Hedge Funds Prefer These 5 Stocks Over Square

2. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 156      

Mastercard Incorporated (NYSE:MA) is placed second on our list of 10 stocks that hedge funds prefer over Square, Inc. (NYSE:SQ). The company provides transaction processing services and is headquartered in New York. 

On August 17, investment advisory JPMorgan maintained an Overweight rating on Mastercard Incorporated (NYSE:MA) stock and raised the price target to $430 from $427, underlining that the modern players in the payments market were outperforming the wider market. 

Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm Akre Capital Management is a leading shareholder in Mastercard Incorporated (NYSE:MA) with 5.8 million shares worth more than $2.1 billion. 

In its Q4 2020 investor letter, Bretton Fund, an asset management firm, highlighted a few stocks and Mastercard Incorporated (NYSE:MA) was one of them. Here is what the fund said:

“While consumers resumed much of their spending by summer, what and how they used their Visas and Mastercards changed. For obvious reasons, people shifted to contactless payments—one of the Covid-era changes we think is permanent—and replaced travel purchases with online shopping and food delivery. Consumers spent more on their debit cards and less on their credit cards; Visa and Mastercard make more per transaction on the latter. They also make more on cross-border transactions that come mostly from international travel, which ground to a halt early in the pandemic. Visa’s and Mastercard’s earnings per share fell by 7% and 16%, respectively, compared to their usual mid-teens growth. We’re not too worried, and we think they’ll catch up nicely in the post-vaccine world. Visa’s stock returned 17.1% and Mastercard’s 20.2%.”