Hedge Funds are Selling These 5 Cathie Wood Stocks

4. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 72

Decline in Hedge Fund Holders: 14

ARK Investment Management’s Stake Value: $610.43 million

Percentage of ARK Investment Management’s Portfolio: 2.54%

Shopify Inc. (NYSE:SHOP) operates e-commerce platform Shopify, and is based in Canada. Its shares represented 2.54% of Cathie Wood’s first quarter portfolio, with 903,000 shares priced at $610.4 million. This was a 27% increase in holding over the previous quarter, where Wood owned 715,000 shares of the company.

But Cathie Wood went against the larger hedge fund sentiment around Shopify Inc. (NYSE:SHOP) stock. 72 bullish bets on the company shares at the close of the first quarter showed a negative trend from the previous quarter, where 86 hedge funds were long on Shopify Inc. (NYSE:SHOP) shares. The aggregate value of Q1 holdings stood at $5.78 billion.

Jefferies analyst Samad Samana on May 23 reiterated a ‘Buy’ rating on Shopify Inc. (NYSE:SHOP) shares, and reduced the firm’s price target to $475 from $550. The analyst sees consumer behavior patterns shifting amidst a slowdown in e-commerce spending.

Shopify Inc. (NYSE:SHOP) posted $1.2 billion in revenue for the first quarter, falling below estimates by $36.4 million. EPS was recorded at $0.20, also missing analysts’ estimates by $0.45.

Baron Funds, an investment firm, mentioned the prospects of Shopify Inc. (NYSE:SHOP) in its Q1 2022 investor letter. The fund said:

Shopify Inc. is a cloud-based software provider offering an operating system for multi-channel commerce. Shopify has been adopted by over two million merchants who processed $175 billion of gross merchandise volume in 2021, making it the second largest e-commerce player in the U.S. The stock corrected sharply in the first quarter, declining 51%, as a result of investor rotation out of fast-growing, long-duration stocks and after the company released quarterly results, expecting a normalization in the rapid growth it has experienced during the early stages of the pandemic. We remain shareholders as we believe Shopify has a long runway for growth addressing less than 1% of global commerce spending with a unique and competitively advantaged platform.”