We recently compiled a list of the 10 Best Stocks To Invest In According to Billionaires. In this article, we are going to take a look at where Visa Inc. (NYSE:V) stands against the other billionaire-approved stocks.
Billionaires and top hedge fund managers typically dominate the stock market, focusing on leading companies with strong track records and exceptional performance. They usually don’t waste time with underperformers—they target the market’s elite.
The Stock Market Rally
Before diving into the top stock picks among billionaires, reviewing how the market has performed so far this year is essential. On September 18, the Federal Reserve cut its policy rate by 50 basis points, lowering it to 4.75%–5.00% from 5.25%–5.50%. This move fueled a market rally, pushing stocks to a new intraday record high, and marking the 39th all-time high of 2024—the first since mid-July. Minneapolis Fed president Neel Kashkari acknowledged that while the rate cut was unusual historically, shifting the policy focus from controlling high inflation to addressing a weakening labor market was necessary. Here are some comments:
“Right now, we still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we’re on our way back to 2%. So I don’t think you’re going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future.”
Market expectations point to an equal probability of the Federal Open Market Committee (FOMC) cutting rates by either a quarter- or half-percentage point at its November meeting, with a higher chance of the larger reduction in December. Overall, markets are signaling the Fed’s intent to bring rates to a “neutral” level that neither stimulates nor restricts economic growth.
What the Top Dogs of Wall Street are Saying About the Market
For nearly two years, bulls have dominated Wall Street, driven by a resilient U.S. economy and growing enthusiasm around artificial intelligence (AI). This momentum has propelled the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite to multiple record highs in 2024. Despite the surge, not everyone seems hopeful about the market, with some of the most influential billionaire investors, including Warren Buffett of Berkshire Hathaway, signaling caution. Buffett, known for his long-term optimism, has been a net seller of stocks for seven straight quarters.
On the other hand, billionaire investor Ray Dalio recently raised concerns about the “enormous amount of debt” burdening the U.S. economy. He cautions that neither former President Donald Trump nor Vice President Kamala Harris is likely to focus on addressing debt sustainability in the upcoming presidential election, suggesting that the pressure from the $35.3 trillion national debt will persist, regardless of the election outcome.
Our Methodology
In this article, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings to select the 10 stocks with the highest number of billionaire investors. These billionaires are founders or managers of some of the world’s leading hedge funds and companies.
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 275% since May 2014, beating its benchmark by 150 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)
Number of Billionaire Investors: 23
Visa Inc. (NYSE:V), a global leader in digital payments, facilitates transactions across more than 200 markets. Connecting 4 billion account holders with over 130 million merchants and 14,500 financial institutions, Visa Inc. (NYSE:V) plays a crucial role in powering the global economy.
For the third fiscal quarter of 2024, Visa Inc. (NYSE:V) reported adjusted earnings per share of $2.42, up from $2.16 in the previous year, with payment volumes increasing by 7%. The company reaffirmed its full-year 2024 outlook, expecting low double-digit revenue growth and a low-teens EPS increase. In addition, the company’s service revenue rose 8% to $4 billion, while data processing revenue and international transaction revenue climbed 9% to $4.5 billion and $3.2 billion, respectively. Additionally, other revenue surged 31% year-over-year.
Compass Point recently initiated coverage on Visa Inc. (NYSE:V) with a Buy rating and a price target of $319, suggesting an 18.5% potential upside from its current price and an estimated total return of about 20%. The firm’s optimism is driven by Visa’s value-added services, with Compass Point projecting long-term net revenue growth of 15% as more customers adopt these offerings.
By the end of Q2 2024, 23 billionaires held stakes in Visa Inc. (NYSE:V), with Chris Hohn being the largest shareholder, holding stakes valued at $4.4 billion.
Wedgewood Partners stated the following regarding Visa Inc. (NYSE:V) in its Q2 2024 investor letter:
“Visa Inc. (NYSE:V) detracted from performance despite healthy corporate results. The company grew earnings per share +12% as payment volume growth was up +8% and cross-border payment grew +16%, adjusted for currency. There are over 4.4 billion Visa debit and credit cards in circulation generating over $15 trillion in volume over the past 12 months. There is another estimated $10 trillion in cash and check volume, globally, which we think Visa can continue to move over to its electronic payment rails. In addition, the company has spent the past several years extending its payment capabilities into new flows of commerce, particularly for business-to-business transactions. This is another, extremely large (+$200 trillion) long-term growth opportunity for Visa that we believe investors are ignoring.”
Overall V ranks 7th on our list of the stocks to invest in according to billionaires. While we acknowledge the potential of V as an investment, we believe that there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than V, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.