Soumya Eswaran
3 min read
In This Article:
Sound Shore Management, an investment management firm, has released its investor letter for the first quarter of 2025. A copy of the letter can be downloaded here. The fund’s Investor Class (SSHFX) and Institutional Class (SSHVX) declined 1.93% and 1.89% respectively, in the first quarter of 2025 compared to a 2.14% return for the Russell 1000 Value Index (Russell Value) and -4.27% return for the Standard & Poor 500 Index (S&P 500). Sound Shore’s 35-year annualized returns were 10.13% and 10.41% for SSHFX and SSHVX, respectively, as of March 31, 2025, and were ahead of the Russell Value at 9.81% and trailed the S&P 500 at 10.56%. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Sound Shore Management highlighted stocks such as PayPal Holdings, Inc. (NASDAQ:PYPL). PayPal Holdings, Inc. (NASDAQ:PYPL) is a technology platform that enables digital payments. The one-month return of PayPal Holdings, Inc. (NASDAQ:PYPL) was 6.90%, and its shares gained 13.32% of their value over the last 52 weeks. On May 23, 2025, PayPal Holdings, Inc. (NASDAQ:PYPL) stock closed at $69.85 per share with a market capitalization of $67.931 billion.
Sound Shore Management stated the following regarding PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q1 2025 investor letter:
"Along with concerns about a slowing economy and consumer spending, holdings PayPal Holdings, Inc. (NASDAQ:PYPL) and Disney fell after strong finishes to 2024, despite both having very solid balance sheets. Notwithstanding the economic worries, each has internal change that is driving improved profitability. PayPal is a digital and mobile payments pioneer that we were able to add to the portfolio in the third quarter of 2024 when it was trading below normal at 16 times earnings. A new management team, led by Intuit veteran Alex Chris, has targeted improvements in product and pricing to help drive margins higher. With $5.5 billion in net cash on the balance sheet, including long-term investments, the company is buying approximately 6% of the outstanding shares annually and PayPal remains a full position."
A consumer in a cafe paying for goods using a mobile payment app.
PayPal Holdings, Inc. (NASDAQ:PYPL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 92 hedge fund portfolios held PayPal Holdings, Inc. (NASDAQ:PYPL) at the end of the first quarter which was 94 in the previous quarter. 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 undervalued AI stock set for massive gains.
