In this article, we will look at 10 best blockchain stocks to buy in 2022.
Back in the day, blockchain technology was used only for paying bitcoins in exchange for goods and services online in niche communities. Satoshi Nakamoto was the brain behind this decentralized and distributed digital ledger, conceptualizing the idea in a whitepaper published online in 2009. Today, blockchains are being used in more than just the world of financial services, reshaping the automotive, retail, entertainment, healthcare, and telecommunications industries among others.
Blockchain Market Analysis
According to a report by Research and Markets, the global blockchain market was valued at $4.93 billion in 2021 and is expected to grow at a compound annual growth rate of 85.9% over the next decade, hitting $1.43 trillion by 2030. The primary driver for this growth is the global recognition of cryptocurrencies.
Blockchain Outside Of Fintech
Government agencies like the Department of Homeland Security in the U.S. are also driving the growth of blockchain technology, investing in blockchain startups for research and development to enhance their data security using the technology. Retail giants such as Walmart Inc (NYSE:WMT) are leveraging blockchain technology to optimize supply chain operations. Automobile manufacturers such as Ford Motor Company (NYSE:F), Honda Motor Co Ltd (NYSE:HMC) and General Motors Company (NYSE:GM) are betting on the utility of blockchains and are working on blockchain-based solutions for autonomous vehicles, vehicle insurance, vehicle traceability, and payments among others.
Some of the most active players in the blockchain industry include NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Paypal Holdings, Inc. (NASDAQ:PYPL).
blockchain
Our Methodology
To determine the 10 best blockchain stocks to buy in 2022, we performed a careful assessment of companies, coming from an array of industrial sectors including fintech, innovating and investing in the research and development of blockchain technology. We researched the company’s activity in the space and identified each company’s blockchain offerings, and what makes it stand out from its competitors. We also checked for financial records, company valuation, and the analyst and investor sentiment around each company’s shares.
Data from over 900 hedge funds was used to derive the hedge fund sentiment for each stock. We have ranked the best blockchain stocks to buy in an increasing number of hedge fund holders. We believe that the hedge fund sentiment around a stock is fundamental when looking to invest, and can help our readers make informed investment decisions.
10 Best Blockchain Stocks To Buy in 2022
10. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 44
Starting off the list of 10 best blockchain stocks to buy in 2022, we have International Business Machines Corporation (NYSE:IBM). The company provides integrated solutions and services worldwide, operating through four primary segments: Software, Consulting, Infrastructure, and Financing. International Business Machines Corporation (NYSE:IBM) provides industry-leading enterprise-level blockchain solutions and has its own blockchain platform which is powered by Hyperledger technology, making it a suitable investment option if one is looking into blockchain stocks.
This January, International Business Machines Corporation (NYSE:IBM) released an earnings report for the fiscal fourth quarter of 2021 in which it generated revenues of $16.70 billion and registered an EPS of $3.35. On April 14, Morgan Stanley analyst Erik Woodring upgraded International Business Machines Corporation to Overweight from Equal Weight and his price target to $150 on the shares, up from $147.
International Business Machines Corporation (NYSE:IBM) was spotted on 44 hedge fund portfolios at the end of the fourth quarter of 2021. The total stakes of these funds in the company amounted to $1.29 billion. This is compared to 41 positions in the previous quarter with stakes worth $1.40 billion.
As of December end, Arrowstreet Capital is the leading investor in International Business Machines Corporation (NYSE:IBM) having stakes of over $440.57 million in the company. The investment covers 0.53% of Arrowstreet Capital’s investment portfolio.
St. James Investment Company mentioned International Business Machines Corporation (NYSE:IBM) in its fourth-quarter 2021 investor letter. Here is what the firm had to say:
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of
time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
9. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 57
Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto economy in the United States and internationally. The company operates the world’s largest crypto exchange, boasting over 10,000 digital assets which are tradeable on its platform. The company has a consumer base of roughly 89 million verified users, 11,000 institutions, and 185,000 ecosystem partners in over 100 countries, making Coinbase Global, Inc. (NASDAQ:COIN) one of the best blockchain stocks to buy in 2022.
This January, BofA analyst Jason Kupferberg upgraded Coinbase Global, Inc. (NASDAQ:COIN) to Buy from Neutral and reiterated a $340 price target on the shares.
On February 24, 2022, Coinbase Global, Inc. (NASDAQ:COIN) announced that its revenues for the fiscal fourth quarter of 2021 came to $2.50 billion, and the company reported earnings per share of $3.35, beating EPS estimates by $1.09. Moreover, this March, the company launched “Coinbase Pay” which will enable users to fund their Coinbase Wallet from a Chrome browser extension and will also help them explore web 3.0. The goal of Coinbase Pay is to add user-friendly functionalities to its digital wallet, making it more accessible to traders.
By the end of Q4 2021, 57 hedge funds were bullish on Coinbase Global, Inc. (NASDAQ:COIN). The funds held collective stakes of $3.46 billion in the company, up from $2.96 billion in the preceding quarter with 50 positions. The hedge fund sentiment around the stock is positive.
As of December 31, 2021, ARK Investment Management is the dominating shareholder in Coinbase Global, Inc. (NASDAQ:COIN) owning over 5.4 million shares of stock. This equates to a stake value of $1.37 billion, which represents 4.16% of ARK Investment Management’s Q4 2021 investment portfolio.
Like NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Paypal Holdings, Inc. (NASDAQ:PYPL), Coinbase Global, Inc. (NASDAQ:COIN) exhibits great potential for growth in the blockchain space.
Longleaf Partners Fund, a Memphis-based fund under Southeastern Asset Management, shared its thoughts about whether Coinbase Global, Inc. (NASDAQ:COIN) is a good long-term investment in its fourth-quarter 2021 investor letter. Here is what the fund said:
“We also have seen plenty of IPO/SPAC craziness showing both that private players need public markets more than they admit and that there is more volatility embedded in these newer companies than a private quarterly mark might admit. As for how efficient both the private and public markets are, we would encourage you to really delve into some of those multi-hundred-page S1s for many of the newest public companies to see the huge gap between the last valuation at which the company was funded and/or granted shares to its executives and the often much higher price at which the company went public – Coinbase is a prime example.”
8. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Holders: 57
Oracle Corporation (NASDAQ:ORCL) is a leading provider of products and services that address enterprise information technology environments worldwide. The company is most renowned for offering a suite of cloud applications and cloud platform services. The company offers the Oracle Blockchain Platform Cloud Service, which is capable of running smart contracts while maintaining an immutable distributed ledger. The platform is powered by an open-source Hyperledger Fabric, which makes it possible to build secure and verifiable decentralized applications that share tamper-proof, validated data with suppliers, banks, partners, and other relevant entities. Oracle Corporation (NASDAQ:ORCL) is ranked number 8 among the best blockchain stocks to buy in 2022.
This March, Oracle Corporation (NASDAQ:ORCL) released market-beating earnings for the fiscal third quarter of 2022. The company reported earnings per share of $1.13 and generated quarterly revenues of 10.51 billion, up 4.23% year over year, beating revenue estimates by $3 million. On April 1, Daiwa analyst Stephen Bersey initiated coverage of Oracle Corporation (NASDAQ:ORCL) with a Neutral rating and $87 price target, citing the company’s industry-leading cloud offerings, applications, and technology.
According to Insider Monkey’s database, 57 hedge funds were long Oracle Corporation (NASDAQ:ORCL) at the close of the fourth quarter of 2021. The total stakes of these funds were valued at $4.07 billion. This is compared to 56 positions in the prior quarter with stakes worth $3.47 billion. The stock has a positive investor sentiment.
First Eagle Investment Management is the top shareholder in Oracle Corporation (NASDAQ:ORCL) as of last December, owning over 25.7 million shares of the stock. This comes to a stake value of $2.24 billion, which represents 5.61% of First Eagle’s Q4 2021 investment portfolio.
ClearBridge Investments shared its opinion on whether Oracle Corporation (NASDAQ:ORCL) is a smart investment choice in the firm’s third-quarter 2021 investor letter. Here is what experts at ClearBridge think:
“While the information technology (IT) sector in the benchmark stalled amid rising rates, our holdings outperformed in relative terms, helped in part by a strong quarter from Oracle, the dominant provider of on-premise database software for large enterprises globally and an increasingly viable cloud competitor. Solid quarterly results, raised guidance, healthy underlying metrics and an attractive valuation contributed to strong performance during the period.”
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 69
Advanced Micro Devices, Inc. (NASDAQ:AMD) operates as a semiconductor company worldwide and is involved in the design and manufacture of processors and graphic processing units (GPUs), both of which are fundamental for blockchain networks and running blockchain algorithms. The company has a competitive advantage over other major players in the space since it has both cutting-edge CPUs and GPUs to offer which have the goal of making blockchain transactions faster and more secure. Advanced Micro Devices, Inc. (NASDAQ:AMD) is powering some of the world’s most powerful blockchain systems including RocketChain, Comino N1, and the MSI Blockchain Rig F12, among others, which makes it a compelling option for investors looking to invest in blockchain stocks.
This February, Advanced Micro Devices, Inc. (NASDAQ:AMD) reported record earnings for the fiscal fourth quarter of 2021. The company generated revenues of $4.83 billion, up 48.77% year over year, and outperformed the market by $296.39 million. On top of this, the company’s earnings per share came to $0.92, beating EPS estimates by $0.16. As of April 19, 2022, the stock’s trailing twelve-month returns are up by 19.34%, and the company boasts a valuation of $156.82 billion.
At the end of the fourth quarter of 2021, 69 hedge funds held long positions in Advanced Micro Devices, Inc. (NASDAQ:AMD) with stakes worth $6.74 billion in the company. This is compared to 65 positions in the third quarter of 2021 with stakes worth $5.25 billion. The hedge fund sentiment for the stock is positive.
According to fourth-quarter 2021 filings, Fisher Asset Management was the leading investor in Advanced Micro Devices, Inc. (NASDAQ:AMD) having stakes of more than $2.87 billion in the company. The investment covers 1.6% of Ken Fisher’s hedge fund portfolio.
Carillon Tower Advisers, an investment management firm, published its fourth-quarter 2021 investor letter in which the firm mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD). Here is what the firm had to say:
“Advanced Micro Devices (AMD) supplies semiconductor chips for central processing units (CPUs) and graphic processing units (GPUs). The firm has been gaining share against its primary competitor in the datacenter server CPU space, as this rival has been unable to match the design and manufacturing capabilities of AMD and its partners. Investors are also looking forward to the closing of the previously announced merger with a semiconductor manufacturer that is another one of the portfolio’s holdings. The merger will increase AMD’s capabilities in the Field Programmable Gate Array (FPGA) chip space, and the combined company should possess the potential to win additional market share in the datacenter chip market.”
6. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 96
Block, Inc. (NYSE:SQ) operates as a financial services and digital payments company based in San Francisco, California. The company’s CashApp enables users to trade bitcoin in a fast, secure, and user-friendly manner. According to the company’s earnings report for the fiscal fourth quarter of 2021, revenues from CashApp came to $2.6 billion, up 17.5% year over year, accounting for 63% of the company’s total revenues for Q4 2021. Block, Inc. (NYSE:SQ) also operates Spiral, which is an independent platform for bitcoin developers that is targeted at building fund-free and open-source projects that improve bitcoin’s scalability, privacy, security, and user experience.
This February, Block, Inc. (NYSE:SQ) reported earnings for the fiscal fourth quarter of 2021 in which it beat market consensus. The company reported earnings per share of $0.27, beating estimates by $0.04. Moreover, the company reported quarterly revenues of $4.08 billion, up 29.11% year over year, and beat revenue estimates by $20.24 million. Moreover, this April, Stephens analyst Charles Nabhan initiated coverage of Block, Inc. (NYSE:SQ) with an Overweight rating and a $170 price target.
On April 8, 2022, Block, Inc. (NYSE:SQ) announced the commencement of building a new solar-powered bitcoin mining facility in collaboration with Blockstream, a leading blockchain technology company, at Blockstream’s mining site in the United States. Block, Inc. (NYSE:SQ) is pioneering and working on innovating in the space to get the most out of blockchain technology, making it rank 6 among the best blockchain stocks to buy in 2022.
Block, Inc. (NYSE:SQ) is making noteworthy efforts in the blockchain ecosystem. Other prominent names in the industry include NVIDIA Corporation (NASDAQ:NVDA), Mastercard Incorporated (NYSE:MA), and Paypal Holdings, Inc. (NASDAQ:PYPL).
Insider Monkey spotted Block, Inc. (NYSE:SQ) on 96 hedge fund portfolios at the close of the fourth quarter of 2021. The total stakes of these funds were valued at $5.95 billion. Of these, ARK Investment Management was the top investor in the company, owning more than 6.1 million shares of stock which equate to a stake value of $997.7 million.
Baron Funds mentioned Block, Inc. (NYSE:SQ) in its fourth-quarter 2021 investor letter. Here is what the firm had to say:
“High exposure to lagging E-commerce companies and underperformance of Block, Inc. (formerly Square, Inc.) in the Payments theme were the only material detractors from relative performance. E-commerce stocks lagged as a return to in-store shopping caused online shopping growth to moderate. Block was the second largest detractor due to slowing growth in the Cash App segment and greater skepticism about the growth prospects for the pending acquisition of Afterpay.”
5. JPMorgan Chase & Co. (NYSE:JPM)
Number of Hedge Fund Holders: 107
Moving on, we see JPMorgan Chase & Co. (NYSE:JPM) making note-worthy progress and contributions in the blockchain industry. In 2018, the company launched the Interbank Information Network, the company’s first scalable peer-to-peer (P2P) blockchain network to make cross-border transactions faster and more secure. In 2019, JPMorgan Chase & Co. (NYSE:JPM) launched the JPM Coin, its digital alternative coin designed to replicate fiat currencies to facilitate instantaneous payments and reduce settlement times. Moreover, this February, the company announced its plans to invest in TRM Labs, a pioneering blockchain analysis company. JPMorgan Chase & Co. (NYSE:JPM) is making unparalleled efforts in the space, which makes it an attractive blockchain stock to buy in 2022.
On April 13, JPMorgan Chase & Co. (NYSE:JPM) released market-beating earnings for the fiscal first quarter of 2022. The company reported earnings per share of $2.63 and generated revenues of $30.72 billion, beating revenue estimates by over $318 million. This April, Piper Sandler analyst Jeffery Harte raised his price target on JPMorgan to $170 from $165 and reiterated an Overweight rating on the shares following the company’s strong earnings results for FQ1 2022.
JPMorgan Chase & Co. (NYSE:JPM) was present on 107 hedge fund portfolios at the end of the fourth quarter of 2021. The total stakes of these funds were valued at $6.58 billion, up from $5.63 billion in Q3 2021 with 101 positions. The hedge fund sentiment for JPMorgan Chase & Co. (NYSE:JPM) is positive.
Ken Fisher’s Fisher Asset Management is reported to be the largest shareholder in JPMorgan Chase & Co. (NYSE:JPM) as of the end of last December. The fund’s stakes in the company were more than $1.17 billion, and the stock covers 0.65% of Fisher Asset Management’s investment portfolio.
ClearBridge Investments mentioned JPMorgan Chase & Co. (NYSE:JPM) in its fourth-quarter 2021 investor letter:
“Our energy and financials holdings kept pace in the 2021 rally. In financials, JPMorgan benefited from strong economic growth, a rise in Treasury yields, and a benign credit environment.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 110
NVIDIA Corporation (NASDAQ:NVDA) designs professional graphic processing units (GPUs) which are key components for running blockchain applications. The company’s GeForce RTX 3090 is currently the fastest GPU on the market serving both gaming and mining purposes. NVIDIA Corporation (NASDAQ:NVDA) also manufactured the NVIDIA CMP XH, the company’s dedicated GPU for industrial cryptocurrency mining. Having the most powerful hardware in its ammunition places NVIDIA Corporation (NASDAQ:NVDA) among the 5 best blockchain stocks to buy now.
At the close of Q4 2021, Insider Monkey found 110 hedge funds long NVIDIA Corporation (NASDAQ:NVDA) having collective stakes of $10.49 billion in the stock. This is compared to 83 positions in the third quarter of 2021 with stakes worth $10.05 billion.
As of December 31, 2021, Fisher Asset Management is the largest shareholder in NVIDIA Corporation (NASDAQ:NVDA) owning over 5 million shares of stock. This equates to a stake value of $1.5 billion, which represents 0.84% of Ken Fisher’s hedge fund portfolio.
ClearBridge Investments explained why investors should consider investing in NVIDIA Corporation (NASDAQ:NVDA) in its first-quarter 2021 investor letter. Here is what the firm said:
“Gaming is an attractive end market within the media/technology sector with strong growth and a long runway, particularly in mobile gaming. Unity’s platform provides an engine and toolkit for development and monetization of games, e-commerce and industrial applications, adding to our industry exposure, which also includes Nvidia (NASDAQ:NVDA) in graphic processing chips.”
3. Paypal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 110
Paypal Holdings, Inc. (NASDAQ:PYPL) made its first move in the blockchain industry back in 2019 when it invested in Cambridge Blockchain, a pioneer in blockchain-based enterprise solutions, to explore for the potential of blockchain technology. Then in 2021, the company led a $300 million investment round with Visa Inc. (NYSE:V) for Blockchain Capital, a cryptocurrency venture capital firm. The company is reportedly working on its very own stable coin as an alternative for fiat currencies and has added functionalities to its platform which allows PayPal account holders to use cryptocurrencies such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, to purchase goods and services. The company is relatively new to the blockchain scene but is ambitious and poised to grow, making it rank among the top 3 blockchain stocks to buy in 2022.
According to Insider Monkey’s database, 110 elite hedge funds held long positions in Paypal Holdings, Inc. (NASDAQ:PYPL) at the end of the fourth quarter of 2021. These funds had collective stakes of $9.93 billion in the company. Of these, the majority stakes were attributed to Fisher Asset Management which was the largest stakeholder in the company owning over 14.4 million shares of the stock. As of December 31, 2021, Fisher Asset Management’s stakes in Paypal Holdings, Inc. (NASDAQ:PYPL) are valued at $2.72 billion.
Wedgewood Partners, an investment management firm, published its first-quarter 2022 investor letter in which it mentioned Paypal Holdings, Inc. (NADAQ:PYPL). Here is what the firm said:
“PayPal also detracted from performance during the quarter as investors panicked in the face of the well-telegraphed run-off of eBay’s revenues. We have been aware of the runoff of eBay’s revenues since at least the third quarter of 2017.2 Although markets are supposedly efficient, maybe markets are only as efficient as long as the same shareholders are in the stock. When a shareholder base turns over several, if not dozens, of times over a 5-year time frame, perhaps old news periodically becomes “new” to a market riddled with transient shareholders. In any case, we increased our weightings in the stock for the first time since 2018 as the only thing “new”to us was the highly attractive multiple for a competitively wellpositioned business in the e-commerce industry.”
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 142
Visa Inc. (NYSE:V) is becoming an early adopter of blockchain and cryptocurrencies, going head-to-head with its rival Mastercard Incorporated (NYSE:MA). Even though the company is not moving as fast as its peers, Visa Inc. (NYSE:V) is constantly innovating to make cryptocurrencies unlock their full potential to deliver more value and access to the crypto ecosystem. The company has added crypto APIs to its offerings to facilitate trading and possession of digital assets. The stock is on an upwards trajectory and is a runner-up for the best blockchain stocks to buy in 2022.
This January, Visa Inc. (NYSE:V) released earnings for the fiscal first quarter of 2021. The company registered an EPS of $1.81 and beat estimates by $0.11. Moreover, the company saw its quarterly revenues grow by 24.13% year over year, coming to $7.06 billion and outperforming market consensus by $265.07 million.
By the end of the fourth quarter of 2021, 142 hedge funds were long Visa Inc. (NYSE:V) having collective stakes of $29.29 billion. This is compared to 143 positions in the previous quarter with stakes of $26.16 billion. As of the end of last December, TCI Fund Management is the leading stakeholder in the company having stakes of more than $5 billion which cover 11.26% of the fund’s Q4 2021 investment portfolio.
Wedgewood Partners holds an optimistic outlook on Visa Inc. (NYSE:V) according to the firm’s first-quarter 2022 investor letter. Here is what the firm said:
“Visa continued to benefit from strong consumer spending as well as a recovery in crossborder payment volumes, more recently driven by the return of travelers. While the emergence of the “Omicron” variant of COVID early in the quarter posed a risk to this travel recovery, it proved short-lived, with most of Europe, North America, and Latin American reengaging in cross-border travel. Visa continues to extend its network to all comers. By processing over $10 trillion in volume per year, Visa has unparallel scale and, as a result, can sell this scale to its customers at very attractive economics. For example, “FinTech” businesses will often charge customers upwards of 3-5% to transact, while Visa takes mere basis points on most transactions, despite enabling service levels historically reserved for only the largest financial institutions. After adding to Visa late last year, we are most pleased that Visa is back to one of our top 5 holdings.”
1. Mastercard Incorporated (NYSE:MA)
Number of Hedge Fund Holders: 144
Topping our rankings of the best blockchain stocks to buy in 2022, Mastercard Incorporated (NYSE:MA) has appreciated by 1.99% over the past six months as of April 18, 2022. In 2017, the company launched its own blockchain API to facilitate secure and non-card business-to-business (B2B) payments and trade finance transactions. Then in 2019, Mastercard Incorporated (NYSE:MA) announced its collaboration with R3, a leading blockchain solutions provider, to make a blockchain-powered cross-border payments platform to facilitate faster transactions across the globe. As of 2021, Mastercard Incorporated (NYSE:MA) boasts of having filed over 89 patents for blockchain technology, with more than 280 pending blockchain applications.
Moreover, this January, Mastercard Incorporated (NYSE:MA) announced a collaboration with Coinbase Global, Inc. (NASDAQ:COIN) to revolutionize NFT transactions. Individuals can now make NFT purchases on Coinbase Global, Inc. (NASDAQ:COIN) using their Mastercard credit and debit cards. Mastercard Incorporated (NYSE:MA) is making its way in the blockchain industry and exhibits massive upside potential. This April, Tigress Financial analyst Ivan Feinseth raised his price target on MasterCard Incorporated (NYSE:MA) to $472 from $460 and maintained a Strong Buy rating on the shares.
Insider Monkey found 144 hedge funds bullish on Mastercard Incorporated (NYSE:MA) as the fourth quarter of 2021 ended. These funds held collective stakes of more than $17.24 billion in the company. Of these funds, Akre Capital Management was the most prominent shareholder in Mastercard Incorporated (NYSE:MA) having over 5.8 million shares of the stock. This equates to stakes of $2.1 billion in the company, which covers 11.75% of Akre Capital Management’s Q4 2021 investment portfolio.
VGI Partners, an investment management firm, published its fourth-quarter 2021 investor letter in which it mentioned Mastercard Incorporated (NYSE:MA). Here is what the firm had to say:
“Mastercard has been a core constituent of the VGI Partners global strategy since 2009. Mastercard is a global payments processor and in an effective duopoly with Visa. The industry benefits from a strong secular trend toward electronic payments over cash and cheques and the COVID pandemic has accelerated this shift.
Mastercard’s share price increased +1% in calendar 2021 despite more than 25% earnings growth. This was due to Mastercard’s market multiple de-rating due to short-term concerns about cross-border
volumes and long-term concerns about disintermediation from fintechs such as PayPal and Square (see the chart below showing Mastercard’s EV/EBITDA multiple during 2021 de-rating from >30x to ~26x).Whilst the full recovery in cross-border travel has been delayed by the onset of Delta and Omicron, we believe there is significant pent-up demand for travel and that cross-border transaction volumes can exceed 2019 levels by 2023.
Interchange fees have long been a point of contention between the payment processors and merchants so the news that Amazon UK would no longer accept Visa credit cards rekindled fears that there would be a race to the bottom in merchant discount rates. Amazon and Visa have since come to a resolution and we think it is highly unlikely that other merchants will take a similar step. Nevertheless, we are closely monitoring the situation for further developments…” (Click here to see the full text)
You can also take a look at 10 Best Blockchain Stocks to Buy and 10 Best Cryptocurrency Startups to Watch.
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Disclosure: None. 10 Best Blockchain Stocks To Buy in 2022 is originally published on Insider Monkey.
