Weitz Investment Management, an investment management firm, published its “Value Fund” fourth quarter 2021 investor letter – a copy of which can be downloaded here. In its letter, the fund mentioned that it knows very little in economics, politics, and investor psychology is predictable. The fund believes, though, that business value is (roughly) measurable and that it (eventually) exerts a gravitational pull on a company’s stock price. According to Weitz Investment, when confidence is shaken and markets are volatile, active managers have the raw material they need to add value for investors. We’re looking forward to an interesting year. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Weitz Investment Management, in its Q4 2021 investor letter, mentioned Mastercard Incorporated (NYSE: MA) and discussed its stance on the firm. Mastercard Incorporated is a Harrison, New York-based financial services company with a $374.8 billion market capitalization. MA delivered a 6.45% return since the beginning of the year, while its 12-month returns are up by 20.94%. The stock closed at $382.51 per share on January 28, 2022.
Here is what Weitz Investment Management, Inc. has to say about Mastercard Incorporated in its Q4 2021 investor letter:
“Reports to investors usually focus on the winners that prove the worthiness of the managers. It’s possible that we’ve been guilty of that on occasion, despite our best efforts to accurately convey what has worked and what hasn’t. This time, though, we are going to celebrate the great businesses we own that “went nowhere” in 2021. In a generally expensive market facing potentially strong headwinds in 2022, we find it very encouraging to own a number of proven winners whose stocks have been “resting” for the last year or so. They will not necessarily save us from markdowns during broad-based corrections, but they are companies that we believe can survive and grow business value through almost anything. They are the kinds of businesses that allow us to sleep well at night and not be tempted to sell at the wrong time. Here are some examples:
Established payments companies have been out of favor recently. Cross-border payments have been depressed with COVID disrupting international travel. These types of payments are particularly lucrative for Mastercard and their absence has impacted earnings. Further, we believe investors have overestimated the negative competitive impact of new fintech companies that have emerged over the past few years. Many of these “disrupters” depend on the Mastercard “rails” over which electronic payments travel, and these wily incumbents have a way of acquiring, copying or otherwise competing with upstarts.”
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Our calculations show that Mastercard Incorporated (NYSE: MA) ranks 6th on our list of the 30 Most Popular Stocks Among Hedge Funds. MA was in 146 hedge fund portfolios at the end of the third quarter of 2021, compared to 156 funds in the previous quarter. Mastercard Incorporated (NYSE: MA) delivered a 14.01% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on MA 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.
