Here is What Hedge Funds Think About Visa Inc (V)

In this article we will check out the progression of hedge fund sentiment towards Visa Inc (NYSE:V) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Visa Inc (NYSE:V) a bargain? Hedge funds were selling. The number of bullish hedge fund bets were cut by 2 recently. Visa Inc (NYSE:V) was in 162 hedge funds’ portfolios at the end of June. The all time high for this statistic is 166. Our calculations also showed that V ranked 5th among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 164 hedge funds in our database with V positions at the end of the first quarter.

According to most stock holders, hedge funds are assumed to be underperforming, outdated financial tools of the past. While there are more than 8000 funds with their doors open today, Our researchers choose to focus on the masters of this club, about 850 funds. These money managers control the lion’s share of the hedge fund industry’s total asset base, and by monitoring their finest investments, Insider Monkey has revealed a few investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

Chris Hohn of TCI Fund Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s take a gander at the fresh hedge fund action surrounding Visa Inc (NYSE:V).

Do Hedge Funds Think V Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 162 of the hedge funds tracked by Insider Monkey were long this stock, a change of -1% from the first quarter of 2020. By comparison, 154 hedge funds held shares or bullish call options in V a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Visa Inc (NYSE:V) was held by Fisher Asset Management, which reported holding $5529 million worth of stock at the end of June. It was followed by TCI Fund Management with a $3287 million position. Other investors bullish on the company included Berkshire Hathaway, Fundsmith LLP, and Akre Capital Management. In terms of the portfolio weights assigned to each position Truvvo Partners allocated the biggest weight to Visa Inc (NYSE:V), around 32.13% of its 13F portfolio. Hengistbury Investment Partners is also relatively very bullish on the stock, designating 25.01 percent of its 13F equity portfolio to V.

Because Visa Inc (NYSE:V) has experienced declining sentiment from the smart money, it’s safe to say that there were a few money managers who sold off their full holdings heading into Q3. At the top of the heap, Bo Shan’s Gobi Capital said goodbye to the largest position of the 750 funds followed by Insider Monkey, totaling close to $65.7 million in stock. Peter Seuss’s fund, Prana Capital Management, also sold off its stock, about $47.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds heading into Q3.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Visa Inc (NYSE:V) but similarly valued. We will take a look at Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), Mastercard Incorporated (NYSE:MA), UnitedHealth Group Inc. (NYSE:UNH), The Walt Disney Company (NYSE:DIS), Bank of America Corporation (NYSE:BAC), and The Procter & Gamble Company (NYSE:PG). This group of stocks’ market caps are similar to V’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 98.1 hedge funds with bullish positions and the average amount invested in these stocks was $15661 million. That figure was $27610 million in V’s case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand The Procter & Gamble Company (NYSE:PG) is the least popular one with only 68 bullish hedge fund positions. Compared to these stocks Visa Inc (NYSE:V) is more popular among hedge funds. Our overall hedge fund sentiment score for V is 97.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Unfortunately V wasn’t nearly as successful as these 5 stocks and hedge funds that were betting on V were disappointed as the stock returned -5.8% since the end of the second quarter (through 9/20) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.