3 of Bill Ackman's New Stock Picks Are Interesting: S&P Global Trades 28% Below Its High While Visa and Mastercard Sit Near Theirs

Three of Bill Ackman's new stock picks have caught the eye: S&P Global, Visa, and Mastercard. S&P Global's shares have fallen 28% from their 52-week high, while Visa and Mastercard have slipped about 3% and 5% from theirs, respectively. Despite these gaps, all three businesses share common ground: they generate revenue through fees on card payments, debt ratings, and index licensing.

Bill Ackman, the prominent investor behind Pershing Square, recently disclosed significant stakes in all three companies in its recent filings. The disparity in performance can be attributed to several factors. For S&P Global, a recent spin-off of its Mobility division, which includes the CARFAX business, contributed to the drop.

Additionally, the company's growth mix is slowing, with some divisions like Market Intelligence and Energy growing more slowly. In contrast, Visa and Mastercard have shown consistent revenue growth and strong earnings, with Visa's net revenue rising 14% year over year, and Mastercard's revenue up 14% as well. Visa's value-added services revenue grew 20%, and Mastercard's security, analytics, and consulting services revenue climbed 20%.

These factors have led to Visa and Mastercard trading at higher valuations compared to S&P Global. While the card networks' steadier growth may command higher valuations, S&P Global's discount appears justified given its slower-growing divisions. Despite this, S&P Global has posted impressive earnings growth in its core businesses, with adjusted earnings per share rising 23% to $4.83.

The Motley Fool's Stock Advisor analysts did not include S&P Global in their top 10 list of stocks for investment, but the company's recent performance and growth prospects may make it an attractive addition to a long-term investment portfolio.