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Is Paypal Holdings (PYPL) Stock a Buy For 2021?

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Alex Smith
·3 min read
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Wedgewood Partners recently released its Q4 2020 Investor Letter, a copy of which you can download here. The Fund returned 12.2% for the fourth quarter of 2020. Meanwhile, the benchmark S&P 500 Index and the Russell 1000 Growth Index gained 12.2% and 11.4%, respectively. You should check out Wedgewood Partners' top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q4 2020 Investor Letter, Wedgewood Partners highlighted a few stocks and Paypal Holdings Inc. (NASDAQ:PYPL) is one of them. Paypal Holdings Inc. (NASDAQ:PYPL) operates an online payments system in majority of countries that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders. In the last three months, Paypal Holdings Inc. (NASDAQ:PYPL) stock gained 19.2% and on January 14th it had a closing price of $242.06. Here is what Wedgewood Partners said:

"PayPal continued its torrid pace of payment volume growth, up +38% during the quarter, driven by over 15 million new accounts (almost double the pre-pandemic rate) and continued increases in transactions per account. This led to +25% growth in revenue and hefty margin expansion as the Company continues to effectively leverage its fixed cost base. PayPal’s addressable market continues to be a multitrillion dollar opportunity, with the Company particularly focused on the faster growing and more lucrative e-Commerce channel."

Paypal PYPL Mastercard MA Visa
Paypal PYPL Mastercard MA Visa

www.BillionPhotos.com / Shutterstock.com

Earlier this month, we published an article highlighting whether cashless transactions are actually good for Paypal Holdings Inc. (NASDAQ:PYPL).

In Q3 2020, the number of bullish hedge fund positions on Paypal Holdings Inc. (NASDAQ:PYPL) stock increased by about 4% from the previous quarter (see the chart here), so a number of other hedge fund managers believe in Paypal's growth potential. Our calculations showed that Paypal Holdings Inc. (NASDAQ:PYPL) is ranked #8 among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website:

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