In this article, we will be looking at the 5 best e-commerce stocks to buy in 2021. To see our detailed analysis of e-commerce stocks, you can go directly to see the 16 Best E-Commerce Stocks to Buy in 2021.
5. JD.com, Inc. (NASDAQ: JD)
Number of Hedge Fund Holders: 75
JD.com, Inc. (NASDAQ: JD) is an e-commerce company and retail infrastructure provider in China. The company has two segments: JD Retail, and New Businesses. It ranks 5th on our list of the best e-commerce stocks to buy in 2021.
This May, JD Logistics under JD.com, Inc. (NASDAQ: JD) rose 3% and raised $3.1 billion in the second-largest IPO in Hong Kong so far this year. In the first quarter of 2021, JD.com, Inc. (NASDAQ: JD) had an EPS of $0.38, beating estimates by $0.03. Its revenue was $31.57 billion, up 53.34% year over year and beating estimates by $1.6 billion. The company has a gross profit margin of 7.92% and JD.com, Inc. (NASDAQ: JD) has gained 26.14% in the past year.
By the end of the first quarter of 2021, 75 hedge funds held stakes in JD.com, Inc. (NASDAQ: JD) worth roughly $11.3 billion. This is compared to 89 hedge fund holders in the previous quarter with a total stake value of approximately $14.39 billion.
Arisaig Partners, an investment management firm, mentioned JD.com, Inc. (NASDAQ: JD) in their first-quarter 2021 investor letter. Here’s what they said:
“Our largest holding as a firm, JD.com, we expect to grow earnings at an annualised rate of 30% over the next five years, implying it will trade on an EV / EBITDA of 7.5x at the end of this period. Is this a growth stock or a value stock? Does anyone care? Do these labels really matter?
For the Asia Fund, with a higher pre-existing allocation to our core FMCG holdings coming into the year, we took advantage of capital market volatility to further concentrate on our highest conviction names. JD.com has been the main destination for our limited reallocations as evidence continues to emerge supporting our thesis that the company has a strong right-to-win in the large and highly fragmented USD1.8th Chinese grocery market. We have also been encouraged by the fact that after years of persistence, the company is beginning to engage with us on ESG issues (we have specifically discussed data protection, climate change and the circular economy). ESG is now being considered at the board level, and specific sustainability reporting should follow in the coming months. Having long displayed a healthy obsession with customer service, we interpret these latest conversations as a sign that JD is beginning to develop a more sophisticated understanding of its impact on all stakeholders.”
4. Shopify Inc. (NYSE: SHOP)
Number of Hedge Fund Holders: 91
Shopify Inc. (NYSE: SHOP) is a commerce company operating in Canada, the US, the UK, Australia, Latin America, and internationally. The company’s platform allows merchants to run their businesses on a range of sales channels including web and mobile storefronts and social media channels. It ranks 4th on our list of the best e-commerce stocks to buy in 2021.
On June 30th, despite investors’ disappointment at Shopify Inc.’s (NYSE: SHOP) Unite 2021 event, analysts from Loop Capital, RBC, and Jefferies stepped in to defend the stock. Loop Capital reiterated its Buy rating on the stock, with an increased price target of $1,600, and analyst Anthony Chukumba saying he felt more confident in Shopify Inc.’s (NYSE: SHOP) future growth. RBC also increased its price target to $1,700, while Jefferies has a Buy rating on the stock as well. Shopify Inc. (NYSE: SHOP) has announced a new Online Store and Shopify Theme Store launch as well and has furthered its partnership with Facebook, Inc. (NASDAQ: FB) and Alphabet Inc. (NASDAQ: GOOG) by making its one-click checkout available to sellers on Facebook and Google.
In the first quarter of 2021, Shopify Inc. (NYSE: SHOP) had an EPS of $2.01, beating estimates by $1.26. The company’s revenue was $988.65 million, up 110.35% year over year and beating estimates by $127.56 million. It has a gross profit margin of 53.46% and the stock has gained 33.47% in the past 6 months and year to date.
By the end of the first quarter of 2021, 91 hedge funds held stakes in Shopify Inc. (NYSE: SHOP) worth roughly $9.98 billion. This is compared to 90 hedge fund holders in the previous quarter with a total stake value of approximately $8.72 billion.
3. Sea Limited (NYSE: SE)
Number of Hedge Fund Holders: 98
Sea Limited (NYSE: SE) is a company engaging in digital entertainment, e-commerce, and digital financial services in Southeast Asia, Latin America, the rest of Asia, and internationally. The company ranks 3rd on our list of the best e-commerce stocks to buy in 2021.
In light of the company’s growth exceeding expectations in Southeast Asia and Latin America, BofA upgraded Sea Limited (NYSE: SE) to Buy with a hiked price target of $340, this June. 3G Capital Partners fund also boosted its stake in Sea Limited (NYSE: SE) this May. In the first quarter of 2021, Sea Limited (NYSE: SE) had an EPS of -$0.62, missing estimates by -$0.05. Its revenue was $1.76 billion, up 92.98% year over year but missing estimates by $16.69 million. The company has a gross profit margin of 32.95% and has gained 38.89% in the past 6 months and year to date.
By the end of the first quarter of 2021, 98 hedge funds held stakes in Sea Limited (NYSE: SE) worth roughly $10.4 billion. This is compared to 115 hedge fund holders in the previous quarter with a total stake value of approximately $10.8 billion.
ClearBridge Investments, an investment management firm, mentioned Sea Limited (NYSE: SE) in its first-quarter 2021 investor letter. Here’s what they said:
“Singapore-based Sea maintains leading positions in Southeast Asia in video games and e-commerce and operates an emerging digital payments and banking business. While the company is investing heavily into e-commerce and payments, this growth is being funded by its highly profitable gaming segment. We see a long runway for growth across Sea’s businesses with multiple opportunities like e-commerce expansion in Latin America not fully factored into the valuation today. The company also has a well-respected management team that has successfully executed in expanding its total addressable market. Along with existing holding Alibaba, Sea provides exposure to secular growth trends in emerging markets that are harder to replicate through U.S. stocks.”
2. Alibaba Group Holding Limited (NYSE: BABA)
Number of Hedge Fund Holders: 135
Alibaba Group Holding Limited (NYSE: BABA) provides online and mobile commerce businesses in China and internationally. The company operates various online wholesale markets including AliExpress, Lazada, and Tmall Global, among others. It ranks 2nd on our list of the best e-commerce stocks to buy in 2021.
On June 21st, ZIM Integrated Shipping Services Ltd. (NYSE: ZIM) and Alibaba Group Holding Limited (NYSE: BABA) added two years to their partnership enabling the latter’s e-commerce merchants to book sea freight and other services from the former. In the fiscal fourth quarter of 2021, Alibaba Group Holding Limited (NYSE: BABA) had an EPS of $1.60, missing estimates by -$0.17. Its revenue was $29.05 billion, up 81.18% year over year and beating estimates by $1.13 billion. Alibaba Group Holding Limited (NYSE: BABA) has a gross profit margin of 41.28%.
By the end of the first quarter of 2021, 135 hedge funds held stakes in Alibaba Group Holding Limited (NYSE: BABA) worth roughly $15.49 billion. This is compared to 156 hedge fund holders in the previous quarter with a total stake value of approximately $17.89 billion.
Polen Capital Management recently released its Q1 2021 Investor Letter, where it mentioned Alibaba Group Holding Limited (NYSE: BABA). Here’s what they said:
“Alibaba also detracted from performance as the company continues to remain under regulatory scrutiny from both the Chinese State Administration for Market Regulation on antitrust concerns and the U.S. Securities and Exchange Commission on ADR listing requirements. Despite the regulatory overhang, we believe that Alibaba’s competitive positioning and growth outlook remains intact, even if the company must pay fines or modify some business practices. We viewed the current valuation at <20x next twelve month’s earnings as a compelling opportunity to add to our position. Alibaba is the second largest position in the Portfolio.”
1. Amazon.com, Inc. (NASDAQ: AMZN)
Number of Hedge Fund Holders: 243
Amazon.com, Inc. (NASDAQ: AMZN) is a tech giant operating in the retail sale of consumer products and subscriptions in the US and internationally. The company has three segments, North America, International, and Amazon Web Services. It ranks 1st on our list of the best e-commerce stocks to buy in 2021.
On June 29th, Amazon.com, Inc. (NASDAQ: AMZN) acquired SmartLess rights for about $60-80 million, with new episodes due to appear on Amazon Music and Wondery this August. This month, Switzerland’s leading telecom company Swisscom also picked Amazon.com, Inc. (NASDAQ: AMZN) as its partner in public cloud provision. In the first quarter of 2021, Amazon.com, Inc. (NASDAQ: AMZN) had an EPS of $15.79, beating estimates by $6.15. The company’s revenue of $108.52 billion was up 43.82% year over year and beat estimates by $3.89 billion. The stock has gained 7.73% in the past 6 months and year to date, while Amazon.com, Inc. (NASDAQ: AMZN) also has a gross profit margin of 40.48%.
By the end of the first quarter of 2021, 243 hedge funds held stakes in Amazon.com, Inc. (NASDAQ: AMZN) worth roughly $50.4 billion. This is compared to 273 hedge fund holders in the previous quarter with a total stake value of approximately $51.5 billion.
You can also take a peek at the 15 Best Retail Stocks for 2021 and Top 15 Online Shopping Websites in 2020.
