Even while the “Magnificent Seven” stocks carry the market higher, not every technology stock is loved on Wall Street. Indeed, PayPal (NASDAQ:PYPL) stock can’t seem to catch a bid in 2023. This presents a terrific opportunity for enterprising investors.
PayPal is a premier fintech business that’s not afraid to try new ventures in leading-edge tech fields, such as the blockchain. However, it seems that some retail investors aren’t on board with PayPal’s innovative spirit this year.
But then, winning investors, not amateurs, follow the smart money. If big-money financiers see something special about PayPal now, maybe it’s time to follow the whales and embark on a dip-buying expedition with PYPL stock.
Institutional Investors Love PYPL Stock
I’ve been pounding the table about PayPal’s low valuation for a while. Currently, the company has a trailing 12-month price-to-earnings (P/E) ratio of 15.62x. That’s quite reasonable for a large-cap technology firm in 2023.
Unlike the “Magnificent Seven” firms, PayPal isn’t a darling of the financial markets right now. However, in early October it was reported that institutions own a whopping 72% of PYPL stock shares.
I dug deeper and discovered that current and/or recent institutional PayPal shareholders include financial whales like Vanguard and BlackRock (NYSE:BLK). This, by itself, isn’t a buy signal, but it’s certainly a good sign.
Thus, the smart money isn’t fazed by PayPal’s CEO transition or PYPL’s decline. I suspect that they’re buying what the amateurs are panic-selling at discount prices. After all, that’s what smart-money investors do.
PayPal’s Stablecoin Venture and Team-up With Apple
Additionally, I imagine that big-money investors want exposure to the fintech trends of the future. PayPal is definitely a future-facing business that’s willing to be first in fields that are untested today but have exciting growth potential.
For instance, you may have heard about PayPal’s new stablecoin, known as PayPal USD or PYUSD. This is a cryptocurrency token that’s “stable” because it’s backed by the U.S. dollar as well as government bonds.
Amateur traders might not be forward-looking enough to see the future growth of this stablecoin. Yet, PayPal USD is reportedly already available on popular cryptocurrency exchanges like Coinbase Global’s (NASDAQ:COIN), Coinbase, Kraken, Bitstamp and Crypto.com.
Furthermore, PayPal now has a value-added tie-in with Apple (NASDAQ:AAPL). Specifically, PayPal’s customers can “add their eligible PayPal and Venmo credit or debit cards to Apple Wallet“. It’s a win-win scenario as these customers can conveniently make payments with via an iPhone or Apple Watch.
PYPL Stock Is Cheap and Poised for a Comeback
Some retail stock traders might not be willing to wait for PayPal’s stablecoin to gain traction. Or, maybe they can’t envision legions of Apple iPhone and Watch users using PayPal/Venmo credit and debit cards.
Their lack of patience and vision can be your opportunity. Clearly, institutional investors are happy to hold PYPL stock while the amateurs are selling it. Therefore, I invite you to join the smart-money set and avoid the panicky crowds, and hold a few PayPal shares of your own.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
