2. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 49
eBay Inc. (NASDAQ:EBAY) is an American multinational e-commerce company that facilitates B2B and B2C sales transactions via its digital platform. eBay Inc. (NASDAQ:EBAY) was a top NFT pick of Redditors, since the company has a secure marketplace that lists NFTs for purchase, where buyers can discover new and underrated artists for affordable prices as well, and the use of crypto wallets is not a requirement. eBay Inc. (NASDAQ:EBAY) was the first ecommerce company to tap into the NFT frenzy back in May 2021.
On November 29, eBay Inc. (NASDAQ:EBAY) declared a $0.18 per share quarterly dividend, in line with previous. The dividend was paid on December 17, to shareholders of record on December 1. The company also beat market EPS and revenue estimates in the third quarter of 2021.
Nicolai Tangen’s Ako Capital is the largest eBay Inc. (NASDAQ:EBAY) stakeholder as of Q3, holding 7.35 million shares worth $512.5 million. Overall, 49 hedge funds in the third quarter database of Insider Monkey were bullish on eBay Inc. (NASDAQ:EBAY), up from 39 funds in the previous quarter.
JPMorgan analyst Doug Anmuth reinstated coverage of eBay Inc. (NASDAQ:EBAY) with a Neutral rating and a $70 price target on December 15. The analyst noted that eBay Inc. (NASDAQ:EBAY) has executed well to simplify its portfolio and improve margins, however, its product innovation efforts remain in early days.
Here is what Steel City Capital has to say about eBay Inc. (NASDAQ:EBAY) in its Q4 2020 investor letter:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6 . Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
