Polen Capital, an investment management company, released its “Polen Focus Growth Strategy” second-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 10.51% gross of fees and 10.36% net of fees in the second quarter compared to a 12.81% return for the Russell 1000 Growth Index and an 8.74% return for the S&P 500 Index. Year-to-date, the fund returned 26.29% and 25.88 %, gross and net of fees respectively, compared to 29.02% and 16.89%, respectively, for the benchmarks. Internet and technology-oriented stocks continued their outperformance in the quarter, while last year’s outperformers like energy and utilities detracted. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Polen Focus Growth Strategy highlighted stocks like PayPal Holdings, Inc. (NASDAQ:PYPL) in the second quarter 2023 investor letter. Headquartered in San Jose, California, PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments. On August 7, 2023, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $64.42 per share. One-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was -8.78%, and its shares lost 31.82% of their value over the last 52 weeks. PayPal Holdings, Inc. (NASDAQ:PYPL) has a market capitalization of $71.874 billion.
Polen Focus Growth Strategy made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its second quarter 2023 investor letter:
“The top absolute detractors were Illumina, Thermo Fisher Scientific, and PayPal Holdings, Inc. (NASDAQ:PYPL). PayPal was also weak in the quarter, but we have become more optimistic about the company’s growth prospects. We recently doubled our position in PayPal to bring it up from a small to an average-sized position for us. We have been patient with PayPal while the company is changing its CEO and trying to modernize its technology architecture to accelerate product development. At a recent investor meeting, the company’s new Chief Product Officer, John Kim, demonstrated that PayPal, Venmo, and Braintree are now all finally on one modern tech stack that is integrated and flexible. This demonstrated to us that a new, one-touch buying experience across all of PayPal’s merchants should finally be within reach and should put PayPal back at parity with its innovative peers regarding web and mobile checkout functionality and user experience.
This means PayPal’s competitive position should be improving just as the growth rate of e-commerce is set to accelerate, likely leading to double-digit revenue growth again in 2024 and beyond. While we continue to monitor PayPal’s ongoing CEO search, the company’s technology and product development are now on much better footing in our view, e-commerce growth is set to accelerate, and we believe the valuation is surprisingly low at approximately 13x next-twelve-month EPS.
As a reminder, PayPal is still by far the most prominent digital wallet in the world, with over 400 million users, 190 million monthly active users, and 35 million merchant customers. In their digital vault, PayPal also has nearly one in four credit and debit cards issued globally (outside of China). This unmatched size and scale, now on a modern, flexible technology foundation, positions PayPal well for the future of digital payments in our view.”
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PayPal Holdings, Inc. (NASDAQ:PYPL) is in 13th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 103 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of first quarter which was 115 in the previous quarter.
We discussed PayPal Holdings, Inc. (NASDAQ:PYPL) in another article and shared Broyhill Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.
