5 FinTech Stocks to Buy According to Cathie Wood

1. Block, Inc. (NYSE:SQ)

ARK Investment Management’s 13 Portfolio: 4.7% 

ARK Investment Management’s Stake Value: $1.12 billion

Number of Hedge Fund Holders: 96

Block, Inc. (NYSE:SQ) is a California-based fintech firm founded by Twitter boss Jack Dorsey in 2009. It provides the technology that enables small and medium businesses to accept credit cards and use tablets as POS (Point of Sale) systems. The company was formerly named Square Inc. Cathie Wood upped her stake in Block, Inc. (NYSE:SQ) by 35% over the previous quarter, and as of the end of the first quarter of 2022, owned 8.3 million shares of the firm valued at $1.12 billion. This makes Wood the largest shareholder of the fintech firm.

On May 12, Mizuho analyst Dan Dolev maintained a ‘Buy’ rating on Block, Inc. (NYSE:SQ) shares and lowered the firm’s price target to $135 from $215. Bitcoin represents less than 5% of the firm’s gross profit, and the analyst feels that identifying Block as a ‘crypto stock’ has prevented it from benefiting from strengthening fundamentals. As of May 12, shares of Block, Inc. (NYSE:SQ) are down 53.81% year to date.

96 hedge funds were long Block, Inc. (NYSE:SQ) at the close of the fourth quarter of 2021, as compared to 98 hedge funds a quarter earlier. The company posted revenue of $3.96 billion for Q1 2022, missing estimates by $179.6 million. EPS of $0.18 was also below consensus estimates by $0.02.

Investment firm Farrer Wealth Advisors talked about the prospects of Block, Inc. (NYSE:SQ) in its Q1 2022 investor letter, stating:

“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.”

You can also take a look at 15 Best Technology Stocks To Buy Now and 10 Best Cybersecurity Stocks To Buy Now

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