Wedgewood Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For calendar 2021, a portfolio net return of +32.1% was recorded by the fund, outperforming the S&P 500 Index that delivered a +28.7% return for the same period, and the +27.6% gain of the Russell 1000 Growth Index. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Wedgewood Partners, in its Q4 2021 investor letter, mentioned Visa Inc. (NYSE: V) and discussed its stance on the firm. Visa Inc. is a San Francisco, California-based financial services company with a $466.6 billion market capitalization. Visa delivered a -0.94% return since the beginning of the year, while its 12-month returns are up by 4.21%. The stock closed at $214.68 per share on January 19, 2022.
Here is what Wedgewood Partners has to say about Visa Inc. in its Q4 2021 investor letter:
“Visa contributed to performance but less so compared to most holdings. Credit card payment volumes over Visa’s networks continued to recover from COVID effects, growing over +18% on a U.S. dollar basis, supplemented by continued strength in debit. High-margin, travel-related cross-border credit card volumes continue to remain below 2019 levels, and although it is difficult to know when cross-border payment activity will recover to 2019 levels, we think it is just a matter of “when” not “if.” The return of international travel should represent additional upside to Visa’s growth rates over the next few years. As for Visa’s stock, we note again that the index providers, S&P Dow Jones and MSCI, announced the potential re-constitution of their equity indexes, including changing the sector classification of payment processors, such as Visa (and PayPal), from “Information Technology” over to “Financials.” Although we are benchmark agnostic, we suspect that the potential change to this market structure, particularly within passive index exchanged-traded funds, likely added to volatility during the quarter. Visa traded down to attractive relative and historical forward earnings multiples, so we added to our position. Visa maintains a dominant franchise that is providing the network – or “rails” – that have led to a boom in fintech payment volumes, so we were happy for the opportunity to increase our weightings.”
Our calculations show that Visa Inc. (NYSE: V) ranks 8th on our list of the 30 Most Popular Stocks Among Hedge Funds. Visa was in 143 hedge fund portfolios at the end of the third quarter of 2021, compared to 162 funds in the previous quarter. Visa Inc. (NYSE: V) delivered a -7.23% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on Visa 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.
