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Square - Your new Stock in the US managed portfolio


It is useful for an investor to look at the underlying holdings of a bundle to get an appreciation of the investment style of that bundle manager.

Emperor employs an algorithmic approach to its bundle construction and this article is focused on one of our key holdings in our USD bundle, Square (SQ). We have an approximately 6% holding in SQ.

We have selected to focus on our USD bundle as South African investors generally have to much exposure domestically relative to worldwide companies even though SA only comprises about 1% of world GDP and 0.70% of the world market capitalisation (as measured by MSCI).

Square began as a service for micro-entrepreneurs and growing small businesses, however it is now courting much bigger businesses. Square was founded by its current CEO in 2009, Jack Dorsey, who was also the co-founder Twitter (he is currently also the CEO of Twitter).

Square saw an opportunity to introduce simplicity into an industry dominated by clunky and expensive point-of-sale solutions. The company debuted with a small white card reader designed to plug into a smartphone. Today Square has morphed into a major force in payments. In addition to its signature card reader, Square now offers an iPad point-of-sale system and more advanced terminals that accept everything from chip cards to Apple Pay. The company also operates a range of merchant services including a business debit card, accounting features, payroll software, and loans via Square Capital. It also has Caviar, a food delivery network and consumer-facing mobile wallet, Cash App (which has its own debit card).

Square is an example of a company exhibiting a strong factor tilt towards momentum, it can be quite volatile but has handily outperformed the market since its listing (November 2015). 

Have a look at the bundle here 

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