In this article, we discuss 10 genomics stocks in Cathie Wood’s portfolio that are underperforming.
ARK Investment Management is an innovation-focused hedge fund that is headquartered in St. Petersburg, Florida, with a 13F portfolio worth $33 billion as per the regulatory filings from the fourth quarter of 2021. With a top ten holdings concentration of roughly 40%, Cathie Wood’s portfolio focuses its investments on the information technology, healthcare, finance, consumer discretionary, and communications sectors.
In Q4 2021, Cathie Wood purchased 75 new stocks, bought additional shares of 90 companies, sold out of 13 equities, and reduced holdings in 190 securities. The top buys at her hedge fund were Zoom Video Communications, Inc. (NASDAQ:ZM), Twilio Inc. (NYSE:TWLO), and Intellia Therapeutics, Inc. (NASDAQ:NTLA).
ARK Invest reduced holdings in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), Zillow Group, Inc. (NASDAQ:Z), and Peloton Interactive, Inc. (NASDAQ:PTON).
Fortune reported on February 18 that ARK Investment Management’s flagship fund, the ARK Innovation ETF, declined 30% year-to-date and is more volatile than any other fund on the market. Wood defended her portfolio by stating that despite a significant setback, the stocks in ARK Invest are “way undervalued” and the loss is temporary. Although the ARK Innovation ETF has depressed tech stocks owing to increasing interest rates and inflationary pressures, ARK Investment Management also holds genomics stocks that are underperforming.
The most notable genomics stocks in the fourth quarter portfolio of Cathie Wood’s ARK Investment Management include Intellia Therapeutics, Inc. (NASDAQ:NTLA), CRISPR Therapeutics AG (NASDAQ:CRSP), and Invitae Corporation (NYSE:NVTA).
Our Methodology
We used the Q4 2021 portfolio of Cathie Wood for this analysis, selecting genomics stocks that lost the most value in the last six months. We have mentioned the hedge fund sentiment around each stock, which was gauged from a total of 924 elite funds tracked by Insider Monkey in the fourth quarter of 2021.
Cathie Wood of ARK Investment Management
Genomics Stocks in Cathie Wood’s Portfolio That Are Underperforming
10. Cellectis S.A. (NASDAQ:CLLS)
Number of Hedge Fund Holders: 8
Decline in Share Price in the Last 6 Months: 62.68%
Cellectis S.A. (NASDAQ:CLLS) is a French biopharmaceutical company that operates in the biotechnology, genome engineering, and oncology sectors. The company develops and markets genome-edited technologies for cancer immunotherapy. The Cellectis S.A. (NASDAQ:CLLS) stock has declined 62.68% in the last six months, and it is one of the noteworthy genomics stocks that are underperforming in Cathie Wood’s ARK portfolio.
Cellectis S.A. (NASDAQ:CLLS) has featured on Cathie Wood’s portfolio since Q1 2017, but ARK Investment Management started reducing its position in the company gradually from Q1 2021. In Q4 2021, the fund lowered its stake in Cellectis S.A. (NASDAQ:CLLS) by 23%, holding 2.94 million shares of the company, worth $23.8 million.
Wells Fargo analyst Nick Abbott downgraded Cellectis S.A. (NASDAQ:CLLS) to Equal Weight from Overweight with a $16 price target on January 6. The analyst noted that Cellectis S.A. (NASDAQ:CLLS) did not provide 2022 guidance for its in-vivo gene therapy product and with a delay in clinical programs, he is assuming a delay in collaboration revenues.
Among the hedge funds tracked by Insider Monkey, 8 hedge funds were bullish on Cellectis S.A. (NASDAQ:CLLS) in the fourth quarter of 2021, with stakes amounting to $31 million. 683 Capital Partners is a prominent shareholder of the company, holding 352,638 shares of the company, worth $2.8 million.
In addition to Intellia Therapeutics, Inc. (NASDAQ:NTLA), CRISPR Therapeutics AG (NASDAQ:CRSP), and Invitae Corporation (NYSE:NVTA), Cellectis S.A. (NASDAQ:CLLS) is a genomics stock held by Cathie Wood that underperformed in the last 6 months.
9. Twist Bioscience Corporation (NASDAQ:TWST)
Number of Hedge Fund Holders: 16
Decline in Share Price in the Last 6 Months: 50.77%
Twist Bioscience Corporation (NASDAQ:TWST) is a California-based company that manufactures synthetic DNA products, genes and gene fragments, and next-generation sequencing products. Cathie Wood cut her stake in Twist Bioscience Corporation (NASDAQ:TWST) by 5% in Q4 2021, holding 3.7 million shares worth $291.5 million. The stock accounts for 0.88% of ARK Investment Management’s Q4 portfolio.
On February 4, Twist Bioscience Corporation (NASDAQ:TWST) reported its Q4 results. The company posted a loss per share of $0.96, beating estimates by $0.10. Twist Bioscience Corporation (NASDAQ:TWST)’s revenue of $42.02 million also surpassed estimates by $3.80 million. Despite outperforming earnings and revenue market consensus, the stock has declined 50.77% in the last six months.
Twist Bioscience Corporation (NASDAQ:TWST) announced on February 11 that it has priced an upsized, underwritten public offering of 4.5 million shares of its common stock at a price to the public of $55.00 per share, for expected gross proceeds of roughly $250 million. The offering closed on February 15, and shares were down 2.7% aftermarket.
Baird analyst Catherine Ramsey Schulte on February 7 lowered the price target on Twist Bioscience Corporation (NASDAQ:TWST) to $70 from $113 and kept an Outperform rating on the shares. The analyst said while she continues to like the long-term story, she thinks revenue inflections are likely going to be saved for the second half of 2022 and so she is rationalizing her valuation multiples given recent market trends.
A total of 16 hedge funds were bullish on Twist Bioscience Corporation (NASDAQ:TWST) in Q4 2021, down from 19 funds a quarter earlier. Marshall Wace LLP is a prominent shareholder of Twist Bioscience Corporation (NASDAQ:TWST), with 1.25 million shares worth $97 million.
Here is what Baron Funds has to say about Twist Bioscience Corporation (NASDAQ:TWST) in its Q2 2021 investor letter:
“We initiated a position in Twist Bioscience Corporation, a provider of synthetic DNA. The company’s proprietary semiconductor-based platform has driven its position as the low-cost provider of DNA for a variety of high-growth applications. These include the attractive areas of synthetic biology, liquid biopsy, and antibody discovery. Of note, the antibody business has the potential to become a source of high-margin royalty streams in the future. As further optionality, we believe Twist has a shot at disrupting the entire digital data storage industry with DNA-based storage.”
8. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Number of Hedge Fund Holders: 21
Decline in Share Price in the Last 6 Months: 60.39%
Pacific Biosciences of California, Inc. (NASDAQ:PACB) offers advanced genomic analysis systems that deliver insights for scientists that work on complex genetic challenges. The company has formed a single molecule, real-time (SMRT) sequencing technology which enables genome assembly and genetic variation characterization of humans, animals, plants, and microbes.
In its Q4 earnings report, published on February 15, Pacific Biosciences of California, Inc. (NASDAQ:PACB) announced its Q4 earnings. The company posted a loss per share of $0.30, missing estimates by $0.01. The $36.02 million revenue exceeded market consensus estimates by $19,000.
Canaccord analyst Kyle Mikson lowered the price target on Pacific Biosciences of California, Inc. (NASDAQ:PACB) on February 16 to $40 from $45 and kept a Buy rating on the shares. The analyst remains bullish on the company’s long-term growth potential as it expands its reach in the long read sequencing market and penetrates into the short read-sequencing market. The current weakness in the shares offers an attractive buying opportunity, according to Mikson.
The Pacific Biosciences of California, Inc. (NASDAQ:PACB) stock fell 60.39% in the last six months, and hedge fund sentiment around the stock also decreased between October and December 2021. In Q4 2021, 21 hedge funds held long positions in the company, down from 27 funds in the preceding quarter. SB Management owned a significant position in Pacific Biosciences of California, Inc. (NASDAQ:PACB), with 8.15 million shares worth $166.8 million.
Here is what DEVON Equity Management has to say about Pacific Biosciences of California, Inc. (NASDAQ:PACB) in its Q2 2021 investor letter:
“As a final word on Sequencing – we established a position in Pacific Biosciences (PACB US) during the quarter. PacBio is the leader in Long Read Sequencing (Illumina is dominant in Short Read). The Long Read market is far less developed than short read, but our continued research into the genomic sequencing field increased our confidence in the commercial viability for Long Read Sequencing in the coming years. We will discuss the investment case for PacBio in more detail in a future letter.”
7. Editas Medicine, Inc. (NASDAQ:EDIT)
Number of Hedge Fund Holders: 21
Decline in Share Price in the Last 6 Months: 76.74%
Headquartered in Cambridge, Massachusetts, Editas Medicine, Inc. (NASDAQ:EDIT) is a biotechnology company that specializes in CRISPR–Cas9 gene editing technology and genome engineering to develop therapies and carry out clinical stage trials to create gene edited cell medicines.
On February 11, Evercore ISI analyst Liisa Bayko downgraded Editas Medicine, Inc. (NASDAQ:EDIT) to In Line from Outperform with a $15 price target. Following a “bumpy few months” for Editas Medicine, Inc. (NASDAQ:EDIT), her outlook on Editas Medicine, Inc. (NASDAQ:EDIT)’s ocular program has “become more pessimistic,” so she is moving to the sidelines and reducing her view on the odds of success.
Despite the stock falling 76.74% in the last six months, Cathie Wood loaded up on Editas Medicine, Inc. (NASDAQ:EDIT) in the fourth quarter of 2021, increasing her stake in the company by 17%, holding 26.3 million shares worth roughly $540 million. The stock has consistently featured in Wood’s portfolio since Q3 2019.
Among the hedge funds tracked by Insider Monkey in Q4 2021, 21 funds reported owning stakes in Editas Medicine, Inc. (NASDAQ:EDIT), down from 22 funds in the prior quarter. Billionaire Israel Englander’s Millennium Management owned a prominent position in the company, with 988,290 shares worth $26.2 million.
6. Beam Therapeutics Inc. (NASDAQ:BEAM)
Number of Hedge Fund Holders: 22
Decline in Share Price in the Last 6 Months: 37.06%
Beam Therapeutics Inc. (NASDAQ:BEAM) is a Massachusetts-based biotechnology company that specializes in the field of gene therapies and genome editing, relying on CRISPR and prime editing. The stock price declined by 37.06% in the previous 6 months.
Beam Therapeutics Inc. (NASDAQ:BEAM) is a relatively new addition to Cathie Wood’s ARK Invest portfolio, with the hedge fund acquiring a position in the company in Q4 2020. As of the fourth quarter of 2021, Cathie Wood owned 7.9 million Beam Therapeutics Inc. (NASDAQ:BEAM) shares, worth $636.1 million, representing 1.92% of the total 13F securities.
On January 10, Wedbush analyst David Nierengarten raised the price target on Beam Therapeutics Inc. (NASDAQ:BEAM) to $159 from $148 and kept an Outperform rating on the shares after the company and Pfizer Inc. (NYSE:PFE) announced a deal to develop in vivo base editing therapies targeting three undisclosed targets for rare genetic diseases of the liver, muscle, and central nervous system.
According to the fourth quarter database of Insider Monkey, 22 hedge funds were bullish on Beam Therapeutics Inc. (NASDAQ:BEAM), with collective stakes amounting to $1.17 billion, as compared to 20 funds holding stakes in Beam Therapeutics Inc. (NASDAQ:BEAM) worth $1.24 billion in the prior quarter. Thomas Steyer’s Farallon Capital held a significant stake in Beam Therapeutics Inc. (NASDAQ:BEAM), with 2.26 million shares worth $180.50 million.
Beam Therapeutics Inc. (NASDAQ:BEAM) shares lost value in the last six months, just like Intellia Therapeutics, Inc. (NASDAQ:NTLA), CRISPR Therapeutics AG (NASDAQ:CRSP), and Invitae Corporation (NYSE:NVTA).
Here is what Baron Health Care Fund has to say about Beam Therapeutics Inc. (NASDAQ:BEAM) in their Q1 2021 investor letter:
“Beam Therapeutics Inc. is a biotechnology company pioneering a novel technology called base editing, which allows for individual base pairs (the letters of DNA) to be modified. Shares fell along with other biotechnology stocks driven by a sudden rise in treasury yields. Early stage biotechnology stocks are particularly sensitive to interest rates because their cash flows are further in the future. We believe we are entering into a phase of significant advancement for the gene editing field that will eventually lead to curative therapies, and we think Beam has a unique platform technology.”
5. 10x Genomics, Inc. (NASDAQ:TXG)
Number of Hedge Fund Holders: 22
Decline in Share Price in the Last 6 Months: 50.17%
10x Genomics, Inc. (NASDAQ:TXG) is a California-based biotechnology company that designs and develops gene sequencing technology utilized in scientific research. Cathie Wood initially purchased shares of 10x Genomics, Inc. (NASDAQ:TXG) in Q2 2020, and by Q4 2021, she reduced her stake in 10x Genomics, Inc. (NASDAQ:TXG) by 15%. Wood held 2.6 million shares worth $396.3 million, representing 1.19% of the total 13F securities.
10x Genomics, Inc. (NASDAQ:TXG) reported its Q4 results on February 16, posting a loss per share of $0.16, missing estimates by $0.13. The $143.53 million revenue also missed market consensus estimates by approximately $5 million. 10x Genomics, Inc. (NASDAQ:TXG) traded 18% lower in post-market trading after the company set its 2022 revenue guidance below Wall Street forecasts.
On February 17, Cowen analyst Dan Brennan lowered the price target on 10x Genomics, Inc. (NASDAQ:TXG) to $145 from $205 and kept an Outperform rating on the shares. The analyst said the Q4 miss was not a surprise but the guidance was worse than expected. He said while the number of causal factors creates risks, the issues are reasonable and there is a chance of significant improvement in the second half of 2022 and into 2023.
A total of 22 hedge funds held long positions in 10x Genomics, Inc. (NASDAQ:TXG) in the fourth quarter of 2021, down from 28 funds in the preceding quarter. 12 West Capital Management is a prominent shareholder of the company, with more than 2 million shares worth $298.5 million.
4. Invitae Corporation (NYSE:NVTA)
Number of Hedge Fund Holders: 24
Decline in Share Price in the Last 6 Months: 65.96%
Based in San Francisco, California, Invitae Corporation (NYSE:NVTA) is a biotechnology company that is involved in medical-grade genetic testing. Shares of Invitae Corporation (NYSE:NVTA) have been consistently held by ARK Investment Management since Q1 2018, and in the fourth quarter of 2021, the hedge fund elevated its stake in Invitae Corporation (NYSE:NVTA) by 4%. The fund owned 26.70 million shares of the company, worth $407.7 million, accounting for 1.24% of the total 13F securities.
After the Q3 earnings and revenue miss, Wells Fargo analyst Dan Leonard lowered the price target on Invitae Corporation (NYSE:NVTA) to $25 from $35.
According to the Q4 database of Insider Monkey, Casdin Capital held one of the leading stakes in Invitae Corporation (NYSE:NVTA), with 12.20 million shares worth $186.35 million. Overall, 24 hedge funds were bullish on the stock in the fourth quarter of 2021.
3. Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
Number of Hedge Fund Holders: 30
Decline in Share Price in the Last 6 Months: 53.27%
Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) is a biotech company involved in genetic engineering to produce bacteria with industrial applications. Cathie Wood’s ARK Investment Management purchased a stake in Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) in Q3 2021, and at the end of December 2021, the hedge fund elevated its position in the company by 86%, holding 43.1 million shares worth $358.8 million.
On February 1, BofA analyst Derik de Bruin started the stock with a Neutral rating and a $6 price target. The analyst says the synthetic biology market holds “much long-term promise”, and overall he has a positive view on Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)’s engineering biology platform, but that it is tough to judge the adoption and commercial traction for end products derived from the company’s technology.
According to the fourth quarter database of Insider Monkey, 30 hedge funds reported owning stakes in Ginkgo Bioworks Holdings, Inc. (NYSE:DNA), collectively amounting to $4.2 billion, as compared to 32 funds holding stakes in Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) worth $5.6 billion a quarter earlier.
2. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
Number of Hedge Fund Holders: 31
Decline in Share Price in the Last 6 Months: 45.26%
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is a Massachusetts-based biotech firm that creates medicines using the CRISPR gene editing system. Despite the stock declining 45.26% in the last six months, Cathie Wood elevated her stake in Intellia Therapeutics, Inc. (NASDAQ:NTLA) by 18% in Q4 2021. ARK Investment Management held 7.9 million shares of Intellia Therapeutics, Inc. (NASDAQ:NTLA), worth $936 million, representing 2.82% of the fund’s 13F securities.
On February 3, Intellia Therapeutics, Inc. (NASDAQ:NTLA) acquired Rewrite Therapeutics, a biotechnology firm focused on advancing novel DNA writing technologies for an upfront payment of $45 million. Rewrite’s DNA writing technology may enable a range of precise editing strategies at Intellia Therapeutics, Inc. (NASDAQ:NTLA).
William Blair analyst Raju Prasad on February 18 initiated coverage of Intellia Therapeutics, Inc. (NASDAQ:NTLA) with an Outperform rating and a $144 fair value for shares. In the second half of 2022, Intellia Therapeutics, Inc. (NASDAQ:NTLA)’s clinical updates “could open a second multibillion-dollar market opportunity” for the company, says the analyst.
In Q4 2021, 31 hedge funds were bullish on Intellia Therapeutics, Inc. (NASDAQ:NTLA), down from 37 funds a quarter prior. Andreas Halvorsen’s Viking Global is a leading stakeholder of Intellia Therapeutics, Inc. (NASDAQ:NTLA), with 1.5 million shares worth $186.7 million.
Here is what Carillon Tower Advisers has to say about Intellia Therapeutics, Inc. (NASDAQ:NTLA) in its Q2 2021 investor letter:
“Intellia Therapeutics is a clinical-stage genome editing company focused on the development of proprietary, potentially curative therapeutics. The company’s stock soared after announcing positive interim data from an ongoing phase 1 clinical study of its in vivo gene editing candidate, which is being developed as a single-dose treatment for hereditary transthyretin (ATTR) amyloidosis. This specific form of therapy would be the first of its kind resulting in the precision editing of a gene in a target tissue in the human body.”
1. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Hedge Fund Holders: 34
Decline in Share Price in the Last 6 Months: 53.38%
CRISPR Therapeutics AG (NASDAQ:CRSP) is a Switzerland-based biotechnology company that uses CRISPR/Cas9 technology to create transformative therapies and gene-based medicines. Cathie Wood elevated her CRISPR Therapeutics AG (NASDAQ:CRSP) stake by 20% in Q4 2021, holding more than 9 million shares of the company, worth $688.6 million, representing 2.08% of the total 13F securities at ARK Investment Management. The stock declined 53.38% in the last six months.
On February 15, CRISPR Therapeutics AG (NASDAQ:CRSP) reported its fourth quarter results. The company posted a loss per share of $1.84, missing estimates by $0.06. Revenue over the period came in at $12.90 million, outperforming market consensus by $10.64 million.
Stifel analyst Benjamin Burnett on February 16 lowered the price target on CRISPR Therapeutics AG (NASDAQ:CRSP) to $64 from $100 and kept a Hold rating on the shares following the company’s Q4 report. While he contends the valuation is “becoming interesting” and shares look “enticing” amid the pullback, and admits he “strongly contemplated a valuation-based upgrade”, his cautious view regarding a catalyst for the shares kept him on the sidelines, the analyst told investors.
Among the hedge funds tracked by Insider Monkey, EcoR1 Capital held a significant stake in CRISPR Therapeutics AG (NASDAQ:CRSP) in Q4 2021, with over 1 million shares worth $81.6 million. Overall, 34 hedge funds were bullish on the stock in the fourth quarter of 2021.
You can also take a look at Top 10 Tech and Automation Stocks in Cathie Wood’s Portfolio and 10 Biotech Stocks To Buy According To Chinese Billionaire Lei Zhang.
Follow Insider Monkey on Twitter
Suggested articles:
- Warren Buffett’s Performance in 2021: 10 Best Stock Picks
- 10 Best Dividend Stocks to Buy According to Cliff Asness’ AQR Capital Management
- 9 Latest Stock Picks of Chinese Billionaire Chen Tianqiao’s Shanda Asset Management
Disclosure: None. 10 Genomics Stocks in Cathie Wood’s Portfolio That Are Underperforming is originally published on Insider Monkey.
