Fundsmith, an investment management company based in London, released its 2022 yearly update. A copy of the same can be downloaded here. In 2022, the Fundsmith Equity Fund declined -13.8% compared to a 7.8% decline for the MSCI World Index in sterling with dividends reinvested. However, the fund is the best performer in the Investment Association Global sector since its inception in November 2010. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Fundsmith highlighted stocks like PayPal Holdings, Inc. (NASDAQ:PYPL) in its 2022 yearly investor letter. Headquartered in San Francisco, California, PayPal Holdings, Inc. (NASDAQ:PYPL) provides a digital technology platform. On January 11, 2023, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $78.54 per share. One-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was 12.57%, and its shares lost 56.61% of their value over the last 52 weeks. PayPal Holdings, Inc. (NASDAQ:PYPL) has a market capitalization of $89.538 billion.
Fundsmith made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its 2022 yearly investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) seems intent on snatching defeat from the jaws of victory. It has taken a leading position in online payments and parlayed that into a lamentable share price performance. The elements in this would appear to be a disregard for engagement with the customers newly acquired during the pandemic and no obvious attention to or control of costs. This is hardly surprising given the attention devoted to pursuing some clearly over-priced acquisitions. That is what happens when management start to conclude that investments do not need to earn an adequate return.
We sold our stakes in Johnson & Johnson, Starbucks, Kone, Intuit and PayPal and purchased stakes in Mettler-Toledo, Adobe, Otis and Apple. This seems a lot of names for what is not a lot of turnover as in some cases the size of the holding sold or bought was small. We have held five of our portfolio companies since inception in 2010.
We had held PayPal shares since it was spun out from eBay in 2015. We tried to engage with PayPal as we identified, seemingly long before the management, that their lack of engagement with new customers was a problem as was cost control and that their acquisitions were value destroying. In particular, we pointed out that the value destroying acquisitions might be avoided if the management remuneration incentives included some measure of return on capital. A representative of the board kindly told us they would think about that.”
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PayPal Holdings, Inc. (NASDAQ:PYPL) is in 17th position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 126 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the third quarter, which was 97 in the previous quarter.
We discussed PayPal Holdings, Inc. (NASDAQ:PYPL) in another article and shared the most valuable silicon valley companies in the world. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
