We recently compiled a list of the 10 Most Widely Held Stocks by Hedge Funds. In this article, we are going to take a look at where Visa Inc. (NYSE:V) stands against the other widely held stocks.

Two 25 Point Cuts May be the Most Likely Outcome

The last trading day of September is upon us and so are many questions about the market. On September 30, Dana D’Auria, Envestnet Solutions co-CIO and group president, appeared in an interview on Yahoo Finance to discuss the financial market.

D’Auria regards employment data to be a major concern at the moment. Since inflation rates are subsiding, employment data is something investors should be on the lookout for, along with other data points including GDP and consumer confidence. She suggests that to ensure a soft landing, the Fed must initiate larger rate cuts, and that recessionary conditions are out of the picture.

September is notoriously volatile along with October, and, with elections in another 35 days, the conditions may be slightly different or even more turbulent. According to D’Auria, the 50 basis point cut is a catch-up for July, and expecting a 50 basis point cut in November is borderline questionable.

Overall, she believes that the market has been overshooting and we may have to settle for two 25 basis point cuts before the end of 2024. She reiterates that the job market is crucial and investors must get out of their comfort zone to invest in non-cash opportunities. Investors concerned about low-risk options may consider equities in the defensive sectors that are innately low volatile.

The Market is Broadening

Wall Street is heading to close September and Q3 on a high note and stocks have experienced their best September in over a decade. On September 30, Kevin Gordon, harles Schwab’s Director and Senior Investment Strategist, appeared in an interview on Yahoo Finance to discuss his market thesis.

Gordon believes that stocks in the utilities and defensive sectors have caught up to tech stocks amid the AI boom, compared to their financials at the end of FY 2023. However, he does acknowledge that sectors like industrials, financials, and materials are performing relatively well, calling it a case of market broadening.

In terms of market breadth, most sectors are experiencing an upward trajectory. Almost 81% of the S&P 500 members are experiencing an uptrend, despite the quality bias investors may have towards certain stocks. According to Gordon, large-cap quality stocks will continue to perform well despite the volatility and the Fed’s decisions. Speaking of smaller-cap stocks, he believes that some stocks may struggle a bit especially when it comes to earnings growth.

Our Methodology

To come up with the 10 most widely held stocks by hedge funds, we sifted through Insider Monkey’s database that tracks over 900 hedge funds, as of Q2 2024. We ranked the top 10 stocks that were the most widely held by hedge funds in ascending order of their hedge fund sentiment.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Visa Inc. (NYSE:V)

Number of Hedge Fund Holders: 163

Visa Inc. (NYSE:V) is a multinational payment card service provider based in the United States that facilitates electronic fund transfers across the globe. The company also provides commercial patent solutions, sells cards, has virtual cards, and offers B2B payment options.

In the past quarter, Visa Inc. (NYSE:V) leveraged its proprietary services to expand its presence globally. Yape, a super app in Peru with more than 15 million users has now integrated Visa’s services to facilitate money transfers directly through mobile devices. Moreover, prominent digital wallets in Vietnam have enabled Visa cards for over 50 million users.

In the fiscal third quarter of 2024, the company logged $8.9 billion in revenue, up by 10% year-over-year. The company also grew its global payments volume by 7% and 5% in the US. Visa Inc. (NYSE:V) is a legendary company that knows the art of expansion. Only last week, the company acquired Featurespace, an AI payments protection technology developer. The acquisition will help Visa expand in the fraud detection and risk scoring segments.

Analysts are bullish on the stock, and why should they not be? The company currently has more than 4.5 billion cards in circulation in over 200 countries. In addition to that, In the past 12 months, Visa has facilitated 296.8 billion transactions with a total volume of $15.5 trillion.

Overall, 163 hedge funds held stakes in Visa (NYSE:V) in the second quarter, with positions worth $24.9 billion. According to the Insider Monkey database, TCI Fund Management is the largest shareholder of the company, as of June 30.

Aoris International Fund stated the following regarding Visa Inc. (NYSE:V) in its Q2 2024 investor letter:

“Visa Inc. (NYSE:V) operates the world’s largest payments network, which facilitates the movement of money between merchants, financial institutions, consumers, businesses, and governments.

The company is best known for enabling consumers to make debit and credit card payments. In the year to September 2023, 4.3 billion Visa cardholders made 213 billion transactions on its network, to a total value of US$12.1 trillion.

Compared to cash and cheques, which are still widely used around the world, Visa’s network is a more convenient, secure, and ubiquitous way for consumers to pay. Visa has invested to reduce friction and fraud in the payments experience, to the benefit of both merchants and consumers…” (Click here to read the full text)

Overall V ranks 7th on our list of the most widely held stocks by hedge funds. While we acknowledge the potential of V as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than V but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.