Two Sigma Advisors 5 Top Stock Picks and their Performance against S&P 500 ETF (SPY)

3. Visa Inc. (NYSE:V)

Two Sigma Advisors Equity Stake: $534.73 Million

Year-to-Date Performance: +17%

SPDR S&P 500 ETF Trust (NYSEARCA:SPY) YTD Performance: +15.59%

Number of Hedge Fund Holders: 171

Visa Inc. (NYSE:V) is a company that Two Sigma uses to gain exposure in the financial services sector, as it operates as a technology company providing a wide array of payment solutions. The company offers credit, debit, and prepaid card products.

Visa Inc. (NYSE:V) has benefited from solid consumer spending power amid a robust economy. Likewise, it remains one of Two Sigma’s top holdings, having gained 8.6% in Q1 against a 6% gain for the S&P 500 ETF (SPY) and 5.3% in Q2 against a 9.9% gain for the ETF. While Visa Inc. (NYSE:V) was down by 2.9% in Q3, it outperformed the SPY ETF, which was down by 3.6%. The quant hedge fund has bought and sold stakes in the company since 2010 and accounted for 1.36% of the portfolio in Q2 2023.

Ensemble Capital Management’s investor letter for the third quarter of 2023 mentioned Visa Inc. (NYSE:V). Here is what is said:

“Mastercard is a company that pretty much everyone has heard of. In fact, when we meet with Ensemble’s clients, we occasionally tell them that we’re nearly certain that they are carrying a Mastercard in their wallet or purse as we speak, and if not, they are carrying a Visa Inc. (NYSE:V). Most people carry both.

People carry Mastercard and Visa because they are accepted nearly everywhere in developed markets. And they are accepted in most emerging economies, at least at locations where higher income people spend money. As a shopper you can show up at a bodega in Peru, a high end hotel in Tokyo, a truck stop in Alabama, or an ice cream cart in Milan, show them a piece of plastic and they’ll let you walk away with goods and services without any worry that they aren’t going to get paid…” (Click here to read the full text)

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