5 Best Canadian Stocks to Buy and Hold

2. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 74

Shopify Inc. (NYSE:SHOP) shares have rewarded investors this year, having gained about 35% year to date. Shopify Inc. (NYSE:SHOP) moved primarily on the company’s deal with Amazon after Shopify merchants can offer a Buy with Prime option for payment processing. Many Wall Street analysts see this deal as a win-win for both companies.

A total of 74 hedge funds tracked by Insider Monkey were long Shopify Inc. (NYSE:SHOP) as of the end of the second quarter of 2023, significantly up from 66 hedge funds in the previous quarter.

RiverPark Large Growth Fund made the following comment about Shopify Inc. (NYSE:SHOP) in its Q2 2023 investor letter:

“Shopify Inc. (NYSE:SHOP): Shopify shares were a top contributor in the quarter following strong 1Q results and the announced divestiture of its logistics business. Gross Merchandise Volume (GMV) grew 15% year over year as e-commerce sales broadly rebounded and Shopify continued to take market share. Revenue grew 25% driven by increased merchant adoption of multiple products, especially Shop Pay. The company generated $86 million of free cash flow, up from a $46 million loss last year, and announced expectations to be free cash flow positive for each quarter for the rest of the year. The company had previously announced several cost savings plans, which are driving margin and free cash flow improvement, and now plans to divest its capital-intensive logistics arm. Faster growing revenue, lower operating expenses, and a less capital-intensive future were all cheered on by the market.

Last year, 10% of US retail e-commerce sales flowed through SHOP, second only to Amazon, and the company is still enjoying significant tailwinds as retail merchants of all sizes adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services, such as its digital wallet Shop Pay, should continue to drive revenue growth of more than 20% per year over the next several years, accompanied by re-acceleration of operating margin growth and FCF generation.”