYSE:SQ).
Citigroup Inc (NYSE:C) saw the number of funds bullish on its stock advance by two to 116 between July and September, while the aggregate value of their holdings surged to $11.49 billion from $10.78 billion and was equal to 5.80% of the company’s outstanding stock.
Citigroup has been focusing on its credit card business, which amasses over 23% of its total lending, which is significantly higher compares to its other peers among major banks such as JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corp (NYSE:BAC) and Wells Fargo & Co (NYSE:WFC). Citigroup is also the largest card lender in the world and is the second-largest in the US in terms of balances, according to the Nilson Report cited by the Wall Street Journal. In addition, Citigroup has approved a $19 billion capital return program that includes stock buybacks and dividends and the company’s management has set ambitious plans, such as a $9.0 in EPS to reach by 2020 (vs estimates of $7.80), although this target might be raised on the back of the new tax bill.
The favorite financial stock among the investors tracked by Insider Monkey is Bank of America Corp (NYSE:BAC), in which there were 133 funds with stakes worth $29.35 billion at the end of September. During the third quarter, the number of funds long the stock inched up by one, but the total value of their holdings surged by 140%.
The increase in the aggregate value is due to billionaire Warren Buffett’s Berkshire Hathaway initiating a stake in Bank of America Corp (NYSE:BAC) during the third quarter and amassing a $17.21 billion position containing 679 million shares. The position was acquired after Berkshire exercised its warrants and bought shares at $7.14 apiece. Moreover, compared to the end of September 2016, Bank of America Corp (NYSE:BAC) remained the favorite financial stock among hedge funds, although a year earlier there were 112 funds holding $7.25 billion worth of shares. Earlier this month, Bank of America Corp (NYSE:BAC) has obtained a patent for a potential automated cryptocurrency exchange system aimed at the bank’s business customers. In addition, the bank has secured a $5 billion stock buyback approved by the Fed.
Disclosure: none
