20. Fiserv, Inc. (NYSE:FI)
Number of Hedge Fund Holders In Q2 2024: 73
Overweight Percentage: 0.10%
Fiserv, Inc. (NYSE:FI) is a sizeable payment technology company that enables businesses to conduct transactions. Along with Jack Dorsey’s Square, it is one of the few large players in the industry which offers the company a wide moat. Fiserv, Inc. (NYSE:FI) is one of the few companies of its kind that is able to target both financial institutions and small and medium businesses. It targets small businesses through its Clover platform, and the target market also makes the firm vulnerable to economic downturns as small businesses are often hit the hardest during such macroeconomic conditions. Fiserv, Inc. (NYSE:FI)’s partnerships with financial institutions are evident through its partnership with banking giant Wells Fargo. Through this deal, the firm provides payment processing services to the merchant customers of one of America’s largest domestic banks. Additionally, Fiserv, Inc. (NYSE:FI) has also been busy offering new services such as cash flow management software which further bolsters its competitive position.
Broyhill Asset Management mentioned Fiserv, Inc. (NYSE:FI) in its Q2 2024 investor letter. Here is what the fund said:
“Fiserv is the premier provider of financial technology services, supporting banks, credit unions, and financial institutions with innovative banking solutions, payment processing, and data analytics to streamline and secure financial transactions. The company’s shares slid 7% during the quarter before rallying 10% in July to fresh all-time highs. Clover remains the company’s crown jewel, generating over $300 billion in annualized GPV (Gross Payment Volume) with better monetization, driving 28% revenue growth in the recently reported quarter, and three new hardware products plus pilot programs in Mexico and Brazil going live in the coming months. Simply put, there are few businesses in this industry executing even close to the same level, and fewer still with Fiserv’s scale, distribution, and collection of assets. In our initial write-up, we highlighted the embedded distribution advantages often enjoyed by incumbents, noting that “Fiserv can cross-sell products through its large, engrained distribution channels, driving faster growth than even its most rapidly growing peers. And with Clover and Square accounting for less than 10% of a fragmented market, we think there is plenty of room for both to run.” Notably, Jack Dorsey, Chief Block Head, Square Head, Chairman, and Cofounder, recently came to the same conclusion, admitting as much on the company’s most recent earnings call: “I would state that our product quality is far above the majority of our competitors. Where we have been weaker in the past is how we mirror that with our go-to-market strategy and just updating our approach there, especially given what our competitors have done.“ We wonder which competitors come to mind.”
