Polen Capital Management recently released its Q2 2020 Investor Letter, a copy of which you can download here. During the second quarter of 2020, the Polen Global Growth Model Portfolio returned 20.58% gross of fees, while the MSCI All Country World Index was up 19.22%. You should check out Polen Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Polen Capital highlighted a few stocks and Paypal Holdings Inc. (NASDAQ:PYPL) is one of them. Paypal Holdings Inc. (NASDAQ:PYPL) engages in the development of technology platform for digital payments. Year-to-date, Paypal Holdings Inc. (NASDAQ:PYPL) stock gained 63.8% and on July 17th it had a closing price of $173.92. Here is what Polen Capital said:
“PayPal was trading less expensively on a relative basis, is growing faster, and we see its value proposition seemingly strengthening as a result of COVID-19 spread mitigation policies.
We also believe the company will continue to benefit from network effects, whereby new active accounts and more engagement leads to even more new active accounts and engagement. Over 7 million net new active accounts were added during the month of April, representing growth of more than 130%. And, the cohort of new accounts who conduct three or more transactions with PayPal within the first ten days of signing, a strong pattern that historically leads to lifelong users, saw a 30% lift in adoption this past quarter. In short, the current environment is spurring greater trialing and repeat use, which is a significant positive for PayPal.
PayPal’s products are user-friendly such that regardless of whether shelter-in-place is prolonged, abruptly stopped, occurs again in the fall, or any combination of the three, we believe the company will continue to thrive in a post-COVID-19 world. We expect that many people will be reticent to shop as they have in the past while social distancing remains a reality, and PayPal provides simple solutions to transacting more safely.
Like Visa and Mastercard, PayPal makes commerce easier and we expect it will be a strong beneficiary of the demise of cash. We are cognizant of our combined weighting of Visa, Mastercard and PayPal, which is why we adjusted Visa’s weighting slightly within the Portfolio. On a combined basis, we have increased our overall weighting in these three dominant payments businesses and continue to have a high-conviction position.”
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Last month, we published an article revealing that Wedgewood Partners is bullish about Paypal Holdings Inc. (NASDAQ:PYPL) as it managed to grow its total payments volume despite the COVID-19 pandemic.
In Q1 2020, the number of bullish hedge fund positions on Paypal Holdings Inc. (NASDAQ:PYPL) stock decreased by about 6% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Paypal’s growth potential. Our calculations showed that Paypal Holdings Inc. (NASDAQ:PYPL) is ranked #11 among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.
