5 Best Stocks To Buy and Hold For 5 Years: Cathie Wood’s Picks

3. Square Inc. (NASDAQ:SQ)

Cathie Wood can’t stop talking about Square’s cashapp. She had nearly $950 million invested in the stock at the end of September. Billionaire hedge fund managers Philippe Laffont’s and Stephen Mandel’s hedge funds also had around $900 million in SQ. Touch Stone Capital explained the bullish thesis on SQ in its Q1 investor letter:

“Square is a provider of innovative financial products for small-to-medium businesses (SMBs) and individual consumers. Software is replacing bank branches as the predominant distribution point for financial services, and the market segments where Square focuses— SMBs and consumers—are two groups that we view as most amenable to automation and digitization. Square’s SMB business pioneered the self-serve and software-enabled models for payment processing—enabling millions of SMBs to accept cards for the first time—and has since evolved into a suite of financial tools for SMB sellers to manage their operations. Square’s consumer-oriented Cash App grew from a project that created the U.S.’s first instant and direct bank-to-bank transfer service. Today, it has grown into a full-service, multiproduct consumer finance business. We believe its frictionless, low-cost offerings represent a strong value proposition for the 60 million U.S. adults currently unbanked or underbanked. We believe Square will sustain above-market volume growth via share gains and upmarket expansion, with margin expansion driven by sales & marketing and R&D efficiency.”