In this article, we discuss the 5 stocks Cathie Wood is selling. If you want to read our detailed analysis of these stocks, go directly to the 10 Stocks Cathie Wood Is Selling.
5. Illumina, Inc. (NASDAQ: ILMN)
Number of Hedge Fund Holders: 52
Illumina, Inc. (NASDAQ: ILMN) is a healthcare firm that provides genetic analysis. It is placed fifth on our list of 10 stocks Cathie Wood is selling. The stock has returned 27% to investors in the past twelve months. ARK Investment Management has sold off its entire stake in the healthcare firm during the first quarter of 2021. Despite the sale from such a profile investor, the firm managed to beat market expectations on revenue and earnings per share for the first three months of 2021.
On June 4, Illumina, Inc. (NASDAQ: ILMN) stock jumped close to 4% after GRAIL, a cancer firm that has been purchased by Illumina for more than $7 billion, announced positive results from a new early cancer detection test.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm Generation Investment Management is a leading shareholder in Illumina, Inc. (NASDAQ: ILMN) with 1.3 million shares worth more than $517 million.
In its Q1 2021 investor letter, Bonsai Partners, an asset management firm, highlighted a few stocks and Illumina, Inc. (NASDAQ: ILMN) was one of them. Here is what the fund said:
“Illumina is the leading provider of genomic sequencing instruments and reagents. Illumina’s shares appreciated 3.8%.
Similar to last quarter, this quarter was relatively quiet for Illumina. The company positively preannounced earnings for the first quarter as catch-up demand for lab genomics was robust.
On the regulatory front, the Federal Trade Commission opposed Illumina’s acquisition of GRAIL, which is ironic considering it was once a part of Illumina before it spun out. I have no way of knowing whether the deal will go through.”
4. Okta, Inc. (NASDAQ: OKTA)
Number of Hedge Fund Holders: 48
Okta, Inc. (NASDAQ: OKTA) is ranked fourth on our list of 10 stocks Cathie Wood is selling. The company’s shares have returned 13% to investors in the past twelve months. The firm sells identity management and security platforms for businesses and governments. In the first three months of 2021, Wood sold the entire stake of ARK Investment Management in the cyber security company. However, the firm still beat market expectations on earnings per share and revenue in results for the first quarter.
On May 27, investment advisory Piper Sandler gave Okta, Inc. (NASDAQ: OKTA) stock a Neutral rating and assigned it a price target of $235. Rob Owens, an analyst at the firm, said there was uncertainty regarding the firm with a CFO transition and guidance numbers.
At the end of the first quarter of 2021, 48 hedge funds in the database of Insider Monkey held stakes worth $1.6 billion in Okta, Inc. (NASDAQ: OKTA), down from 61 in the preceding quarter worth $2.3 billion.
3. Slack Technologies, Inc. (NYSE: WORK)
Number of Hedge Fund Holders: 60
Slack Technologies, Inc. (NYSE: WORK) stock has returned 29% to investors in the past year. The company owns and operates a business technology software platform. It is placed third on our list of 10 stocks Cathie Wood is selling. Wood has significantly trimmed the stake of ARK Investment Management in the firm in the first quarter. At the end of March, ARK Investment owned just 4,735 shares in the firm worth close to $200,000.
On June 3, Slack Technologies, Inc. (NYSE: WORK) posted earnings results for the first quarter of 2021, reporting earnings per share of $0.08, beating market expectations by $0.09. The revenue over the period was more than $270 million, up 35% year-on-year.
At the end of the first quarter of 2021, 60 hedge funds in the database of Insider Monkey held stakes worth $4.2 billion in Slack Technologies, Inc. (NYSE: WORK), down from 66 in the preceding quarter worth $3.9 billion.
In its Q4 2020 investor letter, RV Capital, an asset management firm, highlighted a few stocks and Slack Technologies, Inc. (NYSE: WORK) was one of them. Here is what the fund said:
“We became co-owners in Slack, a channels-based communication service for businesses. In an unexpected twist, a few months later it was acquired by Salesforce.com at roughly a 50% premium to what we had paid.
In accordance with my usual practice, I was planning on writing about our investment in Slack. By laying out my investment hypothesis at the onset of an investment, I hope to enable investors to assess in hindsight whether it worked (or not) because of a plausible investment philosophy consistently applied. Given that Slack has effectively already played out as an investment, this rationale has gone. After all, anyone can make a successful investment decision look smart after the fact.
There is one element of my Slack investment thesis that I would like to lay out as it neatly illustrates an idea in my first-half letter and has not yet played out. I wrote then that I wanted to invest more in “early-stage, listed companies”. What I meant by this are companies whose moat is not yet fully developed, but not so undeveloped that it is difficult to say if they will ever have one. I described early-stage companies as possessing:
The kernel of an idea (however unformed), which – if you squint – you can imagine creating a new paradigm in decades to come.
Slack was the type of company I had in mind when I wrote this. Its moat in its core business of providing channels-based communication within companies is well developed. It benefits from a network effect (the more employees on Slack, the higher the value they derive from it), a broad developer ecosystem (thousands of integrations have been built for Slack) and switching costs (Slack becomes tightly interwoven into a company’s workflow through said integrations).
What really got me excited – the new paradigm – is “Slack Connect”. Connect is a feature that allows companies to extend Slack beyond their own organisation to external partners. Connect has not yet achieved viral growth – the moat is not yet developed.”
2. Salesforce.com, Inc. (NYSE: CRM)
Number of Hedge Fund Holders: 91
Salesforce.com, Inc. (NYSE: CRM) is a company that markets cloud computing solutions. It is ranked second on our list of 10 stocks Cathie Wood is selling. The company’s shares have offered investors returns exceeding 24% over the course of the past year. Wood sold off the entire stake of ARK Investment Management in the cloud firm during the first three months of this year.
On July 1, Salesforce.com, Inc. (NYSE: CRM) announced that it had partnered with Datadog, a cloud monitoring service, to provide administration and security with the ability to respond to suspicious behaviour. The deal strengthens the internal security of the firm.
Out of the hedge funds being tracked by Insider Monkey, Washington-based investment firm Fisher Asset Management is a leading shareholder in Salesforce.com, Inc. (NYSE: CRM) with 12.9 million shares worth more than $2.7 billion.
In its Q1 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Salesforce.com, Inc. (NYSE: CRM) was one of them. Here is what the fund said:
“We added to our software-as-a-service (SaaS) exposure with the initiation of SaaS leader salesforce.com, which develops software for customer relationship management (we added Workday, which enterprise resource planning applications, last quarter). Saleforce.com is well-positioned in the most attractive end markets in software and will benefit from secular drivers such as remote work and the digital transformation. Salesforce.com is a sustainability leader as well, with a commitment to carbon-neutral cloud, toward which it has set a goal of 100% renewable energy for global operations by fiscal year 2022. The company has a strong focus on equality, in terms of equal rights, pay, education and opportunity. As a data company it has been leading on workforce disclosures and seeks to have 50% of its U.S. workforce made up of underrepresented groups by 2024.”
1. Alphabet Inc. (NASDAQ: GOOG)
Number of Hedge Fund Holders: 159
Alphabet Inc. (NASDAQ: GOOG) is placed first on our list of 10 stocks Cathie Wood is selling. The stock has offered investors returns exceeding 73% over the course of the past twelve months. It is a technology company with interests in a wide variety of internet-related businesses. ARK Investment Management has sold off almost its entire stake in the firm over the past few months. At the end of March, the fund owned just three shares in the California company worth $6,000.
On June 29, investment advisory Argus maintained a Buy rating on Alphabet Inc. (NASDAQ: GOOG) stock with a price target of $2,800. Joseph Bonner, an analyst at the firm, said that the company was beset by antitrust cases that would take years to play out in court.
Out of the hedge funds being tracked by Insider Monkey, London-based investment firm TCI Fund Management is a leading shareholder in the firm with 2.9 million shares worth more than $6.1 billion.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Alphabet Inc. (NASDAQ: GOOG) was one of them. Here is what the fund said:
“Large-cap tech companies have been resilient through the pandemic—Alphabet among them. A top contributor, Alphabet’s Play Store and Google Cloud are in demand as businesses accelerate online activity which, along with strong YouTube user growth, is helping stabilize temporarily weaker search ad revenue trends. Through the lens of our disciplined bottom-up research process, we view Alphabet as one of the best businesses in the world, capable of expanding revenues at a rapid rate for years to come, with a bullet proof balance sheet and an average asking price. It’s a name we’ve owned since 2012 and for which we continue to have high hopes regarding future prospects.”
You can also take a peek at 10 Best Software Stocks to Buy According to Cathie Wood and 12 Best Ecommerce Stocks to Invest In.
