5 Best Stocks to Buy According to Anand Desai’s Darsana Capital

3. Shopify Inc. (NYSE:SHOP)

Darsana Capital Stake Value: $305,051,000
Percentage of Darsana Capital’s 13F Portfolio: 10.05%
Number of Hedge Fund Holders: 73

Shopify Inc. (NYSE:SHOP) is a cloud-based commerce platform that caters to small and medium-sized enterprises. Shopify Inc. (NYSE:SHOP) reported $336.2 million in subscription revenue in the third quarter, compared to $350.9 million expected.

Of the 73 hedge funds that were bullish on Shopify Inc. (NYSE:SHOP) according to the third quarter database of Insider Monkey, Lone Pine Capital is the leading stakeholder of the company, holding 1.43 million shares worth $1.94 billion.

Anand Desai first bought 225,000 shares of Shopify Inc. (NYSE:SHOP) in the first quarter of 2021. He boosted his stake in the firm by 50% in the third quarter of 2021, and his 10.05% stake in Shopify Inc. (NYSE:SHOP) is now worth about $305,051million.

In its fourth-quarter 2021 investor letter, Guardian Fund mentioned Shopify Inc. (NYSE:SHOP). Here is what the fund said:

“When we first bought the shares in 2016, we were generally right about the fact that Shopify would be an important player in facilitating digital commerce by offering merchants good software. Early on we had a lot of respect for Tobi Lütke and his team, and we understood the enormous opportunity that laid in front of them. Yet, we were terrified by the valuation.

Today, it has become the dominant operating software platform for commerce with over 43,000 ecosystem partners and almost two million merchants. The market value has multiplied, and the valuation is lower than when we initiated the investment. We think that the risk-adjusted expected return is superior today.

At the beginning of 2021, market observers believed that the growth of pure digital commerce enablers like Shopify would come down significantly following a booming 2020 year. Growth remained strong; Shopify’s revenue for the first 9 months of 2021 increased by 65% versus the same period in 2020.

Shopify has two main revenue streams: merchant subscriptions and merchant solutions. The merchant subscription business is a SaaS business where companies pay a certain fixed amount to Shopify each month based on their size. Subscriptions offer revenue visibility to Shopify…” (Click here to see the full text)