Q: Any reason why SHOP had declined much more than the overall market this week? I don't see any news. At what point might one add to position or is now not the time?
5i Research Answer:
SHOP is a high Beta, expensive stock in a market that has suddenly gone 'risk off'. With concern on rates and inflation, high growth companies tend to get discounted much more, as 'future growth' is worth less when rates rise. Recent results were good and guidance was inline. The stock is also up 60% in the past year and thus easy for investors to sell and take some profits. We see no recent relevant material negaitve news specific to the company. We would be fine buying this, assuming a high growth investor focus and a good time frame to hold while volatility sorts itself out.