Here’s Why Paypal (PYPL) Landed in Alger’s Detractor List

Alger, an investment management firm, published its “Alger Spectra Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter of 2021, the largest portfolio sector weightings were Information Technology and Consumer Discretionary. The Health Care sector was the largest sector overweight and Consumer Staples was the largest sector underweight. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Alger Spectra Fund, in its Q4 2021 investor letter, mentioned Paypal Holdings, Inc. (NASDAQ: PYPL) and discussed its stance on the firm. Paypal Holdings, Inc. is a San Jose, California-based financial technology company with a $185.8 billion market capitalization. PYPL delivered a -16.11% return since the beginning of the year, while its 12-month returns are down by -34.36%. The stock closed at $158.20 per share on January 25, 2022.

Here is what Alger Spectra Fund has to say about Paypal Holdings, Inc. in its Q4 2021 investor letter:

“Among long positions, PayPal Holdings, Inc. was among the top detractors from performance. PayPal is a pure play on ecommerce and electronic payments, which is driving high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. Coronavirus has significantly accelerated the adoption of ecommerce and the utilization of digital payments platforms. PayPal detracted from the portfolio’s performance as its third quarter revenues disappointed toward the end of the quarter on weakening travel and ecommerce activity. The company issued weaker-than-expected fourth-quarter revenue guidance and provided initial 2022 revenue growth guidance of 18%, lower than consensus expectations of growth in the low 20% range. In the current fourth quarter, aggregated retail sales data and credit card activity have slowed.”

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Our calculations show that Paypal Holdings, Inc. (NASDAQ: PYPL) ranks 9th on our list of the 30 Most Popular Stocks Among Hedge Funds. PYPL was in 123 hedge fund portfolios at the end of the third quarter of 2021, compared to 143 funds in the previous quarter. Paypal Holdings, Inc. (NASDAQ: PYPL) delivered a -34.90% return in the past 3 months.

In December 2021, we also shared another hedge fund’s views on PYPL in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

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