Sea Limited ADR (SE) saw impressive growth over the past year, substantially outperforming the S&P 500 and rising on the WhaleWisdom Heatmap to a ranking of nine. Hedge funds and institutions are actively buying the equity. Sea’s stock rose by approximately 582.82% since the start of 2020, a whopping gain compared to the S&P’s increase of about 21.2%.

Sea is a consumer internet company that offers e-commerce and online gaming and personal computer content, mobile digital content, and digital financial services. The technology company is structured with three business segments to deliver these services: Garena, Shopee, and SeaMoney. While many businesses have faced hurdles during the coronavirus pandemic, Sea has seen a significant boost in sales as customers following stay-at-home advisories and quarantines seek greater online retail therapy and digital entertainment, with no clear end in sight to these behavioral shifts.

Hedge Funds Are Buying

Sea has earned the favor of hedge fund managers and institutions. Looking at activity by the top hedge funds in the third quarter, the aggregate 13F shares held increased to about 72.5 million from 71.7 million, an increase of approximately 1.2%. Of the hedge funds, 33 created new positions, 48 added to an existing holding, 11 exited, and 67 reduced their stakes. Institutions were also buying, and aggregate holdings increased by about 0.9% to approximately 241.0 million from 238.8 million. Sea’s WhaleWisdom HeatMap ranking improved to 9 in the third quarter, up from 14 previously.

(WhaleWisdom)

Encouraging Multi-year Estimates

Analysts expect to see earnings rise over the next several years, with increases in growth from 2020 through 2026 spanning from approximately 13.4% year over year to 56.4%. Estimated increases for earnings between 2020 and 2023 could bring year over year earnings to $2.77 per share in 2023, up from a loss of $2.47 for 2020.

(WhaleWisdom)

Analysts See Strong Growth

Investment and financial service companies recognize Sea’s growth potential and street analysts are bullish. Credit Suisse Group AG recently bumped Sea’s price target to a Street high of $285, up from $225. Credit Suisse cited recent gaming growth and predictions for growth in Sea’s e-commerce unit, Shopee.

Positive Outlook

Hedge funds and institutions are buying, and analysts share optimism following a year of robust revenue growth. There is an opportunity for Sea to continue to reap the benefits of the pandemic’s influence on online shopping and entertainment habits. Recent growth and multi-year estimates are encouraging for investors in the long-term.

PayPal Holdings, Inc. (PYPL) saw strong momentum over the past year, significantly outperforming the S&P 500 and rising by approximately 150.0% compared to the S&P’s gain of about 19.8%.

PayPal is an American company with a technology platform that enables digital and mobile payments on behalf of merchants and consumers and supports online money transfers between friends and family. PayPal rebounded from a dip in performance around March of 2020 when the coronavirus pandemic gained traction in the United States. However, the poor performance quickly reversed as investors soon realized the benefits the pandemic would have as consumer shopping habits shifted online. Many businesses were forced temporarily to close with consumers adhering to social distancing guidelines. There was a shift to online technology for money management, including online shopping through digital payments. Despite the company soaring to new revenue heights, PayPal did slide on the WhaleWisdom HeatMap to a ranking of 34 from 16.

Hedge Funds Are Selling

Despite PayPal’s gains, hedge funds and institutions were selling in the third quarter. Hedge funds decreased their aggregate 13F shares held to approximately 226.6 million from about 237.5 million. Of hedge funds, 49 created new positions, 153 added to an existing holding, 25 exited, and 221 reduced their stakes. Institutions decreased their aggregate holdings to about 967.7 million from 980.0 million, a mild decrease of 1.3%.

(WhaleWisdom)

Revenue Is on the Rise

Analysts have positive views on PayPal with year over year growth ranging from 15.8% to 20.8% over the next four years. Revenue is forecast to reach approximately $43.2 billion in 2024, up from $25.6 billion in 2021. Predicted increases may bring earnings to $11.37 per share by 2025, up from $4.55 for the fiscal period ending in December 2021.

Enthusiastic Views

Analysts appear enthusiastic about the stock. Mizuho Securities USA’s analyst, Dan Dolev, believes that the company is becoming the “ultimate financial ‘super app,’ that transcends across payments, commerce, and financial services.” PayPal recently announced the upcoming launch of a new cryptocurrency business unit, and this also has analysts’ attention. Keefe Bruyette & Woods Inc’s (KBW) analyst, Sanjay Sakhrani, shared similar sentiments and noted that the cross-generational behavior shift towards eCommerce creates the opportunity for sustainably higher earnings power.

(WhaleWisdom)

Positive Overall Outlook

PayPal’s recent growth brings an encouraging outlook, as supported by future earnings estimates that show continued growth through 2025. Amidst the pandemic, this digital payment leader offers investors an opportunity as it continues to see increased demand for its services.

Apple Inc. (AAPL) saw strong performance over the past 12 months, outperforming the S&P 500 and rising by approximately 86.7% compared to the S&P’s gain of about 17.2%. Despite strong growth, hedge funds and institutions actively sold the stock in the third quarter, which explains the company’s recent slide in rating on the WhaleWisdom Heat Map to 40 from 4.

Apple is a multinational technology company that designs, manufactures, develops, and sells mobile communication and media devices, personal computers, computer software, portable music players, networking applications, and various online services. The company has moved beyond the initial negative impact of the coronavirus pandemic that many companies faced in the spring of 2020. Apple has continued to thrive as demand for its products and services strengthened.

Hedge Funds’ Enthusiasm Wanes

Hedge Funds were selling Apple’s stock in the third quarter of 2020. The aggregate 13F shares held by hedge funds decreased to approximately 1.3 billion from 1.4 billion, a decrease of about 9.2%. Overall, for hedge funds, 42 created new positions, 136 added to an existing holding, 30 closed out their position, and 331 reduced their stakes. Institutions decreased their aggregate holdings by about 5.0%, to 9.7 billion from 10.2 billion.

(WhaleWisdom)

Favorable Forecasts

Apple has achieved record-level revenue and held the top sales position in the fourth quarter due to the iPhone 12’s successful launch. In the summer of 2020, analysts such as Wedbush Capital’s Daniel Ives noted the opportunity ahead for Apple as many consumers were coming eligible for upgrades to mobile phones; these upgrades are now coming to fruition. Katy Huberty of Morgan Stanley maintained an outperform rating on the stock and raised the price target to $164 from $152, noting customer loyalty as one major factor. Piper Sandler Co.’s analyst, Harsh Kumar, highlighted Apple’s impressive sales growth and increased Apple’s price target to $160 from $135.

Predictions for Continued Growth

Analysts have optimistic revenue estimates for the company over the next four years, expecting that earnings will rise year-over-year from 2020 through 2023. Revenue increases range from approximately 21.1% year over year in 2021 to 13.2% in 2024. These significant year-over-year estimates would bring earnings to $5.43 per share in 2024, up from $4.35 for 2021.

Positive Outlook

Hedge funds may have been selling, but analysts are very optimistic about the stock. Apple’s iPad sales continue to catch pandemic tailwinds, and there is strong demand for the iPhone 12. Recent growth and multi-year estimates are encouraging for investors in the long-term.

Alibaba Group Holding Ltd. ADR (BABA) has faced a rocky journey over the past year, forging its way upward following a dip near the start of the coronavirus pandemic in spring 2020, then stumbling again between November 2020 and January 2021. Despite challenges, Alibaba outperformed the S&P 500, rising by approximately 22% as of January 22, 2021, compared to the S&P’s gain of about 19% over the past year. Alibaba recently moved up in ranking on the WhaleWhisdom Heatmap, achieving an impressive ranking of 5, up from 22.

Alibaba is a Chinese multinational holding company specializing in technology, e-commerce, and retail. The company also provides Internet infrastructure and content services through its subsidiaries. While Alibaba initially saw growth slow due to pandemic related shutdowns worldwide, sales ultimately rebounded as shoppers’ habits shifted more towards online retail. Alibaba’s dominance in China’s online shopping market has only strengthened in the past year. Although the pandemic has helped speed up online retail’s growth rate, the e-commerce and tech giant ultimately faced new opposition as Chinese regulators launched an antitrust probe. The United States also examined the company’s possible funding of China’s military, impacting Alibaba and several of its rivals.

Hedge Funds and Institutions Are Selling

While Alibaba has garnered attention due to its growth and heat map ranking of 5, hedge funds are still selling. Looking at third-quarter activity by the top hedge funds, the aggregate 13F shares held decreased to about 249.5 million from 276.3 million, a decrease of approximately 9.7%. Of the hedge funds, 49 created new positions, 151 added to an existing one, 34 closed out their stakes, and 160 reduced their holdings. Overall, institutions decreased their aggregate holdings by about 6.8%, to approximately 1.1 billion from 1.2 billion.

(WhaleWisdom)

Government and Media Announcements Catch Investors’ Attention

Investors may be cautious following recent government announcements and actions in China and the United States. In December 2020, Chinese regulators announced an investigation into the alleged monopolistic practices of Alibaba and its major competitors, potentially leading to a forced breakup of company components. Alibaba also faced a looming decision by the United States’ Department of Defense, which examined about a dozen companies for possible inclusion on the list of firms believed to fund China’s military. Fortunately, the United States did not add Alibaba to the list. Their stock jumped after the Wall Street Journal reported in January that U.S. investors may still invest in the company. Alibaba also saw a negative impact on its stock when its founder, Jack Ma, had not been seen in public for several months, coinciding with the start of China’s antitrust inquiries. The stock, fortunately, saw a rebound when Ma recently resurfaced.

(WhaleWisdom)

Uncertain Outlook Despite Stock Gains

Over the past year, Alibaba’s overall growth is certainly encouraging for investors, especially seeing their rebound after the pandemic’s initial impact. However, the company has additional hurdles to conquer as it undergoes an antitrust probe by the Chinese government. If the company is not required to restructure, then there is great potential for future growth, especially given its value as a tech company and the world’s propensity for online shopping. The company is well-positioned to respond to increased demand for its products and services. Still, investors need to be loyal and flexible to ride out the regulatory storm.

Marriott International, Inc. (MAR) faced challenges in 2020 but has slowly regained momentum in recent months after declines last spring. Still, the stock has underperformed the S&P 500, falling by approximately 15% compared to the S&P’s overall gain of almost 18% since January 2020. Despite the hospitality company’s challenging year amidst the coronavirus pandemic, it was added to the WhaleWisdom 100 Index on November 16, 2020.

Marriott operates as a multinational hospitality company that manages and franchises a broad portfolio of hotels and other lodging facilities, in addition to rental properties. Pandemic induced fear of travel and government restrictions dramatically curbed leisure demand in 2020, adversely affecting Marriott’s bookings.
While the pandemic has had a severe impact on Marriott’s business, the company took measures to adapt and reduce costs while waiting out the storm. Marriott also elevated its commitment to cleanliness to meet the coronavirus challenges and fostered goodwill by donating hotel stays to medical professionals in support of their efforts to battle the virus throughout the United States. The recent release and continued research of coronavirus vaccines worldwide offer additional hope for a rainbow to come for this industry. Marriott anticipates a gradual rise in bookings, and analysts predict a multi-year recovery towards pre-virus demand.

Optimistic Long-term Estimates

Beginning in 2021, analysts are more optimistic with estimates. Forecasts call for revenue to fall in 2020 by about 48.7%, and then increase in 2021 by approximately 35.9% to about $14.7 billion. Overall, Marriott is expected to see revenue growth ranging from 35.9% to 9.5% from 2021 through 2024. Between 2020 and 2024, revenue could very likely grow from $10.8 billion to about $24.6 billion.

Earnings per share are initially expected to decline to a loss of $0.21 in 2020 and rebound in 2021 to about $2.35. Profits are then expected to nearly double in 2022, bringing earnings per share to an estimated $4.56. Moderate growth is expected to continue in 2023 and 2024, and by December 2024, earnings per share are predicted at about $7.46.

Analysts Predict Recovery

Argus Research Co.’s analyst, John Staszak, moved Marriott’s stock to a Buy rating from a Hold and believes that the industry is in the early stages of another multi-year upturn. Staszak reduced loss estimates for 2020 to $0.10 from $0.18 and raised earnings per share estimates for 2021 to $3.15, noting that the company has an adaptive global operating model that allows it to expand room capacity anywhere in the world.

Citigroup, Inc. turned bullish on the stock, influenced by the start of coronavirus vaccine distribution around the world. Citi upgraded Marriott to a Buy rating with an overweight position and a $150 price target. Vaccine distribution restores confidence for many.

Favorable Long-term Outlook

Being realistic of the disruptive effect of the pandemic on the hospitality industry and tourism, Marriott’s financial recovery will not happen overnight. However, recent news concerning vaccines for the coronavirus has resonated positively. Once travelers feel safe again, both personal and business trip bookings are likely to rebound. Marriott’s business strategies improved revenue estimates, and continued growth may encourage investors.