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.

Hedge Fund Manager Charles Akre’s Top Stock Picks Include Mastercard

Page 1 of 2

Chuck Akre has been managing money through one vehicle or another since 1989. For some time Akre operated the FBR Focus fund before relaunching as the Akre Focus fund in 2009. Oddly, the fund is based not in New York or Greenwich or Chicago but in Middleburg, Virginia- a town with a population of 632 in the 2000 Census.

Akre’s investment philosophy centers on finding companies with high returns on equity which should be able to sustain those high returns for the next several years. This means that the company in question has to have plenty of growth opportunities and managers must be able to reinvest capital generated from current operations into these opportunities without substantially affecting the return on equity. If Akre can find these kinds of companies, it is fairly open to paying moderate multiples on cash flow- Akre and his team prefer free cash flow metrics to earnings metrics- and would prefer these opportunities to those which have fewer growth opportunities but cheaper multiples.

Mastercard Inc (NYSE:MA)

When we look at his 13F filings over the last year, investments tend to be weighted towards services, financial, and technology stocks and this makes sense as companies in these sectors will generally have lower marginal costs to growth than, say, a manufacturer of consumer or industrial goods which might need twice as many plants and workers to generate twice as much revenue. Read on for our quick take on his five largest holdings by market value or see the full list of Akre’s stock picks.

Mastercard Inc (NYSE:MA). Akre increased its holdings of Mastercard to about 340,000 shares as of the end of the end of September. The credit card issuer was one of the two most popular services stocks in our database of 13F filings behind rival Visa (see the top ten services stocks). At an EV/EBITDA multiple of 13x and a forward P/E of 19, it’s difficult to call Mastercard a value stock; however, return on equity is above 30% and we could see the company benefitting from higher payment volume.

Page 1 of 2

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...

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!