Five Credit Services Stocks That Hedge Funds Love

#2. Paypal Holdings Inc. (NASDAQ:PYPL)

– Investors with long positions as of March 31: 87

– Aggregate value of investors’ positions as of March 31: $5.64 Billion

Paypal Holdings Inc. (NASDAQ:PYPL) received more love from the hedge funds monitored by our team during the March quarter, as the number of funds invested in PayPal increased to 87 from 84 quarter-on-quarter. At the same time, the dollar value of those funds’ equity investments in the payment processing company rose 3% quarter-over-quarter to $5.64 billion, mainly due to a 7% price appreciation of PayPal stock. Approximately 12% of the company’s outstanding common stock was amassed by the 87 money managers tracked by Insider Monkey. PayPal shares have not changed much since the company spun off from eBay Inc. (NASDAQ:EBAY) last summer, as the stock has gained only 2% since then. However, the company appears to be well-positioned to grow along with other competitors in the market that processes nearly $100 trillion per year. The company’s peer-to-peer payments app called Venmo will mostly likely spur additional growth in the years ahead, as Jefferies analysts believe the “Pay With Venmo” platform could add between 2.1% and 5.5% to PayPal’s 2017 earnings. Carl Icahn’s Icahn Capital LP has 37.83 million shares of Paypal Holdings Inc. (NASDAQ:PYPL) among its holdings as of the end of March.

#1. Visa Inc. (NYSE:V)

– Investors with long positions as of March 31: 106

– Aggregate value of investors’ positions as of March 31: $9.22 Billion

Visa Inc. (NYSE:V) is the favorite credit services stock among the hedge funds followed by our team, with 106 asset managers holding shares of the company at the end of the March quarter, up from 101 f. Nonetheless, the overall value of those managers’ equity positions in Visa declined to $9.22 billion from $9.39 billion quarter-over-quarter, partly owing to a 1% drop in the value of Visa shares. Visa dominates the credit services industry with a 47% market share based on network purchase volumes in 2015. Moreover, there was an astonishing number of 329 million Visa cards in circulation at the end of 2015, more than the cards of Visa’s three closest industry competitors combined. The company’s operating revenue for fiscal 2015 was $13.9 billion, up from $12.7 billion in fiscal 2014 and $11.8 billion in fiscal 2013. Visa shares are up by 51% in the past two years and up 4% thus far in 2016. Ken Fisher’s Fisher Asset Management reported ownership of 14.79 million shares of Visa Inc. (NYSE:V) through the latest round of 13Fs.

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