In this article, we discuss five prominent stocks that Michael Burry is dumping ahead of the economic crisis he foresees. If you want to read our analysis of Michael Burry’s latest warnings about the economic outlook and more stocks that he is selling, click “Winter Coming”: Michael Burry Sells These 11 Stocks to Brace for Impact.
5. Global Payments Inc. (NYSE:GPN)
Number of Hedge Fund Holders: 64
Global Payments Inc. (NYSE:GPN) is a Georgia-based company that offers payments technology and software solutions. The company operates through three segments – Merchant Solutions, Issuer Solutions, and Business and Consumer Solutions. Michael Burry acquired a stake in Global Payments Inc. (NYSE:GPN) in Q1 2022, comprising 66,700 shares worth $9.12 million, representing 4.53% of the total portfolio. He dumped his stake in the following quarter.
Mizuho analyst Dan Dolev on August 3 lowered the price target on Global Payments Inc. (NYSE:GPN) to $132 from $148 and kept a Neutral rating on the shares. The company’s updated 2022 guidance “likely has several odd inconsistencies,” the analyst told investors. Of these, the most notable was the NetSpend consumer business, which seems to be excluded from the revenue guide given the sale proceedings, yet appears to be included in the reported earnings outlook, said the analyst. He is monitoring Global Payments Inc. (NYSE:GPN)’s fundamentals cautiously.
Among the hedge funds tracked by Insider Monkey, 64 funds were bullish on Global Payments Inc. (NYSE:GPN) at the end of March 2022, compared to 67 funds in the prior quarter. William B. Gray’s Orbis Investment Management is the leading position holder in the company, with 5.5 million shares worth about $763 million.
Here is what Oakmark Fund has to say about Global Payments Inc. (NYSE:GPN) in its Q1 2022 investor letter:
“Global Payments (NYSE:GPN) is a leading provider of merchant acquiring services. The company is also one of the largest providers of payment processing and related technology solutions to credit card issuers. We believe Global Payments’ merchant acquiring business is well positioned given its strength in software-driven payments. This is one of the fastest growing parts of the industry as small business customers are increasingly recognizing the efficiency benefits of having payments seamlessly integrated into the software they use to run their businesses. In addition, Global Payments benefits from the broader secular shift away from cash and toward electronic payment methods. Together, these tailwinds have the potential to drive low-double-digit revenue growth and even faster earnings growth. With this strong outlook and with management returning a significant portion of free cash flow to shareholders via repurchase, we think the stock looks attractive at its current valuation of just 12.5x next year’s expected EPS.
