Oakmark Funds: “Global Payments (GPN) Looks Attractive at its Current Valuation”

Oakmark Funds, an investment management firm, published its “Oakmark Fund” first quarter 2022 investor letter – a copy of which can be seen here.  A return of -3% was reported by the fund for the first quarter of 2022, outperforming its benchmark, the S&P 500 Index which had a -5% return for the same period. 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, Oakmark Fund mentioned Global Payments Inc. (NYSE:GPN) and explained its insights for the company. Founded in 1967, Global Payments Inc. (NYSE:GPN)  is an Atlanta, Georgia-based payment technology and services provider with a $39.9 billion market capitalization. Global Payments Inc. (NYSE:GPN)  delivered a 5.05% return since the beginning of the year, while its 12-month returns are down by -34.54%. The stock closed at $142.00 per share on April 21, 2022.

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.

Our calculations show that Global Payments Inc. (NYSE:GPN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Global Payments Inc. (NYSE:GPN) was in 67 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 68 funds in the previous quarter. Global Payments Inc. (NYSE:GPN) delivered a 0.87% return in the past 3 months.

In February 2022, we also shared another hedge fund’s views on Global Payments Inc. (NYSE:GPN) 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.