Is PayPal (PYPL) Still Worth Keeping?

Wedgewood Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2022, the fund’s Composite (net) declined by -10.6%. The S&P 500 Index declined by -4.6%. The Russell 1000 Growth Index declined -by 9.0%, while the Russell 1000 Value Index declined -by 0.7%. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Wedgewood Partners mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) and explained its insights for the company. Founded in 1998, PayPal Holdings, Inc. (NASDAQ:PYPL)  is a San Jose, California-based financial technology company with a $119.1 billion market capitalization. PayPal Holdings, Inc. (NASDAQ:PYPL)  delivered a -45.75% return since the beginning of the year, while its 12-month returns are down by -62.66%. The stock closed at $102.31 per share on April 15, 2022.

Here is what Wedgewood Partners has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2022 investor letter:

“PayPal also detracted from performance during the quarter as investors panicked in the face of the well-telegraphed run-off of eBay’s revenues. We have been aware of the runoff of eBay’s revenues since at least the third quarter of 2017.2 Although markets are supposedly efficient, maybe markets are only as efficient as long as the same shareholders are in the stock. When a shareholder base turns over several, if not dozens, of times over a 5-year time frame, perhaps old news periodically becomes “new” to a market riddled with transient shareholders. In any case, we increased our weightings in the stock for the first time since 2018 as the only thing “new”to us was the highly attractive multiple for a competitively wellpositioned business in the e-commerce industry.”

Image by mohamed Hassan from Pixabay

Our calculations show that PayPal Holdings, Inc. (NASDAQ:PYPL) ranks 14th on our list of the 30 Most Popular Stocks Among Hedge Funds. PayPal Holdings, Inc. (NASDAQ:PYPL) was in 110 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 123 funds in the previous quarter. PayPal Holdings, Inc. (NASDAQ:PYPL) delivered a -43.48% return in the past 3 months.

In April 2022, we published an article that includes PayPal Holdings, Inc. (NASDAQ:PYPL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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