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MasterCard Inc. (MA) and Visa Inc. (V)  have been all-star performers in 2018, with the two stocks up by 37 percent and 24 percent, respectively. One never would have guessed either stock was having a good year, based on hedge fund activity in the first quarter. According to the WhaleWisdom Heat Map, both stocks were in the bottom half of the top 100 stocks.

Both payment processors stocks have gone into overdrive since the end of the first-quarter rising by 18 percent each. The companies reported stellar results for the first quarter and both play vital roles in the heart of the e-commerce ecosystem.

The Rankings


Visa’s ranking on the heatmap fell by 31 spots to 55, while MasterCard rose by eight places to 47. Out of the 150 hedge funds tracked for the heatmap, only 39 of them held MasterCard in their portfolio, and only 11 of them had it in their top-ten holdings. For Visa 48 funds owned the stock, while 16 of them held the shares in their top-ten.

Broader Cutting

When looking outside of the funds that make up the heat map, institutions were also dumping shares of Visa. During the first quarter, the total number of aggregate 13F shares fell by 3 percent. Hedge funds cut their holdings by just over 6 percent.

MasterCard’s stock was also trimmed in the first-quarter, with aggregate 13F shares among institutions falling by over 2 percent.  Hedge funds were also slashing their holdings,  cutting the number of shares held by over 14 percent.

Sentiment Turns

Not only has the sentiment around both stocks changed materially since the end of the first quarter, but the outlook for the two businesses have improved substantially as well. Together, the improving fundamentals and sentiment have led to an impressive run in both stocks over the past three months.

Analysts Turn Bullish

The bearish sentiment on the companies seems surprising given the performance of the stocks in 2018. However, analyst’s estimates for both companies has increased significantly since the start of the year. MasterCard’s earnings estimates have climbed by over 17 percent, while Visa’s have increased by nearly 10 percent. The revenue outlook has improved as well, with MasterCard estimates rising by almost 7 percent, and Visa’s by 2 percent.

Price targets on both stocks have increased dramatically as well since the start of 2018.  MasterCard’s price target has increased by nearly 29 percent, while Visa’s has increased by almost 17.5 percent.

Based on the performance for each stock during the second quarter, and the start of the third-quarter, both Visa and MasterCard’s ranking among institutions and hedge funds has likely improved substantially since the end of the first-quarter.

This entry was posted on Monday, July 23rd, 2018 at 8:17 am and is filed under HeatMap. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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