Is Mastercard (MA) Stock A Buy Or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Mastercard Incorporated (NYSE:MA) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is Mastercard (MA) stock a buy or sell? Investors who are in the know were taking an optimistic view. The number of bullish hedge fund bets went up by 21 recently. Mastercard Incorporated (NYSE:MA) was in 154 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 147. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MA ranked 8th among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 133 hedge funds in our database with MA holdings at the end of September.

Charles Akre Akre Capital Management

Charles Akre of Akre Capital Management

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Do Hedge Funds Think MA Is A Good Stock To Buy Now?

At Q4’s end, a total of 154 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 16% from one quarter earlier. By comparison, 125 hedge funds held shares or bullish call options in MA a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).

Is MA A Good Stock To Buy?

The largest stake in Mastercard Incorporated (NYSE:MA) was held by Akre Capital Management, which reported holding $2098.9 million worth of stock at the end of December. It was followed by Berkshire Hathaway with a $1629.3 million position. Other investors bullish on the company included Gardner Russo & Gardner, Fisher Asset Management, and Melvin Capital Management. In terms of the portfolio weights assigned to each position Valley Forge Capital allocated the biggest weight to Mastercard Incorporated (NYSE:MA), around 22.43% of its 13F portfolio. VGI Partners is also relatively very bullish on the stock, designating 19.77 percent of its 13F equity portfolio to MA.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Point72 Asset Management, managed by Steve Cohen, initiated the most outsized position in Mastercard Incorporated (NYSE:MA). Point72 Asset Management had $105.8 million invested in the company at the end of the quarter. James Parsons’s Junto Capital Management also made a $95.3 million investment in the stock during the quarter. The following funds were also among the new MA investors: Alexander Mitchell’s Scopus Asset Management, Brandon Haley’s Holocene Advisors, and Chris Rokos’s Rokos Capital Management.

Let’s go over hedge fund activity in other stocks similar to Mastercard Incorporated (NYSE:MA). These stocks are NVIDIA Corporation (NASDAQ:NVDA), The Home Depot, Inc. (NYSE:HD), UnitedHealth Group Inc. (NYSE:UNH), JPMorgan Chase & Co. (NYSE:JPM), Verizon Communications Inc. (NYSE:VZ), Adobe Inc. (NASDAQ:ADBE), and Paypal Holdings Inc (NASDAQ:PYPL). All of these stocks’ market caps are closest to MA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NVDA 88 8692203 6
HD 79 4924208 6
UNH 91 10778450 2
JPM 112 6967178 -6
VZ 67 10502830 2
ADBE 114 11927730 8
PYPL 147 15961182 -3
Average 99.7 9964826 2.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 99.7 hedge funds with bullish positions and the average amount invested in these stocks was $9965 million. That figure was $17979 million in MA’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand Verizon Communications Inc. (NYSE:VZ) is the least popular one with only 67 bullish hedge fund positions. Compared to these stocks Mastercard Incorporated (NYSE:MA) is more popular among hedge funds. Our overall hedge fund sentiment score for MA is 96.5. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on Mastercard as the stock returned 7.4% since the end of the fourth quarter (through 3/12) and outperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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