1. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 68
Shopify Inc. (NYSE:SHOP) is a Canadian commerce company that empowers merchants to showcase, manage, market, and sell products through web and mobile storefronts, physical retail locations, social media, and online marketplaces. Shopify Inc. (NYSE:SHOP) ranks 1st on our list of the best Canadian stocks. On February 13, the company reported a Q4 non-GAAP EPS of $0.34 and a revenue of $2.14 billion, outperforming Wall Street estimates by $0.04 and $70 million, respectively.
According to Insider Monkey’s fourth quarter database, 68 hedge funds were long Shopify Inc. (NYSE:SHOP), compared to 69 funds in the last quarter. Rajiv Jain’s GQG Partners is the largest stakeholder of the company, with 7 million shares worth $546.5 million.
Rowan Street Capital stated the following regarding Shopify Inc. (NYSE:SHOP) in its 2023 annual investor letter:
“Shopify Inc. (NYSE:SHOP) is an all-in-one e-commerce platform that empowers businesses of all sizes to build, manage, and grow their online stores. Founded in 2006, Shopify now holds a commanding >10% market share in US e-commerce.
The value of Shopify lies in its simplicity for merchants to easily start and scale their business, so much so that merchants fall in love with their solutions and never want to leave, no matter how big they get. They understand that as they grow and confront new challenges, Shopify will solve their problems so they can take their business to the next level. That is the power of Shopify’s flywheel.
We have owned Shopify’s stock since 2022. Our average cost basis is $60. Following our purchase, the stock hit a low of $26 in October 2022. Just 15 months following those lows, Shopify stock is now trading at $80 (a 200% rebound) as investors celebrated the decision to sell its capital intensive logistics business, which was largely expected to cost billions of dollars to build out — a move that enables Shopify to retain its original, asset-light business model. Additionally, while many tech companies struggled in the face of macroeconomic challenges, Shopify defied expectations by maintaining robust revenue growth in 2023. Revenue increased by 25% year-over-year in the most recent quarter, with gross profit growing by a healthy 36%. We are now sitting on a +35% unrealized gain on our position after owning the stock for almost 2 years. Not a bad return, but what a wild ride it has been. Just another example that volatility is the price of admission in this business.”
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