Is Mastercard (MA) a Wise Investment Choice?

Ensemble Capital, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be seen here. While this recent quarter represents the fund’s largest degree of underperformance, so too did its 2020 results. In 2020 the Fund was up 30.89% vs the S&P 500 up 18.39% for 12.51% outperformance. It is clear to us that the pandemic has caused much larger and more rapid relative swings in asset pricing as investors struggle to grapple with the implications of an economic event of an unprecedented nature. In this context, you can see that the fund’s first-quarter underperformance of 11.03% is clearly a bad outcome, and yet is not inconsistent with other periods of weak performance that have occurred in the context of its long-term track record of outperformance. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Ensemble Capital mentioned Mastercard Incorporated (NYSE:MA) and explained its insights for the company. Founded in 1966, Mastercard Incorporated (NYSE:MA)  is a Harrison, New York-based financial services company with a $359.05 billion market capitalization. Mastercard Incorporated (NYSE:MA)  delivered a 1.42% return since the beginning of the year, while its 12-month returns are down by -4.94%. The stock closed at $364.44 per share on April 21, 2022.

Here is what Ensemble Capital has to say about Mastercard Incorporated (NYSE:MA) in its Q1 2022 investor letter:

“Mastercard (7.6% weight in the Fund): This company literally earns a percent based fee on dollars spent. When inflation increases the prices of goods across the economy, Mastercard’s revenue increases along with inflation. Thus, the company in some respects is perfectly hedged against inflation with their revenue accelerating automatically when inflation surges.”

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Our calculations show that Mastercard Incorporated (NYSE:MA) ranks 7th on our list of the 30 Most Popular Stocks Among Hedge Funds. Mastercard Incorporated (NYSE:MA) was in 144 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 146 funds in the previous quarter. Mastercard Incorporated (NYSE:MA) delivered a 0.12% return in the past 3 months.

In March 2022, we also shared another hedge fund’s views on Mastercard Incorporated (NYSE:MA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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