We recently published a list of 7 Best Money Making Stocks To Buy Now. In this article, we are going to take a look at where Visa Inc. (NYSE:V) stands against other best money making stocks to buy now.
The US markets have been on a stellar run over the past couple of years, with two-year gains of 53%. This is the best performance for the broad market index since the 66% rally between 1997 and 1998.
READ ALSO: 15 Stocks ChatGPT Predicts Could Make You Wealthy in 10 Years and 12 Best S&P 500 Stocks to Invest in According to Analysts.
The stock market has benefited from waning inflation, declining interest rates, and a resilient economy that has avoided recession. While continued growth is projected for 2025, analysts also warn of the rally having gone too far, with a correction in the offing this year. Moreover, the looming threat of fierce trade wars is already taking a toll on investor sentiment.
The broad market index fell for the fourth successive day on Tuesday, February 25, slipping 0.47% amid heightened concerns about economic growth and global trade. According to CNBC, investors are turning to US bonds, with treasury yield dropping below 4.3% to touch the lowest level since December.
The US president has announced that tariffs on Canada and Mexico will begin next month, ending the month-long suspension. The new administration also recently imposed additional 10% tariffs on Chinese goods and continues to warn the European Union of similar import taxes, citing the bloc’s treatment of Washington.
Protectionist policies have sparked market concerns about which countries will be next on the American president’s list, leaving several large multinationals unsure of how to plan. Past trends show that the broad market index dropped by 5% on days when the US, under Trump’s first stint as president, announced tariffs in 2018 and 2019. The index fell by a cumulative 7% when other countries imposed retaliatory tariffs.
The recent consumer confidence survey for February has added to the negative mood, with results coming in weaker than economists’ estimates and registering the largest deterioration since August 2021. This is the third straight monthly decline, pushing the index to 98.3%, its lowest since June 2024.
Stephanie Guichard, senior economist of global indicators at The Conference Board, stated the following about the dip:
Of the five components of the Index, only consumers’ assessment of present business conditions improved, albeit slightly. Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.
Methodology
For this article, we sifted through screeners to identify stocks with a market cap of over $2 billion (mid-cap or above), whose ROE was greater than 30%, and ROI of more than 25%, as of the close of business on February 25. From there, we selected the 7 stocks with the highest number of hedge fund investors, based on Insider Monkey’s database of over 1,000 prominent hedge funds as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a modern payments terminal with a pile of credit cards on the side.
Visa Inc. (NYSE:V)
Market Cap: $679.19 billion
ROE: 50.51%
ROI: 35.84%
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a payment technology company. It facilitates electronic transactions worldwide in more than 200 countries and territories through its VisaNet network. The company’s share price has surged 11% year-to-date and boasts impressive returns on equity and investment, which makes it an attractive stock for investors.
On January 30, the company reported financial results for the first quarter of fiscal 2025, beating profit estimates due to a splurge during the holiday shopping season. Net revenue surged 10% from last year to $9.5 billion, driven by growth in processed transactions, payments volume, and cross-border volume.
During the quarter, Visa Inc. (NYSE:V) completed the acquisition of Featurespace, a software company that develops AI payment protection technology to prevent and mitigate financial crimes. This move is expected to further bolster the company’s reputation as a reliable financial services provider.
Visa Inc. (NYSE:V) repurchased approximately 13 million shares worth $3.9 billion in Q1. The company also distributed $1.2 billion in dividends, reflecting its commitment to shareholder returns. Following recent financial results, most analysts maintained their Buy rating for the stock.
According to Insider Monkey’s database for Q4 2024, 181 hedge funds held a stake in Visa Inc. (NYSE:V), up from 165 at the end of the third quarter. The London Company Large Cap Strategy stated the following regarding the company in its Q4 2024 investor letter:
Visa Inc. (NYSE:V) – V’s competitively advantaged and resilient business model makes it a steady compounder. The stock price rallied a bit in November following the election as antitrust enforcement may be looser under the new administration. This is relevant for V’s who is currently facing an antitrust case from the Department of Justice (filed in September), and regularly engages in acquisitions to grow.
Overall, V ranks 3rd on our list of best money making stocks to buy now. While we acknowledge the potential of internet content and information companies as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than V but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
