This $40 Billion Hedge Fund Loves These 5 Stocks

4. PayPal Holdings, Inc. (NASDAQ:PYPL)

Fundsmith’s stake value: $2.45 billion

Percentage of Fundsmith’s portfolio: 5.99%

Number of hedge fund holders: 110

PayPal Holdings, Inc. (NASDAQ:PYPL) was among the worst performers of Fundsmith’s portfolio during the December quarter. Despite that, the firm saw the dip in its share price as a buying opportunity. Fundsmith raised its stake in the company by 6% to 5.99% of the overall portfolio. Besides the latest selloff, PayPal’s stock price produced substantial gains for shareholders during the past two years. 

In the fourth quarter investor letter, ClearBridge Investments, an investment management firm, mentioned a few stocks including PayPal Holdings. Here is what ClearBridge Investments stated: 

“PayPal, a platform and provider of digital and mobile payment services through brands including Venmo, enhances our exposure to digital payments, e-commerce, and fintech; nascent markets with penetration rates accelerating globally. The pandemic pulled forward the growth of digital payments, which was further accelerated by PayPal’s entrance into cryptocurrency and buy now, pay later (BNPL). Shares recently declined 40% from their 52-week high due to competitive concerns and disruptions to consumer spending, providing an attractive entry point. PayPal is trading at its pre-pandemic multiple while its long-term growth drivers remain intact and it has increased innovation at both Venmo and core PayPal, adding new experiences around shopping and investing that we expect to positively contribute to growth in users and average revenue per user over the next five years.”