Chuck Akre’s ‘Three-Legged Stool’ Approach and His Top 5 Stock Picks

1. Mastercard Incorporated (NYSE:MA)

Akre Capital Management’s Stake Value: $2 billion

Percentage of Akre Capital Management’s Portfolio: 14%

Number of Total Hedge Fund Holders: 136

Mastercard Incorporated (NYSE:MA) is the second biggest payment network operating company behind Visa. The company beat consensus estimates on both revenue and EPS in its results of the first quarter. Mastercard’s revenue for Q1, 2022 was at $5 billion, $267 million above consensus.

On May 17, Goldman Sachs analyst Will Nance initiated coverage of Mastercard Incorporated with a ‘Buy’ rating and a $460 price target on the stock, which implies a 38% upside.

Mastercard Inc. has $15 billion invested in it by 136 hedge funds as of the first quarter of 2022, with the top 3 stakeholders being Akre Capital Management, Fisher Asset Management and Berkshire Hathaway. 

Here is what Ensemble Capital had to say about Mastercard Incorporated (NYSE:MA) in its Q1, 2022 investor letter:

“Mastercard (7.6% weight in the Fund): This company literally earns a percent based fee on dollars spent. When inflation increases the prices of goods across the economy, Mastercard’s revenue increases along with inflation. Thus, the company in some respects is perfectly hedged against inflation with their revenue accelerating automatically when inflation surges.”

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