Netflix, Inc.’s (NFLX) stock experienced steady growth over the past year, outperforming the S&P 500 as of July 2, 2021. The stock saw gains of approximately 64.9% compared to the S&P 500’s increase of about 33.7%. Netflix saw a rise in ranking on the WhaleWisdom Heatmap to an impressive level of five from 43, and hedge funds were buying.

Netflix is an entertainment service company that provides subscription services for customers to enjoy movies and television shows through streaming and DVDs by mail. Netflix initially saw subscriber growth soar during the earlier months of the coronavirus pandemic in 2020, when the government issued stay-at-home orders left customers seeking additional in-home entertainment. However, while Netflix remains a popular service, the rate of increase in their subscriber base ultimately slowed.

Hedge Funds Were Buying

Investors may be encouraged by first-quarter activity as hedge funds were adding to their portfolios. The aggregate 13F shares held by hedge funds increased to about 72.9 million from 71.6 million, a rise of approximately 1.8%. Of the hedge funds, 31 created new positions, 166 added holdings, 49 exited, and 115 reduced their stakes. Overall, institutions were selling and decreased their aggregate holdings by about 0.8% to approximately 353.6 million from 356.5 million.

(WhaleWisdom)

Encouraging Estimates for 2021 and 2022

Analysts expect to see profits rise over the next two years, with increases in growth from 2021 to 2022 that could bring earnings to $13.05 per share in 2022, up from $10.59 for 2021. Revenue is predicted to reach $34.2 billion by December 2022, up from an estimated $29.7 billion in 2021. Also, a historical look at 13F metrics between 2002 and 2020 demonstrates that Netflix’s stock value continues to gain despite plateaus in total 13F shares held.

(WhaleWisdom)

Favorable Ratings

Several investment firms gave Netflix an Outperform rating while maintaining price targets at favorable levels. Credit Suisse Group upgraded the company’s rating to Outperform from Neutral, expecting that subscriber growth will normalize in the fourth quarter. Credit Suisse kept a $586 price target on the stock noting its strong position among competitors. Cowen & Co. maintained an Outperform rating with a $650 price target.

Positive Outlook

Overall, there is a positive outlook for Netflix’s streaming future. Netflix and its competitors have all been beneficiaries of pandemic lockdowns. However, beyond the lockdowns, Netflix has a great business model with a continued strong interest in content from its customer base, leaving its long-term growth and future revenue estimates appealing to investors.

Facebook, Inc. (FB) saw continued growth over the past year, outperforming the S&P 500 and rising by approximately 66.3% compared to the S&P’s gain of about 32.5% since the beginning of 2020. However, hedge funds were actively selling the stock in the first quarter. Still, the company climbed to a ranking of sixteen on the WhaleWisdom Heatmap.

Facebook is a multinational conglomerate and provider of communication services that offer an online application and technologies to connect friends, families, and businesses. Facebook also provides products and services beyond its social networking platform and has acquired other companies such as Instagram, WhatsApp, and Giphy over the past several years.

Hedge Funds Are Selling

Despite solid growth, Facebook saw declines in share ownership, with hedge funds and 13F filers dumping the stock in the first quarter of 2021. Overall, hedge funds decreased their aggregate holdings by about 1.5%, to approximately 439.2 million shares from 446 million. Likewise, the aggregate 13F shares held fell to about 1.85 billion from 1.89 billion. Of the hedge funds, 60 created new positions, 283 added to an existing holding, 40 exited, and 264 reduced their stakes.

(WhaleWisdom)

Additionally, long-term 13F metrics demonstrate an overall upward trend in stock prices over the past fifteen years, indicated investors have not only bought shares in Facebook but have held for the long-term.

(WhaleWisdom)

Encouraging Multi-year Figures

Analysts expect to see earnings rise over the next three years, with growth rates spanning 15.5% to 29.6%. These year-over-year estimated increases could bring earnings per share up to $17.69 in 2023, from $13.07 for 2021. In addition, it is estimated that year-over-year revenue growth will range from 16.9% to 34.2% between 2021 and 2023; this could bring revenue to $160.8 billion by 2023.

Analysts Share Favorable Price Targets

Facebook recently held its annual F8 developer conference, which brought together developers across the globe to celebrate innovation and share the latest on Facebook technologies. Following the annual meeting, analyst Brent Thill of Jefferies Equity commented that Facebook is building a comprehensive toolset beyond core advertising to bring greater value. Thill maintains a Buy rating on the stock and a $385 price target. Ivan Feinseth of Tigress Financial Partners LLC also gave Facebook a Buy rating and initiated a twelve-month target price of $430. Feinseth noted that Facebook continues to benefit from the massive growth in digital advertising.

Positive Outlook

Facebook’s potential continues to grow. Hedge funds may be selling, but analysts are optimistic about the stock, and investors appear to be long-term oriented. Moreover, estimates through 2023 are encouraging for investors, making the company an attractive investment for investors willing to hold shares long-term.

Automatic Data Processing Inc. (ADP) stocks rose over the past two years, though it underperformed the S&P 500. By mid-June 2021, ADP rose by approximately 15.8% compared to the S&P’s gain of about 30.7%. Though hedge funds were selling, the company was added to the WhaleWisdom WhaleIndex 100 on May 19, 2021.

ADP is a provider of cloud-based human resources (HR) and payroll management software, data processing, and services, including analytics and compliance expertise. Their information technology solutions unite HR, payroll, talent, time, tax, and benefits administration. ADP has been weathering the coronavirus pandemic as many of its customers initially faced government shutdowns and were forced to lay off or furlough employees, and in some instances, close businesses. For ADP’s customers that forged through the pandemic, tax changes and payroll nuances presented new challenges, creating more demand for ADP’s services and expertise.

Hedge Funds Are Selling

ADP had a challenging first quarter with hedge funds actively selling the stock. The aggregate 13F shares held by hedge funds decreased to approximately 1.2% to 83.4 million from 84.4 million. Overall, 25 hedge funds created new positions, 96 added to an existing holding, 25 closed out their stakes, and 104 reduced their positions. Institutions decreased their aggregate holdings by about 1.3%, to 335.9 million from 340.4 million.

(WhaleWisdom)

Positive Multi-year Estimates

Analysts expect to see earnings rise over the next four years, with growth from 2021 to 2025 spanning approximately 0.6% to 10.0%. These year-over-year estimated increases could bring profits to $8.60 per share by 2025, up from $5.96 in June of 2021. Revenue predictions include strong year-over-year growth that could bring estimated revenue of approximately $19.5 billion in 2025, up from about $14.9 billion in 2021.

(WhaleWisdom)

Analysts Raise Price Targets

Barclays’ analyst, Ramsey El-Assal, raised ADP’s price target to $212 from $197, maintaining an Overweight rating on the shares. Peter Christiansen from Citigroup also raised their firm’s price target on ADP to $212 while keeping a Buy rating. Christiansen noted that the economy’s reopening from the pandemic should have a positive benefit for ADP. Mizuho Financial Group’s analyst, Dan Dolev, is also optimistic about the stock with a Buy rating. Dolev raised Mizuho’s price target on ADP to $220 from $210 in part due to ADP’s strong execution of services.

Favorable Outlook

ADP continues to experience growth and come back from the initial pandemic-related slump it experienced in February and March 2020. The company has an extensive history in the payroll software and workplace management field, and demand remains strong. With optimistic estimates from analysts, the stock may prove a good long-term acquisition for patient investors.

Alibaba Group Holding Ltd. ADR (BABA) has seen volatility in its stock over the past year and ultimately has underperformed the S&P 500. Alibaba rose just 0.5% as of June 11, 2021, compared to the S&P’s gain of approximately 31.2% since 2020 started. Despite the stock’s struggles, Alibaba rose on the WhaleWisdom Heatmap, achieving a ranking of 24, a nice upward boost from its previous rank of 45.

Alibaba is a Chinese-based online commerce company that hosts merchants and businesses catering to millions of users. The company has a considerable presence worldwide through its three main sites: Taobao, Tmall, and Alibaba. The company has a history of shopping events that garner vendor additions and increased sales from customers. Alibaba’s mid-year online shopping festival has already begun to gather new vendors and brands, with boosts in sales expected to continue into late June.

Alibaba also provides internet infrastructure and content services. The e-commerce company offers a range of high-performing cloud products that bring storage resources and significant data processing capabilities. Additionally, Alibaba sells information technology equipment such as fiber optics and telecommunication tower routers.

Hedge Funds and Institutions Are Selling

The first-quarter activity brought disappointing actions by hedge funds and institutions. Overall, institutions decreased their aggregate holdings by about 12.5% to approximately 886 million from 1 billion. The aggregate 13F shares held by hedge funds decreased to about 229.7 million from 249.7 million, decreasing approximately 8.0%. Of the hedge funds, 53 created new positions, 161 added to an existing holding, 69 exited, and 151 reduced their stakes. The long-term 13F metrics demonstrate that despite less favorable recent changes in hedge funds’ core positions, belief in Alibaba’s investment potential has continued to grow over the past seven years.

(WhaleWisdom)

Cloud of Regulatory Concerns Lingers

The United States continues to examine companies believed to fund China’s military, which may prohibit Americans from investing in such companies. However, Susquehanna analyst Shyam Patil maintains a Positive rating on the stock, with a $350 price target. Patil noted that Alibaba has excellent growth opportunities despite regulatory and listing concerns.

(WhaleWisdom)

Optimism for Future Growth

Alibaba’s investment potential continued to grow over the past seven years, demonstrating a positive track record. The company currently holds a favorable WhaleWisdom ranking of twenty-four. While Alibaba still faces scrutiny as the United States continues to add to its list of companies supporting the Chinese military, growth opportunities beyond 2021 remain attractive for loyal investors.

Snowflake, Inc. (SNOW) has experienced fluctuations in its value over the past eight months, despite overall solid earnings and a rebound in the past few weeks. The company has underperformed the S&P 500, declining approximately 6.1% compared to the S&P’s gain of about 23.9%. Despite a dip in performance, hedge funds and institutions were actively buying the stock in the first quarter. The cloud-based data warehousing company achieved a ranking of four on the WhaleWisdom Heatmap.

Snowflake provides software solutions to customers worldwide and is known for its data warehouses, database architecture, and query optimization. After an impressive initial public offering in 2020, Snowflake continued an upward climb. However, while the company continues to expand its customer base, the shares fell sharply.

Hedge Funds and Institutions Are Active

Snowflake, Inc. has received positive attention from both hedge funds and institutions. Hedge funds increased their aggregate 13F shares held to approximately 110.0 million from about 46.2 million in the first quarter, an impressive increase of about 138.3%. Of hedge funds, 80 created new positions, 47 added to existing holdings, 19 exited, and 22 reduced their stakes. Institutions raised their aggregate holdings to about 176.4 million from 75.9 million, an overall increase of approximately 132.4%.

(WhaleWisdom)

Mixed Multi-year Estimates

Analysts expect to see revenue rise over the next four years, increasing growth from 2022 to 2025, spanning approximately 48.0% to 88.3%. These estimates would generate roughly $1.1 billion in revenue by January 2022 and $4.4 billion by January 2025. In addition, year-over-year earnings growth is predicted between 2022 and 2024. However, estimates are not quite as favorable as earnings slowly move toward the positive. Earnings are expected to narrow to a loss of $0.14 by 2024, improving from a loss of $0.58 in 2022.

(WhaleWisdom)

Analysts Focus on both Short and Long Term

Despite first-quarter revenue and a favorable long-term product revenue forecast, analysts are cautious regarding Snowflake’s current valuation. Morgan Stanley’s Keith Weiss acknowledged a significant opportunity in the cloud-based data management market and gave Snowflake a $270 price target and Equal-Weight rating. Brent Thill of Jefferies Group raised Snowflake’s price target to $250 from $235 due to the considerable customer growth seen in the first quarter.

Optimism Beyond 2021

After many highs in 2020, so far, 2021 brought its share of tough months for Snowflake. However, hedge funds are buying, and analysts are optimistic for the long-term future. Year-over-year growth is anticipated to continue, and a strong market for cloud services is encouraging for patient investors.