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.
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.
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.
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.