In this article, we discuss the 10 micro-cap stocks to buy according to Cathie Wood. If you want to skip our detailed analysis of Wood’s investment philosophy, hedge fund returns, and history, go directly to 5 Micro-Cap Stocks To Buy According To Cathie Wood.
Cathie Wood’s Ark Investment Management is suffering a steeper drop in assets than almost any other US exchange-traded fund issuer this year. Although her flagship ARK Innovation ETF (ARKK) retreated 23% last year, even as the S&P 500 gained 27%, this year’s bear market has been much worse, and Cathie Wood’s concentrated portfolio of tech stocks is taking the full brunt of it. Earlier on June 9, the billionaire investor went on Bloomberg to state her position on the recent collapse. According to Cathie Wood, the economic volatility cannot solely be blamed on inflation and consequently rising rates. She believes that supply chain disruption, the ongoing COVID-19 crisis in China, and the Russian invasion of Ukraine are equally to blame.
Earlier this month, Wood said massive inventories held by US companies suggest that inflation will soften. Major companies in the US, including Target and Walmart, amassed stockpiles last year amid soaring consumer demand. Despite ARK’s recent performance, Cathie Wood states that her clients have confidence in her investment philosophy, as evidenced by ARKK gaining more than $180 million in inflows earlier in June, because they know that Wood’s philosophy is built for the long-term and retail investors are ready to invest in their futures, the ARK CEO reiterated.
According to Cathie Wood:
“I think the inflows are happening because our clients have been diversifying away from broad-based bench marks like the Nasdaq 100. We are dedicated completely to disruptive innovation. Innovation solves problems.”
Cathie Wood believes her portfolio could rebound by 2023, and as such, she continues to load up on some prominent stocks for her portfolio, including Block, Inc. (NYSE:SQ), Robinhood Markets, Inc. (NASDAQ:HOOD), and Shopify Inc. (NYSE:SHOP).
Cathie Wood of ARK Investment Management
Our Methodology
The following stocks have been picked according to the Q1 2022 portfolio of Cathie Wood’s ARK Investment Management. These are the top 10 micro-cap holdings of the fund as of the end of the first quarter. Micro-cap stocks are categorized as companies with a market capitalization ranging from $50 million to $300 million.
10 Micro-Cap Stocks To Buy According To Cathie Wood
10. Allot Ltd. (NASDAQ:ALLT)
Percentage of ARK Investment Management’s 13F Portfolio: 0%
ARK Investment Management’s Stake Value: $2.04 million
Number of Hedge Fund Holders: 18
Market Capitalization: $182.64 million
Allot Ltd. (NASDAQ:ALLT), formerly known as Allot Communications, is an Israeli high-tech company that develops telecommunications software. Regulatory filings reveal that ARK owned 252,341 shares of Allot Ltd. (NASDAQ:ALLT) at the end of the first quarter of 2022, worth $2 million. The fund increased its stake in the firm by 23% in the first three months of 2022 compared to the previous quarter.
On June 21, Allot Ltd. (NASDAQ:ALLT) announced that communications service provider Proximus, under its Tango brand name, has launched cybersecurity services for its mobile residential customers in Luxembourg based on Allot Ltd. (NASDAQ:ALLT)’s NetworkSecure.
At the end of the first quarter of 2022, 18 hedge funds in the database of Insider Monkey held stakes worth $108.87 million in Allot Ltd. (NASDAQ:ALLT), up from 14 in the preceding quarter. Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Allot Ltd. (NASDAQ:ALLT), with 1.2 million shares worth more than $10 million.
Just like Block, Inc. (NYSE:SQ), Robinhood Markets, Inc. (NASDAQ:HOOD), and Shopify Inc. (NYSE:SHOP), Cathie Wood remains bullish on Allot Ltd. (NASDAQ:ALLT)
9. Silicom Ltd. (NASDAQ:SILC)
Percentage of ARK Investment Management’s 13F Portfolio: 0%
ARK Investment Management’s Stake Value: $2.29 million
Number of Hedge Fund Holders: 10
Market Capitalization: $220.87 million
Silicom Ltd. (NASDAQ:SILC) is a publicly traded company, headquartered in Israel, that specializes in the design, manufacture and marketing of connectivity solutions for a range of servers and server-based systems. Latest data shows that ARK owned 58,175 shares of Silicom Ltd. (NASDAQ:SILC) at the end of the first quarter of 2022, worth $2.29 million.
Earlier this May, Silicom Ltd. (NASDAQ:SILC) announced that an existing customer, one of the SD-WAN market’s largest vendors, has placed purchase orders, for Silicom’s SD-WAN Smart Platforms in the aggregate amount of $15 million with delivery requested during 2022, and that shipments against these POs have already begun. In parallel, the client’s forecasts call for equipment valued at more than $25 million to be delivered each year for the next several years.
Based on Insider Monkey’s Q1 database, 10 hedge funds were bullish on Silicom Ltd. (NASDAQ:SILC), compared to 11 funds in the preceding quarter. The total stakes held in Q1 2022 amounted to approximately $21.64 million. Thomas Ellis and Todd Hammer’s North Run Capital is the largest shareholder of the company, with a position worth roughly $6.52 million.
8. Ceragon Networks Ltd. (NASDAQ:CRNT)
Percentage of ARK Investment Management’s 13F Portfolio: 0%
ARK Investment Management’s Stake Value: $2.37 million
Number of Hedge Fund Holders: 7
Market Capitalization: $219.24 million
Ceragon Networks Ltd. (NASDAQ:CRNT) is a networking equipment vendor, focused on wireless point-to-point connectivity, mostly used for wireless backhaul by mobile operators and wireless service providers as well as private businesses. Cathie Wood holds more than 1.1 million shares in Ceragon Networks Ltd. (NASDAQ:CRNT) as of Q1 2022, worth $2.37 million.
This May, Ceragon Networks Ltd. (NASDAQ:CRNT) announced an agreement with DISH Network Corporation (NASDAQ:DISH) to provide ultra-high capacity IP-50C microwave and IP-50E millimeter wave transport solutions. According to Doron Arazi, Ceragon Networks CEO:
As the industry disruptor, DISH is strategically adopting cutting-edge network architectures and technologies, and Ceragon’s groundbreaking wireless transport offering is fully aligned with DISH’s requirements.
The leading Q1 stakeholder of Ceragon Networks Ltd. (NASDAQ:CRNT) is Royce & Associates, with a $2.5 million stake in the company. Overall, 7 hedge funds in the database of Insider Monkey reported owning stakes in Ceragon Networks Ltd. (NASDAQ:CRNT), worth $7.04 million, down from 9 funds in the preceding quarter.
7. Enlivex Therapeutics Ltd. (NASDAQ:ENLV)
Percentage of ARK Investment Management’s 13F Portfolio: 0.01%
ARK Investment Management’s Stake Value: $2.42 million
Number of Hedge Fund Holders: 2
Market Capitalization: $86.54 million
Enlivex Therapeutics Ltd. (NASDAQ:ENLV) is an Israeli-based clinical-stage cell immunotherapy company which develops Allocetra, a universal off-the-shelf cell therapy designed to reprogram macrophages into their homeostatic state. Cathie Wood holds a $2.42 million stake in Enlivex Therapeutics Ltd. (NASDAQ:ENLV) as of March 2022, which represents 0.01% of her total Q1 investments.
On June 6, Enlivex Therapeutics Ltd. (NASDAQ:ENLV) received authorization from the Israeli Ministry of Health (MOH) for the initiation of a company-sponsored Phase I/II clinical trial evaluating Allocetra, combined with chemotherapy in patients with peritoneal metastases arising from solid cancer.
In the first quarter of 2022, 2 hedge funds were long Enlivex Therapeutics Ltd. (NASDAQ:ENLV), with stakes valued at $2.78 million. This is compared to 3 funds being bullish on the stock in Q4, with a total stake value of approximately $2.64 million.
6. UroGen Pharma Ltd. (NASDAQ:URGN)
Percentage of ARK Investment Management’s 13F Portfolio: 0.01%
ARK Investment Management’s Stake Value: $2.9 million
Number of Hedge Fund Holders: 9
Market Capitalization: $191.98 million
UroGen Pharma Ltd (NASDAQ:URGN) is a biotechnology company that engages in the development and commercialization of novel solutions for specialty cancers and urothelial diseases. Cathie Wood, via ARK Investment Management, owns 333,472 shares in UroGen Pharma Ltd. (NASDAQ:URGN), worth $2.9 million at the end of the first quarter.
Earlier this April, Berenberg analyst Anita Dushyanth initiated coverage of UroGen Pharma Ltd. (NASDAQ:URGN) with a Buy rating and $20 price target. The analyst sees a considerable opportunity for UroGen’s novel RTGel drug-delivery technology in both high- and low-grade bladder cancers given that bladder cancer has a high rate of recurrence and is currently being treated predominantly with surgery.
Of the 9 hedge funds that were bullish on UroGen Pharma Ltd. (NASDAQ:URGN) in Q1 2022, the leading stakeholder of the company is Jeffrey Jay and David Kroin’s Great Point Partners, with 873,424 shares worth $7.6 million.
In addition to Block, Inc. (NYSE:SQ), Robinhood Markets, Inc. (NASDAQ:HOOD), and Shopify Inc. (NYSE:SHOP), UroGen Pharma Ltd. (NASDAQ:URGN) is a prominent stock in Cathie Wood’s portfolio.
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Disclosure: None. 10 Micro-Cap Stocks To Buy According To Cathie Wood is originally published on Insider Monkey.
