10 Best Stocks to Buy and Hold For 5 Years According to Cathie Wood

5. Block, Inc. (NYSE:SQ)

Ark Investment’s Q4 2020 Investment Stake: $1.5 billion

Number of Q1 2024 Hedge Fund Investors: 65

Share Price Performance Since 2020 End: -70.37%

Block, Inc. (NYSE:SQ) is a financial technology company that allows users and retailers to make and receive payments and manage their finances. Since it’s one of the new age financial technology companies that enable customers to rely on non banking mediums for their money management, Block, Inc. (NYSE:SQ) has a large market at its disposal, particularly through its CashApp platform. Yet, this reliance on the retail end of the financial industry means that Block, Inc. (NYSE:SQ) is also dependent on the economy for its performance. The more robust the economy is, the higher incomes are, and the lower the prices go, the money Block, Inc. (NYSE:SQ) can make through CashApp and Square transactions. Therefore, any weakness in the stock can manifest itself if the US economy struggles and consumers decide to dial down their purchases.

Block, Inc. (NYSE:SQ) is one of the oldest stocks in Ark Investment’s portfolio. According to Insider Monkey’s data, the firm first bought the shares in 2016 by acquiring a $3.1 million stake. Since then, the shares have appreciated by 416%. Baron Funds mentioned Block, Inc. (NYSE:SQ) in its Q1 2024 investor letter. Here is what the firm said:

During the quarter, we also added to our existing investment in Block, Inc. The company provides a point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. After the company reported solid quarterly result, it has also guided to reach a rule of 40 on GAAP profitability for fiscal year 2026 (implying that the combination of gross profit growth and GAAP operating margins would be at least 40%). We believe Block’s businesses are resilient, and greater management focus on cost discipline should drive further margin expansion over the long term. We also believe that Block has a long runway for growth, durable competitive advantages, and a robust track record of innovation.