Growth Stock Portfolio: 5 Stock Picks By Hedge Funds

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 137

P/E Ratio as of November 3: 31.39

Mastercard Incorporated (NYSE:MA), the American multinational payments technology giant, is one of the best stocks to consider for a growth portfolio as per elite investors. Mastercard Incorporated (NYSE:MA)’s earnings and revenue continued to increase in Q3 2022, supported by ongoing gains in cross-border travel. However, the pace of growth softened as compared to the prior quarter amid rising economic uncertainty.

On November 1, investment advisory Mizuho maintained a Buy rating on Mastercard Incorporated (NYSE:MA) but lowered the firm’s price target on the shares to $380 from $385 after the Q3 results. Analyst Dan Dolev raised 2022 estimates but slashed outer-year expectations.

Among the hedge funds tracked by Insider Monkey in Q2 2022, Charles Akre’s Akre Capital Management is the largest stakeholder of the company, with 5.8 million shares worth $1.85 billion. Overall, 137 hedge funds were long Mastercard Incorporated (NYSE:MA) at the end of June this year. 

Here is what L1 Capital International specifically said about Mastercard Incorporated (NYSE:MA) in its Q2 2022 investor letter:

“Growth in electronic payments, the continued shift away from cash and cheques, and the provision of additional services such as fraud identification and prevention continue to power Mastercard Incorporated (NYSE:MA)’s growth (Figure 14). In person cross-border transactions are recovering alongside normalization of travel.

Mastercard and Visa (we have invested in both) continue to dominate the electronic payments industry outside of China, utilizing their own multi-faceted networks as well as Government and third-party payments infrastructure to facilitate transactions. Another perfect example of a ‘Noah’s Ark’ industry structure.

Regulation, technological disruption and disintermediation, and geopolitical constraints are perennial issues for consideration, but Mastercard (and Visa) management have repeatedly demonstrated their ability to manage these issues…” (Click here to read the full text)