Long-Term Stock Portfolio: 5 Best Stocks for 20 Years

4. Mastercard Incorporated (NYSE:MA)

Number of Hedge Fund Holders: 136

Payments giant Mastercard Incorporated (NYSE:MA) ranks fourth on our list of the best stocks for 20 years. Mastercard Incorporated (NYSE: MA) disclosed its Q1 financial results on April 27th, surpassing Wall Street expectations with a non-GAAP EPS of $2.80 and a revenue of $5.7 billion. These figures exceeded estimates by $0.09 and $60 million, respectively. The stock’s 12 month average price target is estimated to reach $434.47, with a 14.39% upside.

138 of the 943 hedge funds part of Insider Monkey’s database had bought Mastercard Incorporated (NYSE:MA)’s shares in Q1 2023. Out of these, Charles Akre’s Akre Capital Management is the largest shareholder since it owns 5.8 million shares that are worth $2.1 billion.

Polen Global Growth Strategy made the following comment about Mastercard Incorporated (NYSE:MA) in its Q1 2023 investor letter:

“We trimmed Mastercard Incorporated (NYSE:MA) and Visa to equal weights of the Portfolio. Mastercard and Visa operate as a duopoly in a large and growing market. Over the last 50 years, global personal consumer expenditures (PCE) has grown 7-9% annualized. We expect 4-5% long-term PCE growth going forward. Additionally, the shift from cash to credit continues unabated, with a total credit penetration of only approximately 50% globally.3 This shift provides Visa and Mastercard with another ~4-6% of growth. When combined with PCE, this gives both companies high-single-digit to low-double-digit revenue growth opportunities. This growth estimate is before accounting for growth amplifiers like the acceleration of e-commerce, the shift from offline to online, and additional services. Both companies enjoy extremely strong network effects that provide strong competitive advantages.

We have trimmed Visa and Mastercard because their combined weight grew to over 12% of the Global Growth Portfolio because of their recent performance and to fund our increase in Amazon’s position size. We added to both positions when their prices were depressed due to cross-border transactions deteriorating materially from the pandemic. Cross-border volumes came roaring back when travel corridors reopened, and although we are several quarters removed from the cross-border nadir, Visa still grew volumes >30% in 1Q23. Total cross-border volumes are now 132% of 2019 levels. At 4.5% each, both companies remain high conviction positions for Global Growth.”