Goldman Sachs Stock Portfolio: Top 5 Large-Cap Stock Picks

3. Block, Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 72

Block, Inc. (NYSE:SQ) is a California-based payments technology firm. Securities filings for Q2 2022 reveal that the Goldman Sachs stock portfolio featured 21.4 million shares of Block, Inc. (NYSE:SQ), worth $2 billion and representing 0.45% of the total holdings. Block, Inc. (NYSE:SQ) acquired Afterpay in early 2022 to gain entry to the rapidly growing BNPL sector. Afterpay has enhanced its “Buy Now, Pay Later” category to include an option for monthly payments on purchases of between $400 and $4,000. 

On November 1, Evercore ISI analyst David Togut added Block, Inc. (NYSE:SQ) to the firm’s “Tactical Underperform” list ahead of the company’s Q3 earnings report, stating that he sees “7 reasons to sell SQ stock.” He kept an Underperform rating and a $49 price target on Block, Inc. (NYSE:SQ).

According to Insider Monkey’s data, 72 hedge funds were long Block, Inc. (NYSE:SQ) at the end of June 2022, compared to 84 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest position holder in the company, with 9.13 million shares worth $799.45 million. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:

“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”

Given this cash-generation power, we are naturally drawn to what we believe are strong and profitable financial institutions when the price is right. Presently, we believe the valuations of our financial holdings are not only reasonable, but extremely compelling, and our portfolio composition reflects this view. Representative financial holdings in the Fund include Wells Fargo.”