The Motley Fool’s 1623 Capital Latest Portfolio: Top 5 Stock Picks

3. Visa Inc. (NYSE:V)

1623 Capital’s Stake Value: $10.39 million

Percentage of 1623 Capital’s 13F portfolio: 6.48%

Number of Hedge Fund Holders: 166

Visa Inc. (NYSE:V), an American multinational financial services corporation, operates as a payments technology company worldwide. On September 22, the company announced a Banking as a Service, or BaaS, collaboration with Finastra to co-develop a new functionality on Finastra’s Payments Hub solutions and implement Visa Direct. During Q2 2022, 1623 Capital’s total stake in the company amounted to roughly $10.39 million, which represented 6.48% of its 13F portfolio.

Earlier this August, Daiwa analyst Kazuya Nishimura downgraded Visa Inc. (NYSE:V) to Neutral from Outperform with a price target of $225, down from $230. Although the financial technology company continued to offer an upbeat growth scenario given a rebound in cross-border travel, the analyst sees a reduced scope for earnings to surpass market expectations due to border restrictions being lifted. However, Nishimura continues to highly rate the firm’s medium-to-long-term growth prospects.

A total of 166 hedge funds were invested in Visa Inc. (NYSE:V) at the end of the second quarter of 2022. The stock’s largest shareholder in Q2 was TCI Fund Management, which amassed shares of Visa Inc. (NYSE:V) valued at about $3.9 billion.

Here is what Lakehouse Capital specifically said about Visa Inc. (NYSE:V) in its Q2 2022 investor letter:

“It was business as usual for Visa Inc. (NYSE:V) as it delivered another solid quarter driven by strong US growth, the ongoing gradual displacement of cash with digital transactions, and accelerated growth in cross-border volume as travel spending plays catch up post-Covid. Visa processed 49.3 billion transactions on its network, up 16% year-on-year and 39% above pre-pandemic levels, driving $2.7 trillion in total payments volume, both of which have more than recovered from the impacts of the pandemic. The total number of cards in Visa’s network also grew by 8% year-on-year to 3.9 billion.

Cross-border transactions were a key issue for Visa during the pandemic, but this headwind has now turned into a tailwind. Constant currency cross-border volumes rose 40% (48% excluding intra-Europe) in the most recent quarter and we expect this trend will continue to play out in the year ahead. While a potential economic slowdown and geopolitical concerns are always a risk, we take comfort in the fact that Visa has a sixty-plus year track record of successfully overcoming numerous macroeconomic challenges that in the moment appeared insurmountable. We believe this current episode will prove no different and that the combination of a very attractive industry structure and the ongoing secular shift towards digital payments provides a foundation that will enable Visa to continue winning for many years to come.”