Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as Mastercard Incorporated (NYSE:MA). Mastercard Incorporated (NYSE:MA) is a payment technology company that offers transaction processing and other payment-related products and services. The one-month return of Mastercard Incorporated (NYSE:MA) was 7.63%, and its shares gained 20.64% of their value over the last 52 weeks. On February 14, 2025, Mastercard Incorporated (NYSE:MA) stock closed at $564.76 per share with a market capitalization of $515 billion.

Bretton Fund stated the following regarding Mastercard Incorporated (NYSE:MA) in its Q4 2024 investor letter:

"Visa and Mastercard Incorporated (NYSE:MA) kept doing their thing, increasing earnings per share by 15% and 12%, respectively, with their stocks returning 22% and 24%. We continue to closely watch the evolving payments space as it seems like everyone’s always trying to displace the card networks. For now, we don’t see anything gaining much traction."

A woman using a payment terminal at the checkout of a store showing payment products and solutions.

Mastercard Incorporated (NYSE:MA) is listed at the 11th position on our list of 30 Most Popular Stocks Among Hedge Funds.  As per our database, 131 hedge fund portfolios held Mastercard Incorporated (NYSE:MA) at the end of the third quarter which was 142 in the previous quarter. Mastercard Incorporated's (NYSE:MA) fourth quarter saw a 16% increase in net revenues and a 19% increase in adjusted net income compared to the previous year on a non-GAAP currency-neutral basis. While we acknowledge the potential of Mastercard Incorporated (NYSE:MA) 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.

In another article we discussed Mastercard Incorporated (NYSE:MA) and shared the list of best GARP stocks that pay dividends. In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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