Is it a Good Time to Increase Your PayPal (PYPL) Position?

Wedgewood Partners, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. For the first half of 2022, a portfolio net return of -17.2% was recorded by the fund, underperforming the S&P 500 Index which delivered a -16.1% return for the same period. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Wedgewood Partners mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) and explained its insights for the company. Founded in 1998, PayPal Holdings, Inc. (NASDAQ:PYPL) is a San Jose, California-based financial technology company with an $89.2 billion market capitalization. PayPal Holdings, Inc. (NASDAQ:PYPL) delivered a -59.15% return since the beginning of the year, while its 12-month returns are down by -74.36%. The stock closed at $77.04 per share on July 26, 2022. 

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.”

Our calculations show that PayPal Holdings, Inc. (NASDAQ:PYPL) ranks 18th on our list of the 30 Most Popular Stocks Among Hedge Funds. PayPal Holdings, Inc. (NASDAQ:PYPL) was in 100 hedge fund portfolios at the end of the second quarter of 2022, compared to 110 funds in the previous quarter. PayPal Holdings, Inc. (NASDAQ:PYPL) delivered a -7.96% return in the past 3 months.

In June 2022, we also shared another hedge fund’s views on PayPal Holdings, Inc. (NASDAQ:PYPL) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.