5 Stocks to Buy Now Before the Bull Market Begins

3. PayPal Holdings, Inc. (NASDAQ:PYPL)

Number of Hedge Fund Holders: 100

Share Price Decline YTD as of August 16: 47.64%

PayPal Holdings, Inc. (NASDAQ:PYPL) is an American multinational financial technology company that facilitates digital payments. As American consumer spending rises, PayPal Holdings, Inc. (NASDAQ:PYPL) shares are likely to rebound from the 48% year to date decline they have suffered.

On August 16, Daiwa analyst Kazuya Nishimura upgraded PayPal Holdings, Inc. (NASDAQ:PYPL) to Outperform from Neutral with a price target of $116, up from $85. While operating visibility “remains murky,” the notable decline in PayPal Holdings, Inc. (NASDAQ:PYPL)’s earnings prospects since last year seems to have played out, while multiple optimistic catalysts appear to be falling into place, such as cost reductions and a commitment to achieve capital returns with Elliott Investment Management on board, said the analyst. 

According to Insider Monkey’s data, 100 hedge funds were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of Q1 2022, compared to 110 funds in the preceding quarter. Ken Fisher’s Fisher Asset Management is the biggest shareholder of the company, with 16.7 million shares worth about $2 billion. 

Here is what Wedgewood Partners has to say about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q2 2022 investor letter:

“PayPal Holdings detracted from performance despite the Company generating healthy growth. Revenue grew +8%, but closer to +15% when adjusted for the well-telegraphed roll-off of its eBay relationship. As the Company laps the headwinds of eBay and difficult year ago comparisons, we expect PayPal should drive long-term growth in the mid-teens. Much of this will be driven by further penetration into the Company’s nearly 450 million active users. PayPal’s user base has grown by +50% since the onset of the pandemic so it makes sense for management to focus on driving higher transactions per account and better monetize this historical windfall of users. In our opinion, the shares have discounted away all of PayPal’s pandemic user and revenue gains, so we added to positions during the quarter.”