2. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 84
Block, Inc. (NYSE:SQ) is a California-based American financial services and digital payments company that creates tools that enable sellers to accept card payments and provide reporting, analytics, and next-day settlement. The company has millions of dollars invested in digital assets and blockchain technology. Block, Inc. (NYSE:SQ) also operates one of the largest digital payments platforms, the Cash app, which allows for Bitcoin transactions. The stock is one of the best cryptocurrency stocks to buy now.
Analysts are growing bullish on Block, Inc. (NYSE:SQ). This May, Truist analyst Andrew Jeffrey slashed his price target on Block, Inc. (NYSE:SQ) to $145 from $165 but maintained a Buy rating on the shares. Jeffrey contended that The company’s business model, target audience, and growth trajectory are neglected in its valuation. The analyst believes Block, Inc. (NYSE:SQ) is on its way to becoming one of the world’s most prominent FinTech companies. Moreover, on May 20, JPMorgan analyst Tien-Tsin Huang reiterated Block, Inc. (NYSE:SQ) as his top growth pick.
Hedge funds are raising their stakes in Block, Inc. (NYSE:SQ). As of the first quarter of 2022, 84 hedge funds are bullish on Block, Inc. (NYSE:SQ) with stakes worth $6.18 billion. This is compared to 96 positions in the previous quarter with stakes worth $5.95 billion.
ARK Investment Management upped its Q4 2021 stakes in Block, Inc. (NYSE:SQ) by 35%, bringing its Q1 2022 stakes to $1.12 billion. As of March 31, Catherine D. Wood’s hedge fund owns over 8.3 million shares of the company and is the most prominent shareholder.
Here is what Farrer Wealth Advisors had to say about Block, Inc. (NYSE:SQ) in its “Farrer Wealth Managed Solution” first-quarter 2022 investor letter:
“Block (formerly Square): We ‘adopted’ Block’s stock after the company bought Afterpay, which we were investors in. We had been trimming the Afterpay position throughout 2021 and trimmed again after the acquisition, so the position was quite small. We held onto that small portion, as we did think the acquisition made sense and were excited to see the two companies integrate and for Block to create a closed loop network between merchants and consumers. However, the market punished most highly valued tech stocks over the last months, and we saw the position move against us by over 50%. We are firm believers that when a stock goes against you by 50%+, you need to do something about it. Either trim/sell and reinvest or buy more. In the case of Block, the original reason for holding was to see how the acquisition and integration with Afterpay panned out. The market did not give us the time to see this play out, thus we were not comfortable adding more to the position. Further for the stock to recover to our purchase price, we felt the company’s valuation would need to command a future exit multiple that the market would be unlikely to pay in this environment. Given this, we exited the remainder of the position.”
