In this article, we discuss the 5 stocks that hedge funds prefer over Square. If you want to skip our detailed analysis of these stocks, go directly to Hedge Funds Prefer These 10 Stocks Over Square (SQ).
5. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 143
PayPal Holdings, Inc. (NASDAQ:PYPL) is ranked fifth on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ). The company markets digital payments solutions and is headquartered in California.
On September 9, investment advisory DA Davidson maintained a Buy rating on PayPal Holdings, Inc. (NASDAQ:PYPL) stock with a price target of $325, noting that consolidation in the payments sector was expected to continue in the coming months.
At the end of the second quarter of 2021, 143 hedge funds in the database of Insider Monkey held stakes worth $16.3 billion in PayPal Holdings, Inc. (NASDAQ:PYPL), the same as in the preceding quarter worth $14.7 billion.
In its Q4 2020 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and PayPal Holdings, Inc. (NASDAQ:PYPL) was one of them. Here is what the fund said:
“For the full year 2020, one of the top performers was PayPal, which we purchased in 2019, the company continues to take market share in digital payments and has seen an acceleration in user adoption and engagement, especially within their “silver tech” or older user demographic. We expect many more years of ongoing double-digit growth from their various business segments and new initiatives.”
4. Alibaba Group Holding Limited (NYSE:BABA)
Number of Hedge Fund Holders: 146
Alibaba Group Holding Limited (NYSE:BABA) is a China-based firm that provides technology infrastructure. It is placed fourth on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ).
On October 1, investment advisory Raymond James downgraded Alibaba Group Holding Limited (NYSE:BABA) stock to Outperform from Strong Buy with a price target of $240. Aaron Kessler, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Alibaba Group Holding Limited (NYSE:BABA) with 14 million shares worth more than $3.2 billion.
In its Q1 2021 investor letter, Polen Capital Management, an asset management firm, highlighted a few stocks and Alibaba Group Holding Limited (NYSE:BABA) was one of them. Here is what the fund said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
3. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 155
Alphabet Inc. (NASDAQ:GOOG) is a California-based diversified technology company. It is ranked third on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ).
On September 17, investment advisory Jefferies reiterated a Buy rating on Alphabet Inc. (NASDAQ:GOOG) stock and raised the price target to $3,325 from $3,150. Brent Thill, an analyst at the advisory, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in Alphabet Inc. (NASDAQ:GOOG) with 2.9 million shares worth more than $7.3 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ:GOOG) was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
2. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 156
Mastercard Incorporated (NYSE:MA) is placed second on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ). The company provides transaction processing services and is headquartered in New York.
On August 17, investment advisory JPMorgan maintained an Overweight rating on Mastercard Incorporated (NYSE:MA) stock and raised the price target to $430 from $427, underlining that the modern players in the payments market were outperforming the wider market.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2.1 billion.
In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:
“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”
1. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 162
Visa Inc. (NYSE:V) is ranked first on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ). The company operates as a payments technology firm and is headquartered in California.
On September 3, investment advisory maintained an Overweight rating on Morgan Stanley Visa Inc. (NYSE:V) stock with a price target of $282. James Faucette, an analyst at the advisory, issued the ratings update.
At the end of the second quarter of 2021, 162 hedge funds in the database of Insider Monkey held stakes worth $27 billion in Visa Inc. (NYSE:V).
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Visa Inc. (NYSE:V) was one of them. Here is what the fund said:
“To make room for these new names with more attractive outlooks related to the reopening, we sold out of companies where the thesis is not playing out at the pace we expected including Visa.”
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