7 Best E-commerce Stocks To Buy According to Hedge Funds

6. Sea Limited (NYSE:SE)

Number of Hedge Fund Holders: 63

Sea Limited (NYSE:SE) ranks sixth on our list of the best e-commerce stocks to buy according to hedge funds. The technology company operates across three segments including e-commerce, digital financial services, and digital entertainment. The Singaporean company launched its e-commerce platform, Shopee in 2015, which is now functional in 8 countries.

While Shopee had negative EBITDA in Q2 2024, its revenue grew by 34% to reach $2.8 billion. In addition to that, Sea Limited (NYSE:SE) expects Shopee to report positive EBITDA by Q3 2024, consequently revising its gross merchandise value (GMW) growth rate guidance to mid-20%. During the quarter, the company worked on improving its ad take rate by developing stronger ad algorithms. In the same quarter, sellers who pay for ads went up by 20%.

As far as product deliveries are concerned, Sea Limited (NYSE:SE) is making significant progress. SPX, also referred to as Shopee Xpress, is an integrated logistics service by Shopee that delivered over 70% of orders placed in Asia within 3 days in Q2 2024. During the same quarter, the company also launched a “no questions asked return” program. This policy pushed buyers to manage order returns as efficiently as possible, oftentimes within 24 hours.

Overall, in Q2 2024, Shopee saw a 40% increase in gross orders and a 29% increase in gross merchandise value. The company has a strong presence in its markets with solid fundamentals and consistent financials.

Artisan Partners stated the following regarding Sea Limited (NYSE:SE) in its Q3 2024 investor letter:

“Top contributors to performance for the quarter included Southeast Asian e-commerce leader Sea Limited (NYSE:SE). Sea rose due to an improved competitive environment in its Shopee e-commerce business that set the stage for commission increases, while a positive inflection in its gaming business surprised market participants.”