Shopify Inc $ 1301.15 0.91 (0.07%)
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Shares of application software company The Trade Desk Inc. (TTD) gained more than 6% on Friday following the announcement of strong fourth-quarter and full-year 2020 results after the closing bell on Thursday.
Trade Desk has gained more than 525% in market value since March 18 after a sequence of strong earnings results. This has pushed its price-earnings ratio to the highs of 310, which implies a significant overvaluation. However, the current rise in stock price was triggered by a change in advertising trends necessitated by the pandemic.
The company sees
For more than 50 years, Davis New York Venture Fund has built wealth through recessions and expansions, crashes and bubbles, fear and euphoria. In 2020, our decades of experience proved invaluable, allowing us to chart a steady course through a tumultuous year that included the culmination of a decade of economic expansion, followed by the worst economic contraction in a century. A year that began with the stock market surging to a record high, succeeded by the fastest 30% market drop ever. A year that witnessed the highest unemployment since the Great Depression and the biggest upside payroll surprise
2020 was a year unlike any other in the history of the stock market. Despite the dark clouds hanging over the U.S. and global economy, the S&P 500 Index appreciated 16% in the last year, supported by unprecedented measures taken by both the Federal Reserve and fiscal policymakers to revive business activities. The new year definitely brings new opportunities, but 2021 is unlikely to be similar to any other year as well. It would have been relatively easy to predict the winning business sectors during an economic recovery phase under normal circumstances. This time around, however, investors need to be
Aaron Edelheit of Mindset Capital wrote a post about a talk he had with my friend and fellow investor Fred Liu. One of the concepts discussed was the Power Law Distribution. Applied to the market, this means most of the value created comes from a small minority of companies. This is the 80/20 Rule. Baseball geeks like me reference the term slugging percentage.
End of mean reversion?
Aaron's main point in his post is that the Power Law appears to be impacting one of the most reliable laws of capitalism: mean reversion.
I've been tinkering with this idea for
The third quarter was undeniably another bull run for stock markets with the major U.S. indexes reaching unprecedented highs. The S&P 500 surpassed 3,500 for the first time in history, the Nasdaq rocketed above 11,000 and the Dow Jones Industrial Average came within a few hundred points of recovering from its pre-Covid highs.
As a result, the U.S. stock market is more overvalued than ever. The Buffett Indicator, which is the ratio of total market cap to gross domestic product, stands at 182.3% as of Dec. 4, indicating that the U.S. stock market is significantly overvalued. This metric is named
In all this tech euphoria and Covid-19 quarantining, investors are missing a key fact: people need people. In the song, "People," writer Bob Merrill and composer Jule Styne wrote and composed it best:
People who need people,
Are the luckiest people in the world
We're children, needing other children
And yet letting a grown-up pride
Hide all the need inside
Acting more like children than children
Barbra Streisand sang it best; academic studies prove that people who get normal human interaction have much better mental health. Despite this fact, investors have been scrambling to capitalize
Financial technology solutions providers like The OLB Group Inc. (OLB) witnessed their fair share of struggles in the early months of the Covid-19 pandemic, when most brick-and-mortar retail businesses were badly hit due to the lockdown. The number of transactions processed fell despite the strong adoption of e-commerce solutions by traditional retailers. However, there has been a strong revival in this segment over the past quarter with the lockdown restrictions being lifted and more and more consumers going back to traditional retailers and merchants. This has resulted in a marked improvement in the financial position of OLB Group. The payment
Investors focused on tech growth stocks may want to consider the following companies, as their quarterly revenue and net income have had strong growth on a year-over-year basis.
The first stock which tech growth investors may want to consider is Salesforce.com Inc (CRM), a San Francisco-based developer of customer relationship management focused cloud computing solutions for businesses worldwide.
Salesforce.com Inc saw its quarterly revenue grow by nearly 29% year over year to $5.151 billion as of the second quarter of fiscal 2021, up from $3.997 billion in the same quarter of the previous fiscal
The financial technology space, often clubbed together as "fintech," is often considered one of the hottest sectors in the world, not just within the listed space but also among private equity and venture capital players.
As fintech companies have made new in-roads, their offerings to merchants have increased from simple payment gateway systems to a plethora of data analytics offerings. The dependence of businesses on fintech applications is increasing by the day and the valuations of these companies are skyrocketing.
It is rare to find a stock within this industry that isn't trading at a double-digit price-sales ratio, which is
Frank Sands (Trades, Portfolio)' Sands Capital Management manages a $41.32 billion equity portfolio composed of 77 stocks as of the quarter's end. The firm sold shares of the following stocks during the second quarter of 2020.
The fund trimmed its position in Alibaba Group Holding Ltd. (BABA) by 20.58%. The trade had an impact of -1.17% on the portfolio.
The Chinese online and mobile commerce company has a market cap of $690.20 billion and an enterprise value of $675.85 billion.
GuruFocus gives the company a profitability and growth rating
For years, big brands led the market higher. Whether it was Procter & Gamble (PG), Nike (NKE), Nestle (XSWS:NESN) or Johnson & Johnson (JNJ), investors flocked to these blue-chip stocks.
The rise of big brands makes sense given the historical paradigm. For decades, distribution, stocking and promotion were expensive activities. Only the biggest were able to compete. And the bigger a brand got, the stronger it became.
Let's use Procter & Gamble's Tide detergent as an example. Consumers love this brand. Since 1949, it's been the leading detergent in the U.S. This isn't necessarily because Tide
Although the world was still processing the full extent of the COVID-19 virus and its economic impact early in the quarter, equity markets quickly began to rebound from their March lows. Through April, May and the beginning of June, markets climbed the proverbial “wall of worry”, as lockdowns eased, and some positive economic data provided optimism for a “V”-shaped recovery. Aggressive fiscal and monetary stimulus, including central bank asset purchases, added a further boost to equities and other risk assets. However, in the final few weeks of the quarter, sentiment turned negative after a dramatic rise in COVID-19 cases in
- While current stimulus measures have proved to be an analgesic for economies and markets suffering from the impact of Covid-19, it’s hard to believe that the imbalances built up over a 10-year-plus expansion could be corrected within a single quarter.
- We think the fight against Covid-19 is the key issue investors need to consider at this point. Though financial markets are acting as if the pandemic’s impact has reached an inflection point, epidemiological data would suggest otherwise. The emergence of Covid-19 has produced the greatest blow to demand in a generation, and permanent economic scarring seems likely.
The growth vs. value debate is heating up once again as investors try to determine the best strategy to navigate the current economic crisis.
The challenging macro-economic conditions are revealing flaws in both these strategies. For instance, a few companies that were considered to be safe and sound investments for value investors, notably the leading banks in the U.S., are reeling from the recession, and the sector performance has lagged the broad market by a considerable margin. On the other hand, some high-growth companies are finding it difficult to remain solvent as the policy of using massive cash burn and
In early February, Warren Buffett (Trades, Portfolio) and Berkshire Hathaway (BRK.A)(BRK.B) bought $549 million worth of stock in The Kroger Co. (KR). Whether through luck or skill (we presume more of the latter than the former), he had found a business that would help preserve his and his shareholders’ capital through the current pandemic and economic crisis.
Not that he would have given much attention to the short-term situation, but as a company that would provide ongoing returns for many years.
Kroger is the largest of the traditional supermarket chains, a survivor of the
Facebook Inc. (FB), the largest player in the global social media industry, is one of the few companies that have weathered the recent storm in global capital markets. According to data from GuruFocus, shares are up 5% this year, which is not a bad outcome considering the turmoil in U.S. equity markets that saw shares of some companies shedding more than 50% of their market value.
This performance was fueled by the strong financial performance in the first quarter, but Wall Street analysts are expecting the second quarter to be one of the worst periods in recent memory for Facebook.
On Feb. 14, GuruFocus contributor Robert Stephens wrote that he saw further upside for Shopify Inc. (SHOP), even though its share price had risen 200% in 2019.
How right he was. Exactly three months later, with the stock trading around $750, it is up 41% from the Valentine's Day price of $533. This chart shows prices since the company went public in 2015:
Shopify provides a platform for individuals and companies who want to start or manage a retail store online. In its 10-K for 2019, it offered
Just three months ago, when we wrote to you on the outlook for your portfolio going into 2020, we felt that valuations were reasonable, given low interest rates and a calming of trade wars, but we knew that valuations were not cheap. We maintained a neutral asset mix positioning in our Balanced Fund, having reduced our overweight to equities earlier in 2019 as we became more cautious. We also highlighted that the companies we hold would weather any future economic storm and noted these were inevitable, although we could not predict when. Little did we know that in incredibly short
Shopify Inc. (SHOP) is the third largest cloud-based software provider offering an operating system for multi-channel commerce in the U.S. The company has over one million merchants that have processed over $60 billion in sales during the last year. Shares of Shopify outperformed during the period held in the quarter due to the company’s position in e-commerce, a more resilient segment to COVID-19-related challenges. We believe Shopify has created a platform enabling it to disproportionally benefit from the growth in e-commerce penetration as it further expands its market share over time.
From [url=https://www.gurufocus.com/StockBuy.php?GuruName=Ron+Baron]Ron Baron[/url] ([url=https://www.gurufocus.com/StockBuy.php?GuruName=Ron+Baron]Trades[/url], [url=https://www.gurufocus.com/holdings.php?GuruName=Ron+Baron]Portfolio[/url])'s Baron Partners
Dear Baron Partners Fund Shareholder:
The first quarter of 2020 was an extremely difficult period for global health and the economy. Most financial markets declined substantially, and Baron Partners Fund (the “Fund”) was also significantly impacted. The Fund fell 20.70% (Institutional Shares) in the quarter. That result was relatively similar to many of its comparable benchmarks and peers. The Russell Midcap Growth Index fell 20.04%. The Morningstar US Fund Mid-Cap Growth Category Average and the S&P 500 Index declined 20.64% and 19.60%, respectively.
The historic bull market for the last 11 years came to an abrupt halt as COVID-19