Billionaire Daniel Sundheim is Buying These 5 Tech Stocks

2. Farfetch Limited (NYSE:FTCH)

Sundheim’s Stake Value: $474.5 million

Percentage of Daniel Sundheim’s 13F Portfolio: 3.1%

Number of Hedge Fund Holders: 63

Farfetch Limited (NYSE:FTCH) is a UK-based company that owns and runs an online marketplace for luxury fashion apparel. It is ranked second on our list of the 10 tech stocks billionaire Daniel Sundheim is buying.

On October 4, Wedbush analyst Tom Nikic initiated coverage of Farfetch Limited (NYSE:FTCH) with a Neutral rating and $38 price target on its shares.

Latest data shows that D1 Capital Partners owned 9.42 million shares in Farfetch Limited (NYSE:FTCH) in the second quarter of 2021, worth $474.5 million, representing 3.1% of the portfolio. At the end of the second quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $4 billion in Farfetch Limited (NYSE: FTCH), up from 57 in the previous quarter worth $3 billion.

On August 19, Farfetch Limited declared its revenue generated for the second quarter of 2021 at $523.31 million, surpassing the forecast revenues estimates by $26.97 million.

In its Q1 2021 investor letter, RiverPark Funds, an asset management firm, commented on the growth and profits of Farfetch Limited (NYSE:FTCH). Here is what the fund said:

“We established a small position in e-commerce company Farfetch, which is benefitting from the secular trends of growing ecommerce, the global market for personal luxury goods, and emerging market growth, particularly in China. The company is an e-commerce platform like Amazon, Mercado Libre, or Alibaba, and is the leading online luxury fashion retail platform.

Luxury fashion has much lower online penetration than general ecommerce, and Farfetch is differentiated because of its longstanding relationships with the generally family-controlled, brand-protective luxury product companies. Because of its luxury focus, Farfetch has both higher average order values and higher take rates relative to peers, driving higher gross margins.

In its recently ended fiscal 2020, Farfetch grew revenue 64% and gross profit 68%, the company should be EBITDA positive this year, and we believe the company can grow revenue more than 20% per year and EBITDA more than 50% per year for the foreseeable future. With its extremely low capital needs—capital expenditures were less than 2% of revenue last year—we expect the company’s free cash flow to grow even faster.”