Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Five Credit Services Stocks That Hedge Funds Love

Page 1 of 3

The credit card market is anticipated to continue strengthening further in 2016, with credit card companies being very much appreciated by institutional investors and other smaller-scale investors for their earnings predictability, strong growth and attractive dividend yields. As we are at the beginning of a rising interest rate environment, financial lenders such as banks and credit card companies will most likely see their bottom-line growth accelerate in the months and years ahead due to widening rate spreads. Meanwhile, the 60-day credit card delinquencies are anticipated to equal 2.1% in 2016, down from a rate of 2.5% recorded last year. At the same time, the number of credit cards in circulation is anticipated to increase as well this year, so credit services companies appear to be attractive investment opportunities at the moment. For that reason, Insider Monkey decided to compile a list of five credit services stocks favored by the hedge funds tracked by our team.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).

security, number, up, currency, close, electronic, credit, commerce, space, identity, debit

Alix Kreil/Shutterstock.com

#5. American Express Company (NYSE:AXP)

– Investors with long positions as of March 31: 52

– Aggregate value of investors’ positions as of March 31: $12.56 Billion

The number of hedge funds monitored by Insider Monkey with long positions in American Express Company (NYSE:AXP) dropped to 52 from 53 during the first quarter of 2016, while the value of those positions shrunk by nearly 11% to $12.56 billion. That decline was mainly driven by the 11% drop in the company’s share price in the first quarter. The 52 funds invested in American Express accumulated roughly 21% of the company’s outstanding shares. The shares of the global services company have gained 10% in the past three months, but the stock is still down 5% for the year. It has been rumored that the fourth-largest U.S. bank by assets, Wells Fargo & Co (NYSE:WFC), may be interested in acquiring American Express, which has been said to be looking for potential acquirers. American Express pays out a quarterly dividend of $0.29 per share, which equates to an annual dividend yield of 1.76%. Warren Buffett’s Berkshire Hathaway, a major shareholder of Wells Fargo, owns 151.61 million shares of American Express Company (NYSE:AXP) as of the end of March.

Follow American Express Co (NYSE:AXP)
Trade (NYSE:AXP) Now!
Page 1 of 3

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...
X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!