RiverPark Advisors, an investment advisory firm, and sponsor of the RiverPark family of mutual funds released its “RiverPark Large Growth Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. The fund returned 2.41% in the fourth quarter compared to a 7.56% return for the S&P 500 Total Return Index and a 2.20% return for the Russell 1000 Growth Total Return Index. In 2022, the fund declined by 47.37% compared to -18.11% and -29.14% fall for the S&P 500 and the Russell 1000 Growth Index, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2022.
RiverPark Large Growth Fund highlighted stocks like PayPal Holdings, Inc. (NASDAQ:PYPL) in the Q4 2022 investor letter. Headquartered in San Jose, California, PayPal Holdings, Inc. (NASDAQ:PYPL) is a digital technology platform. On February 10, 2023, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $80.80 per share. One-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was 1.66%, and its shares lost 29.20% of their value over the last 52 weeks. PayPal Holdings, Inc. (NASDAQ:PYPL) has a market capitalization of $91.415 billion.
RiverPark Large Growth Fund made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q4 2022 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL)l: PayPal shares were a top detractor for 4Q, reporting slightly weaker than expected 3Q payment volumes and 4Q payment volume guidance. The company nevertheless reported betterthan-expected EPS on improved margins. PYPL operates at significantly lower margins than its payment competitors Visa and Mastercard, and 3Q results and 4Q guidance show early improvements in its margins and ability to drive higher cash flow growth in the near term. For 3Q, PYPL reported $1.8 billion of FCF, the highest quarterly FCF number in its history, representing 37% growth. The company expects continued operating margin expansion for 4Q and full year FCF of more than $5 billion, representing a 6% FCF yield.
PayPal is the most accepted digital wallet – with almost triple the acceptance of Apple Pay, the number two digital wallet. PayPal is a key beneficiary of the ongoing shift to ecommerce driven digital payments, as well as consumer-to-consumer payment trends through its Venmo peer-topeer (P2P) payment service. With a 3Q non-GAAP operating margin of 22%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of secular growth, expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel high teens earnings growth over the next five years. This, to us, presents an excellent risk/reward given that PYPL trades at a below market multiple.”
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PayPal Holdings, Inc. (NASDAQ:PYPL) is in 17th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 126 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the third quarter which was 97 in the previous quarter.
We discussed PayPal Holdings, Inc. (NASDAQ:PYPL) in another article and shared RGA Investment Advisors’ views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
