Wedgewood Partners, an investment management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, Wedgewood Composite’s net return was 5.8% compared to the Standard & Poor’s 5.9%, the Russell 1000 Growth Index’s 3.2%, and the Russell 1000 Value Index’s 9.4% return for the same period. Year to date, the composite returned 22.4% compared to the 22.1%, 24.6%, and 16.7% returns for the indexes, respectively. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
Wedgewood Partners highlighted stocks like PayPal Holdings, Inc. (NASDAQ:PYPL), in the third quarter 2024 investor letter. PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments. The one-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was 0.94%, and its shares gained 56.19% of their value over the last 52 weeks. On October 23, 2024, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $80.83 per share with a market capitalization of $82.635 billion.
Wedgewood Partners stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q3 2024 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL) was a top contributor to portfolio performance during the quarter. Revenues grew +9% (FX neutral) while adjusted operating income grew +24%, driven by higher transaction margin dollars and continued excellent expense discipline. The Company’s core branded payments and Venmo transactions grew at a healthy mid-single digit clip. PayPal has several investment initiatives that will contribute to accelerating growth over the next few years to help take advantage of their leading market share in e-commerce payments. The Company serves over 35 million online merchants. PayPal’s large, online merchant acceptance base is a rare and crucial component to profitably monetizing payment volumes that many competitors lack. While the Company’s earnings multiple has expanded recently, it continues to trade at levels we think are quite cheap given their strong positioning in the long-term secular expansion of global e-commerce.”
A consumer in a cafe paying for goods using a mobile payment app.
PayPal Holdings, Inc. (NASDAQ:PYPL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 87 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the second quarter which was 82 in the previous quarter. PayPal increased its full-year guidance and posted impressive second-quarter results (see the details here). While we acknowledge the potential of PayPal Holdings, Inc. (NASDAQ:PYPL) 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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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