5 Best TSX Stocks To Buy Now

1. Shopify Inc. (NYSE:SHOP.TO)

Number of Hedge Fund Holders: 60

Shopify Inc. (NYSE:SHOP.TO) is one of the best TSX stocks to invest in. The company provides a commerce platform and related services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. On October 7, The European Commission reported that Shopify Inc. (NYSE:SHOP.TO) has agreed to boost consumer protections after receiving multiple complaints. 

On October 21, RBC Capital analyst Paul Treiber reaffirmed an Outperform rating on Shopify Inc. (NYSE:SHOP.TO) but trimmed the price target on the stock to $55 from $60. The analyst believes Shopify Inc. (NYSE:SHOP.TO) may post Q3 revenue above consensus estimates on the back of stronger gross merchandise volume growth. While macro uncertainty and higher risk-free rates will potentially weigh on Shopify Inc. (NYSE:SHOP.TO)’s valuation through the end of this year, the company “is one of the most compelling long-term growth stories in our coverage universe,” noted the analyst.

According to Insider Monkey’s Q2 data, Shopify Inc. (NYSE:SHOP.TO) was part of 60 hedge fund portfolios, compared to 72 in the prior quarter. Cathie Wood’s ARK Investment Management held a prominent stake in the company, comprising 1.2 million shares worth $455.20 million. 

Here is what Rowan Street Capital specifically said about Shopify Inc. (NYSE:SHOP.TO) in its August 2022 investor letter:

“The following quote from the Q2 earnings call by Toby Lutke (CEO) best explains the transition that Shopify Inc. (NYSE:SHOP)’s business is going through:

‘Shopify has always been a company that makes the big strategic bets our merchants demand of us. This is how we win. During the pandemic, we made a bet that retail spend would disproportionately favor e-commerce at a much higher pace than it has. Our belief was that the channel mix, the share of dollars that travel through e-commerce rather than physical retail, would permanently leap ahead. As we built for the digital leap, we stepped our efforts and expanded the company accordingly. We couldn’t know for sure at the time, but we did know that if the prediction came true, we would have to rapidly scale the company to meet that future. Fast forward to now, as things have turned out differently. While the normalized rate of spend online, which is where most of our merchants’ orders occur, has reset certainly higher than where it was in 2019, the rate is lower than we had planned for. In short, we overshot our prediction. Recalibrating our investments and spending, we are making sure we do not sacrifice the components we feel are critical for Shopify to remain in an enviable position in a massive growing market as an enabler of multichannel commerce.’”

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