In this article, we discuss the 5 best beginner stocks to invest in right now. If you want to read our detailed commentary on which stocks are best for beginners and why, go directly to 10 Best Beginner Stocks To Invest In Right Now.
5. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 84
Block, Inc. (NYSE:SQ) is positioned very cozily within a fast-growing industry. The California-based company founded by Twitter boss Jack Dorsey offers digital payment solutions through Square, a platform which allows small businesses to accept credit cards and use tablets as point of sale (POS) systems; and Cash App, a money transfer platform used by millions across the United States. Block, Inc. (NYSE:SQ) has also recently acquired leading fintech firm AfterPay, which offers Buy Now Pay Later services.
Truist analyst Andrew Jeffrey in May reiterated a ‘Buy’ rating on Block, Inc. (NYSE:SQ) shares, and revised the price target to $145 from $165. The analyst notes that Block has potential to become one of the world’s most important fintech companies, giving competition to big-names such as Visa Inc. (NYSE:V). He thinks long-term investors have a compelling buying opportunity.
Disruptive tech investor Cathie Wood was the largest shareholder of Block, Inc. (NYSE:SQ) in the first quarter, with her ARK Investment Management, holding a $1.12 billion stake in the fintech company. In total, 84 hedge funds were long on the company shares at the end of Q1 2022, with combined positions worth $6.18 billion.
Farrer Wealth Advisors, an investment firm, mentioned many stocks in its Q1 2022 investor letter and Block, Inc. (NYSE:SQ) was one of them. It said:
“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.”
