Amazon is a natural fit to acquire Shopify, says Canadian portfolio manager

Shopify (Shopify Stock Quote, Chart, News: TSX:SHOP) is not a cheap stock, but further upside for investors could potentially come in the form of a takeout by none other than Amazon, says one Canadian portfolio manager.

On BNN’s Market Call Wednesday, Bruce Murray, CEO and chief investment officer of The Murray Wealth Group, fielded a call from an investor who asked if she should wait for a pullback on Shopify or jump into the stock, which is making new highs on a near daily basis.

Murray said Shopify is an expensive stock, but is also one that is suitable for investors with a longer term horizon.

“If you buy it tomorrow and hold it for five to ten years you will do just fine. If you buy it tomorrow and hold it for a year we have no idea what could happen,” the portfolio manager said. “Shopify is a very high priced stock. The pullback we talked about was in the summer and now it’s taking off again as it reported stronger earnings. As you are probably aware, Shopify is now working with Amazon on all the lower end purchases. Amazon outsourced that to them, and so the future is strong, but the price you pay is high. The wait to make money could be a long time.

But Murray admits that the timeline to make money from Shopify stock could be compressed in the form a takeout from its noteworthy partner.

“Amazon is a natural to take out Shopify,” the portfolio manager says.