Echo Street Capital Management: Greg Poole’s Top 5 Stock Picks

2. PayPal Holdings, Inc. (NASDAQ:PYPL)

Echo Street Capital’s Stake Value: $474,927,000

Percentage of Echo Street Capital’s 13F Portfolio: 3.65%

Number of Hedge Fund Holders: 143

PayPal Holdings, Inc. (NASDAQ:PYPL) is a top stock pick of Greg Poole, as of June this year. The financial technology company enables electronic transfer of funds in many countries around the world. Echo Street Capital Management owns 1.62 million shares in PayPal Holdings, Inc. (NASDAQ:PYPL), amounting to $474.9 million, representing 3.65% of the firm’s portfolio for Q2. 

SMBC Nikko analyst Andrew Bauch on November 3 kept an Underperform rating on PayPal Holdings, Inc. (NASDAQ:PYPL), with a $200 price target. He believes that the organic growth potential of the company is insufficient, and PayPal Holdings, Inc. (NASDAQ:PYPL)’s representatives were overly optimistic about the growth in their reports. 

PayPal Holdings, Inc. (NASDAQ:PYPL) is a popular stock with the smart money. At the end of June, 143 out of the 873 hedge funds tracked by Insider Monkey were bullish on PayPal Holdings, Inc. (NASDAQ:PYPL). 

Here is what Alger has to say about PayPal Holdings Inc. (NASDAQ:PYPL) in its Q3 2021 investor letter:

“PayPal Holdings, Inc. was among top detractors from performance. PayPal is a pure play on e-commerce and electronic payments which is driving the company’s high unit volume growth. As a digital payments company, it is helping to facilitate the shift to a cashless society. The coronavirus pandemic has significantly accelerated the adoption of e-commerce and the utilization of digital payments platforms. In our view, PayPal is currently positioned to benefit the strength in e-commerce trends, including increasing net new active users and increased engagement per user. PayPal also has launched a service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account. PayPal’s vision is to become a Super App that integrates payments, commerce and financial services, as well as crypto capabilities. After outperforming earlier in the year, the performance of PayPal shares weakened in the third quarter with the company  facing potentially higher transaction expenses and credit losses.  The higher transaction expenses are driven by a shift by  consumers to the higher cost travel and entertainment  categories which skew toward less profitable credit transactions.”