In this article, we discuss the 5 best ARK stocks to buy now. If you want to read the detailed analysis of ARK Investment Management and its hedge fund performance, skip directly to the 14 Best ARK Stocks To Buy Now.
5. Exact Sciences Corporation (NASDAQ:EXAS)
Value of ARK Investment Management’s 13F Position: $570.580 million
Number of Hedge Fund Holders: 34
Exact Sciences Corporation (NASDAQ:EXAS) is a Massachusetts-based company focusing on molecular diagnostics for the detection of early-stage cancers. ARK Investment Management increased its holdings in the company in Q3 to 17.56 million shares worth $570.580 million.
On November 14, Piper Sandler analyst David Westenberg reaffirmed a Neutral rating on Exact Sciences Corporation (NASDAQ:EXAS) and raised the price target from $40 to $50. Westenberg updated his price target due to the company’s latest earnings report.
Here is what RiverPark Funds had to say about Exact Sciences Corporation in its Q4 2021 investor letter:
“Exact Sciences: EXAS shares declined on a disappointing recovery in Cologuard screening due to COVID. Despite continued revenue growth from Precision Oncology and COVID testing, and Cologuard screening revenue growth of 30%, COVID restrictions limited access to physicians’ offices for the company’s and its Pfizer Joint Venture sales force as well as causing a severe drop off of in-person wellness visits.
In the last year, Exact has also pivoted the company significantly from its single cancer screening tests (Cologuard for colon cancer and Oncotype for breast cancer) to multi-cancer screening through its Thrive acquisition, and to minimal residual disease and recurrence monitoring through its Ashion and Tardis acquisitions. Through this pivot, Exact has tripled its market opportunity from $20 billion to $60 billion.”
4. UiPath Inc. (NYSE:PATH)
Value of ARK Investment Management’s 13F Position: $581.120 million
Number of Hedge Fund Holders: 26
UiPath Inc. (NYSE:PATH) is a New York-based company that makes robotic process automation software, a type of business process automation software. The company went public in 2021 and has offices in 31 countries. UiPath Inc. (NYSE:PATH) serves customers globally.
UiPath Inc. (NYSE:PATH) was a part of 26 hedge fund portfolios in Q3 2022 with a combined value of $993.548 million, up from 24 hedge funds with a total stock value of approximately $1.3 billion. ARK Investment Management held over 46 million company shares worth $581.120 million, representing 4.05% of its portfolio.
ClearBridge Investments made the following comment about UiPath Inc. (NYSE:PATH) in its Q3 2022 investor letter:
“Over the last three months, we similarly exited UiPath Inc. (NYSE:PATH) due to a change to our original thesis as we believe a new go-to-market strategy for its automation software could impact near-term execution. While we think process automation is a growing market, in a slowing macro environment single solutions may be more vulnerable than the platform solutions of software providers who can bundle products to meet a wide range of needs. In addition, the company has a material component of sales sourced in Europe where the economy is more vulnerable.”
3. Roku, Inc. (NASDAQ:ROKU)
Value of ARK Investment Management’s 13F Position: $672.168 million
Number of Hedge Fund Holders: 33
Roku, Inc. (NASDAQ:ROKU) designs and sells digital media players used for streaming media content. The company has over 65 million active accounts as of the September quarter.
ARK Investment Management was the largest stakeholder of Roku, Inc. (NASDAQ:ROKU) in Q3 with 11.9 million shares, valued at $672.168 million. The company makes up 4.68% of ARK’s portfolio. 33 hedge funds were bullish on Roku, Inc. (NASDAQ:ROKU) in Q3 2022.
Here is what Saga Partners had to say about Roku, Inc. (NASDAQ:ROKU) in its Q2 2022 investor letter:
“The Portfolio first bought Roku in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…” (Click here to see the full text)
2. Zoom Video Communications, Inc. (NASDAQ:ZM)
Value of ARK Investment Management’s 13F Position: $801.494 million
Number of Hedge Fund Holders: 40
Zoom Video Communications, Inc. (NASDAQ:ZM) is an American video communications technology company headquartered in California. The company’s video communication platform holds 55.4% of the total market share with its closest competitor, Microsoft Teams, covering 20.93% of the market share. Zoom Video Communications, Inc. (NASDAQ:ZM) takes the second spot in our list of best ARK stocks.
ARK Investment Management was quite bullish on Zoom Video Communications, Inc. (NASDAQ:ZM) in Q3 2022 and increased its holdings in the company by 14%.
1. Tesla, Inc. (NASDAQ:TSLA)
Value of ARK Investment Management’s 13F Position: $1.082 billion
Number of Hedge Fund Holders: 88
Tesla, Inc. (NASDAQ:TSLA) is an American automotive company that manufactures and sells electric vehicles and battery energy storage systems. The company takes the top spot in our list of best ARK stocks. ARK Investment Management owned over 4 million of the company shares, worth $1.082 billion, after increasing its holdings in the company by 183% in the third quarter. Moreover, ARK Investment Management bought an additional 74,862 shares of Tesla, Inc. (NASDAQ:TSLA), valued at $11.7 million on December 14.
On December 15, RBC Capital analyst Joseph Spak reiterated an Outperform rating on Tesla, Inc. (NASDAQ:TSLA)’s shares and lowered the price target to $225 from $325. Spak believes that once the gross margins recalibrate, the company should experience better earnings and free cash flow growth. However, until that happens, the shares are likely to remain under pressure.
Between December 12 and 14, Tesla, Inc. (NASDAQ:TSLA)’s CEO Elon Musk sold 22 million shares of the company, worth about $3.58 billion. Musk still owns around 13.4% of the company with around 423.6 million shares.
Here is what Baron Funds had to say about Tesla, Inc. (NASDAQ:TSLA) in its Q2 2022 investor letter:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…” (Click here to see the full text)
You can also take a look at the 13 Biggest Meat Processing Companies in the US and 16 Large-Cap Stocks with Insider Buying.
