In this article, we will take a detailed look at the 10 Cathie Wood Stocks Insiders are Selling.
There was a time Cathie Wood talked about her famous “five-year investment horizon” with confidence, giving investors hope that the high-growth, cash-burning companies she was betting on would pay off in the future. But those profits remain elusive as the innovation-focused investor’s funds bleed assets and experience brutal exodus of investors. Cathie Wood’s flagship ARK Innovation ETF (ARKK) is down about 12% so far this year through April 26, compared to S&P 500’s 7% gain in the same period.
ARK ETFs See Funds Exodus as Investors Begin to Get “Frustrated”
Once a Wall Street darling that saw total assets under management swell to as much as $60 billion in February 2021, Ark Investment Management ETFs continue to see massive investor exodus as uncertainty about the future, dimming chances of rate cuts and an overall market shift towards safer, defensive stocks keep crushing risk appetite of retail as well as institutional investors. Data from FactSet shows that ARK Investment Management bled a whopping $2.2 billion from its six actively managed ETFs this year. Total funds under management at these ETFs declined by 30% in less than four months to $11.1 billion, according to FactSet data cited by Wall Street Journal. The report also quoted Todd Rosenbluth, head of research at industry data and analytics company VettaFi, who said even loyal customers of ARK funds are getting “frustrated” since 2024 should have been a better year for them given ARK’s emphasis on growth and innovation.
ARK’s Paradox: Losses in an Era of High Innovation
For years, Cathie Wood repeatedly talked about innovation, growth, technology disruption and how futuristic technology is set to change everything in human societies. Amid the AI revolution, hedge funds and retail investors left and right started making top dollar by investing in companies working on the AI frontiers. But Cathie Wood’s funds were laggards According to many, ARK’s burgeoning losses explain its paradox: it is probably invested in the wrong companies. It missed out on Nvidia. It’s heavily invested in Tesla (down 31% YTD) which is getting clobbered amid rising competition in the US and China (Cathie Wood reiterated her $2000 price target on TSLA recently). Half of ARK’s innovation fund is invested in just seven stocks. Roku and UiPath, which are part of ARK Investment Management’s top five holdings, are down 35% and 18% year to date through April 26, respectively.
ARK Fintech Innovation ETF Also Suffers Losses
Losses aren’t limited to the innovation fund. ARK Fintech Innovation ETF failed to see net inflows this year on any single day, according to a Bloomberg report, with its total assets under management falling below $1 billion. Some of the top holdings of the fund are Coinbase, Block and Shopify.
Cathie Wood Warns “Reality Check” Is Coming for AI Investors
Cathie Wood went all-in on genetics, 3D printing, biotechnology, self-driving and electric cars over the past few years. However, when it comes to AI, she seems too cautious and keeps warning investors of valuations. In her March 2024 letter to investors, Cathie Wood said investors enthusiastic about AI could get a “reality check” soon, as she expects future events to “separate winners from losers in the years ahead.” She drew an analogy between Nvidia of today and Cisco of 1994 which saw massive stock gains on the back of the market’s belief that the company would see strong demand for its products amid internet penetration. However, the stock suffered devastating losses as investors came to terms with realities.
“Today, Nvidia is guiding expectations to a sequential deceleration in growth and, reportedly, the lead time for its GPUs has dropped from 8-11 months to 3-4 months, suggesting that supply is increasing relative to demand. Without an explosion in software revenue to justify the overbuilding of GPU capacity, we would not be surprised to see a pause in spending, compounding a correction in excess inventories, particularly among the cloud customers that account for more than half of Nvidia’s data center sales. Longer term, unlike the history with Cisco, competition could intensify, not only because AMD is finding success but also because Nvidia’s customers—cloud service providers and companies like Tesla—are designing their own AI chips. That said, since 2019 futurists have collapsed the time to AGI[10] (Artificial General Intelligence) from 80 years to 8 years, so anything is possible,” Cathie Wood wrote.
Cathie Wood of ARK Investment Management
Methodology
In this article we wanted to see which stocks in Cathie Wood’s portfolio are seeing insider selling activity from corporate officers, executives and directors. For that we scanned Cathie Wood’s Q1’2024 portfolio and picked 10 stocks that saw insider selling over the past few months. Insider Monkey’s monthly newsletter and portfolio that focuses on activist hedge funds, insider trading and stock picks from hedge fund investor newsletters and conferences returned 199.2% between March 2017 and March 12, 2024 and outperformed the S&P 500 ETFs’ 144.9% gain by more than 54 percentage points.
10. Accolade Inc (NASDAQ:ACCD)
Cathie Wood’s Stake: $58,824,690
Number of Hedge Fund Investors: 15
Healthcare technology solutions company Accolade Inc (NASDAQ:ACCD) is one of the stocks in Cathie Wood portfolio that saw insider selling this year. Accolade Inc’s (NASDAQ:ACCD) CEO Rajeev Singh on April 18 sold 355 shares of Accolade Inc (NASDAQ:ACCD) at $8.82 per share. On the same day Accolade Inc’s (NASDAQ:ACCD) President Robert N. Cavanaugh, the President sold 141 shares of Accolade Inc (NASDAQ:ACCD) at $8.82 per share. Accolade Inc (NASDAQ:ACCD) also saw insider selling activity from its Chief Financial Officer and General Counsel earlier this month.
Like ACCD, Cathie Wood is also holding onto Tesla Inc (NASDAQ:TSLA), Coinbase Global Inc (NASDAQ:COIN) and UiPath Inc (NYSE:PATH).
9. Trimble Inc (NASDAQ:TRMB)
Cathie Wood’s Stake: $84,686,883
Number of Hedge Fund Investors: 29
Pete Large, Senior Vice President of Trimble Inc (NASDAQ:TRMB), sold 1,447 shares of Trimble Inc (NASDAQ:TRMB) at $59.10 per share on April 16. Since then Trimble Inc (NASDAQ:TRMB) stock is up 1.3%.
Out of the 933 funds tracked by Insider Monkey, 29 hedge funds reported owning stakes in Trimble Inc (NASDAQ:TRMB).
8. Pure Storage Inc (NYSE:PSTG)
Cathie Wood’s Stake: $22,915,320
Number of Hedge Fund Investors: 37
Cathie Wood owns a $23 million stake in Pure Storage Inc (NYSE:PSTG) as of the end of the first quarter of 2024. The stock recently saw insider selling activity when Scott Dietzen, a director at Pure Storage Inc (NYSE:PSTG), on April 4 dumped 272,541 shares at $53.33 per share. Since then the stock is down 1.5%. In addition to PSTG, Cathie Wood also likes Tesla Inc (NASDAQ:TSLA), Coinbase Global Inc (NASDAQ:COIN) and UiPath Inc (NYSE:PATH).
7. Natera Inc (NASDAQ:NTRA)
Cathie Wood’s Stake: $29,485,220
Number of Hedge Fund Investors: 50
Clinical genetic testing solutions company Natera Inc (NASDAQ:NTRA) is one of the rewarding investments of Cathie Wood as the stock is up 47% year to date through April 23. However, the stock saw insider selling on March 5 when Jonathan Sheena, the Co-founder of Natera Inc (NASDAQ:NTRA), sold 6,028 shares at a price of $88.64 per share. Since this transaction the stock is up 4%.
Baron Health Care Fund stated the following regarding Natera, Inc. (NASDAQ:NTRA) in its first quarter 2024 investor letter:
“Solid stock selection in life sciences tools & services was mainly due to double-digit gains from clinical genetic testing company Natera, Inc. (NASDAQ:NTRA) and global contract research organization ICON Plc. Natera’s stock was bolstered by significant momentum in the oncology market, where its personalized blood-based DNA test Signatera is driving strong testing volume growth. The test detects and quantifies how much residual cancer DNA remains in the body after surgery. Signatera helps physicians determine whether chemotherapy is necessary after surgery and monitor for cancer recurrence before the cancer is detectable with standard imaging. We think Natera has a long runway for growth with expanding margins and profitability.”
6. Cloudflare Inc (NYSE:NET)
Cathie Wood’s Stake: $38,090,985
Number of Hedge Fund Investors: 44
Cloudflare Inc (NYSE:NET) ranks sixth in our list of the Cathie Wood stocks seeing insider selling activity. On February 15, 2024, Cloudflare Inc’s (NYSE:NET) President and COO Michelle Zatlyn sold 461,540 shares of the Cloud computing company at $100.27 per share. Since then through April 23 Cloudflare Inc (NYSE:NET) shares have lost about 14% in value.
In addition to NET, Tesla Inc (NASDAQ:TSLA), Coinbase Global Inc (NASDAQ:COIN) and UiPath Inc (NYSE:PATH) are also important names in Cathie Wood’s portfolio.
As of the end of the fourth quarter of 2023, 44 hedge funds reported owning stakes in Cloudflare Inc (NYSE:NET).
Baron Fifth Avenue Growth Fund stated the following regarding Cloudflare, Inc. (NYSE:NET) in its fourth quarter 2023 investor letter:
“Most of our portfolio companies have seen stabilization and modest improvements in short-term business fundamentals as the year progressed. More importantly in our view, many have been able to drive significant improvement in long-term Key Performance Indicators (KPIs) such as share gains, meaningful expansion of their total addressable market, and improvement in unit economics. These KPIs are significantly more important in driving the intrinsic values of our businesses, which we believe have increased noticeably during 2023. In the meantime, disruptive changes that we expect will benefit many of our businesses have also continued to pick up steam. Some examples include: • Another example is the leading cloud networking and cybersecurity solution provider, Cloudflare, Inc. (NYSE:NET), who described market share gains and customers consolidating from multiple point solutions to Cloudflare’s platform: “And so we’re the one vendor that is able to give people that vendor consolidation, that single pane of glass… that comes through in a lot of customer examples…. people want to buy the entire Cloudflare platform. They want to protect their entire business with that, and that’s driving more interest in both our network security, as well as our Zero Trust products.”
5. Moderna Inc (NASDAQ:MRNA)
Cathie Wood’s Stake: $129,724,309
Number of Hedge Fund Investors: 39
Moderna Inc (NASDAQ:MRNA) ranks fifth in our list of the stocks in Cathie Wood’s portfolio seeing insider selling. Stephen Hoge, Moderna Inc’s (NASDAQ:MRNA) President, on April 15 sold 15,000 company shares at $105.02 per share. Noubar Afeyan, who has a director status at Moderna Inc (NASDAQ:MRNA), also dumped 8,243 shares of Moderna Inc (NASDAQ:MRNA) at $103.10 per share on April 17. Since then Moderna Inc (NASDAQ:MRNA) shares have gained about 4.31%.
4. Meta Platforms Inc (NASDAQ:META)
Cathie Wood’s Stake: $211,950,861
Number of Hedge Fund Investors: 242
In addition to seeing huge selling activity from Mark Zuckerberg, Meta Platforms Inc (NASDAQ:META) shares were dumped by several other company executives too. However, many of these transactions were part of scheduled sales. On February 15, 2024, Meta’s CFO Susan J. Li sold 30,194 shares of Meta Platforms Inc (NASDAQ:META) at $475.43 per share. Since then the stock is up 2%.
Meta Platforms Inc’s (NASDAQ:META) COO Javier Olivan on April 19 sold 490 shares of Meta Platforms Inc (NASDAQ:META) at $501.18 per share. Since then the stock is up 3%.
In one of our articles, we talked about an insider trading analyst who called Mark Zuckerberg’s selling of Meta shares a “red flag” because of a weird pattern he noticed. Read more details here.
Patient Capital Opportunity Equity Strategy stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its first quarter 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) was a top contributor in the first quarter gaining another 37.5%. Performance has been supported by strong top and bottom-line growth as the company maintains its leadership in the advertising space, despite Reels still being under monetized versus Newsfeed and Stories. The company continues to return cash to shareholders, increasing their buyback program by another $50B in February (6.4% of shares outstanding), and announcing their first dividend of $0.50 per share (0.39% yield). The company trades at 25x this year’s earnings, which we do not view as too demanding for a company with some of the best AI assets, an improving topline that should lead to free cash flow outperformance and continued capital return.”
3. Zoom Video Communications Inc (NASDAQ:ZM)
Cathie Wood’s Stake: $413,826,532
Number of Hedge Fund Investors: 41
Cathie Wood has been holding onto Zoom Video Communications Inc (NASDAQ:ZM) despite the stock’s decline from its glory days back in the pandemic era. Many believe Zoom Video Communications Inc (NASDAQ:ZM) will never see the demand it saw during the pandemic amid increasing competition and a decline in work from home trends. Aparna Bawa, a director at Zoom Video Communications Inc (NASDAQ:ZM), on April 18 sold 21,468 shares of Zoom Video Communications Inc (NASDAQ:ZM). Since then Zoom Video Communications Inc (NASDAQ:ZM) is up 2% as of April 24.
Meridian Hedged Equity Fund made the following comment about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q3 2023 investor letter:
“Zoom Video Communications, Inc. (NASDAQ:ZM) provides video conferencing software widely used for virtual meetings, webinars, and online collaboration by businesses, schools, and individuals. The company has shown stability in its business model after a remarkable rise in 2020. While its valuation is more reasonable now, the company maintains strong operating margins. The enterprise sector, particularly through successful upselling, has shown resilience despite economic headwinds and seat churn. Zoom’s contact center solution has shown early traction with a growing roster of customers and a rapid rollout of new features, showing strong potential for future growth. The stock performed well during the quarter following results that exceeded expectations, reaffirming its potential for growth.”
2. Roblox Corp (NYSE:RBLX)
Cathie Wood’s Stake: $451,258,524
Number of Hedge Fund Investors: 50
Ranking second in our list of the stocks in Cathie Wood’s portfolio sold by insiders is Roblox Corp (NYSE:RBLX). On January 24, 2024, Gregory Baszucki, a director at Roblox Corp (NYSE:RBLX), sold 8,333 shares at a price of $41.17 per share. Since then the stock is down 11%.
1. Coinbase Global Inc (NASDAQ:COIN)
Cathie Wood’s Stake: $1,172,098,890
Number of Hedge Fund Investors: 41
Coinbase Global Inc (NASDAQ:COIN) is one of the few rewarding investments of Cathie Wood this year, since the stock is up 50% in 2024 through April 23. Yet Coinbase Global Inc’s (NASDAQ:COIN) CEO Brian Armstrong is busy selling Coinbase shares. He sold 250,000 shares of Coinbase Global Inc (NASDAQ:COIN) at $259.87 per share on March 8, leaving no stake in Coinbase Global Inc (NASDAQ:COIN). Coinbase President and COO Emilie Choi also sold 100,000 shares of Coinbase Global Inc (NASDAQ:COIN) at $249.9 per share. Since this transaction Coinbase Global Inc (NASDAQ:COIN) stock is down 8%.
Patient Capital Opportunity Equity Strategy stated the following regarding Coinbase Global, Inc. (NASDAQ:COIN) in its first quarter 2024 investor letter:
“This quarter we benefited from our exposure in the cryptocurrency space. The approval of 11 new spot Bitcoin ETFs dramatically opened Bitcoin to new investors for the first time. Investors’ interest was material, with assets under management growing to $55B over a single quarter. Coinbase Global, Inc. (NASDAQ:COIN) was a beneficiary of these events as we believe it is building the foundation of the crypto-ecosystem. We continue to believe COIN has the potential to be the platform for crypto as it has continued to widen its moat by investing throughout the most recent crypto winter.”
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Disclosure. None. 10 Cathie Wood Stocks Insiders are Selling was initially published on Insider Monkey.
