Cathie Wood is Buying These 10 Stocks on the Dip

Published on September 21, 2022 at 9:04 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 10 stocks that Cathie Wood is buying on the dip. If you want to read about some more stocks in the Wood portfolio, go directly to Cathie Wood is Buying These 5 Stocks on the Dip.

The technology-heavy NASDAQ Composite has taken a severe beating in the past few weeks, plunging close to 8% in the past month to drop down nearly 28% year-to-date as recession fears and historical tightening by the Federal Reserve batter growth stocks. One of the biggest losers from this developing situation has been Cathie Wood of ARK Investment Management, who has seen the value of her equity portfolio decline by nearly $6 billion between March and June 2022. Her flagship ARK Innovation ETF is down over 57% year-to-date.

Wood, famously bullish on growth names like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), is using the market downturn to go on a buying binge. Per data compiled by news publication Bloomberg on September 13, one of the worst days for the NASDAQ Composite since March 2020, her investment firm made new purchases in 27 growth stocks across eight different ETFs. Wood has snapped up the shares of automaker General Motors Company (NYSE:GM) for the first time since May.

Wood has criticized the decisions of the central bank to raise interest rates as she seeks some cover against her risky bets. On September 13, Wood said that the decision of the Fed to raise rates “will prove a mistake” as deflationary pressures were building. Wood cited falling commodity and freight charges, as well as stable gold prices, to make the claim that the supply chain issues responsible for inflation were moderating, and a recession in the United States economy would bring down prices even further.

Our Methodology

These were picked from the investment portfolio of ARK Investment Management at the end of the second quarter of 2022. Only equities in which the hedge fund increased stakes between March and June, compared to first quarter filings, were selected. The stocks that registered a more than 50% decline in share price since the start of the year were preferred for the list. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to quantify the popularity of each stock in the hedge fund universe.

Cathie Wood of ARK Investment Management

Cathie Wood is Buying These Stocks on the Dip

10. Fiverr International Ltd. (NYSE:FVRR)

Number of Hedge Fund Holders: 16

Percentage Increase in Stake During Q2 2022: 23%

Loss in Share Price Year-to-Date as of September 21: 71%

Fiverr International Ltd. (NYSE:FVRR) operates an online marketplace worldwide. At the end of June 2022, ARK Investment Management owned 40,565 shares in Fiverr International Ltd. (NYSE:FVRR) worth $1.7 million, representing 0.01% of the portfolio.

On August 5, investment advisory Needham maintained a Buy rating on Fiverr International Ltd. (NYSE:FVRR) stock and raised the price target to $50 from $40. Analyst Bernie McTernan issued the ratings update.

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Millennium Management is a leading shareholder in Fiverr International Ltd. (NYSE:FVRR), with 678,656 shares worth more than $23 million.

Just like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Fiverr International Ltd. (NYSE:FVRR) is one of the stocks that Cathie Wood is buying on the dip.

9. XPeng Inc. (NYSE:XPEV)

Number of Hedge Fund Holders: 24

Percentage Increase in Stake During Q2 2022: 2%

Loss in Share Price Year-to-Date as of September 21: 68%

XPeng Inc. (NYSE:XPEV) designs, develops, manufactures, and markets smart electric vehicles in China. The hedge fund chaired by Wood owned close to 946,650 shares of XPeng Inc. (NYSE:XPEV) at the end of June 2022 worth $22 million, representing 0.13% of the portfolio.

On August 24, investment advisory Citi maintained a Buy rating on XPeng Inc. (NYSE:XPEV) stock and lowered the price target to $27.87 from $51.59. Analyst Jeff Chung issued the ratings update.

At the end of the second quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $618.7 million in XPeng Inc. (NYSE:XPEV), compared to 26 in the preceding quarter worth $783.9 million.

8. monday.com Ltd. (NASDAQ:MNDY)

Number of Hedge Fund Holders: 25

Percentage Increase in Stake During Q2 2022: 14%

Loss in Share Price Year-to-Date as of September 21: 56%

monday.com Ltd (NASDAQ:MNDY), together with its subsidiaries, develops software applications. Regulatory filings reveal that ARK owned over 236,620 shares of monday.com Ltd (NASDAQ:MNDY) at the end of June 2022 worth $26 million, representing 0.15% of the total portfolio.

On September 12, Loop Capital analyst Mark Schappel initiated coverage of monday.com Ltd (NASDAQ:MNDY) stock with a Buy rating and a price target of $175, noting the firm was a likely winner in the emerging digital teamwork tools market.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management is a leading shareholder in monday.com Ltd (NASDAQ:MNDY), with 778,126 shares worth more than $80 million.

7. InMode Ltd. (NASDAQ:INMD)

Number of Hedge Fund Holders: 27

Percentage Increase in Stake During Q2 2022: 29%

Loss in Share Price Year-to-Date as of September 21: 52%

InModel Ltd. (NASDAQ:INMD) develops, manufactures, and markets minimally invasive aesthetic medical products based on its proprietary radio frequency assisted lipolysis and deep sub-dermal fractional radio frequency technologies. Securities filings reveal that ARK owned 73,637 shares of InMode Ltd. (NASDAQ:INMD) at the end of the second quarter of 2022 worth $1.9 million, representing a very small portion of the portfolio.

On August 29, Baird analyst Jeff Johnson maintained an Outperform rating on InMode Ltd. (NASDAQ:INMD) stock and raised the price target to $53 from $44, noting that the demand for the products of the firm would improve in the coming months.

Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in InModel Ltd. (NASDAQ:INMD), with 3.1 million shares worth more than $69 million.

In its Q3 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and InModel Ltd. (NASDAQ:INMD) was one of them. Here is what the fund said:

“InModel Ltd. (NASDAQ:INMD) was among the topic contributors to performance. InMode designs, develops, manufactures and commercializes innovative minimally invasive and non-invasive aesthetic medical products. InMode’s platforms harness novel radio frequency (RF) technology to enable emerging minimally invasive procedures that bridge the gap between temporary treatments like facials and more invasive surgical procedures like facelifts across several categories of surgical specialties such as plastic surgery, gynaecology, dermatology, ophthalmology and otolaryngology (ear, nose and throat care).

The aesthetics market is seeing strong tailwinds coming out of the Covid-19 pandemic. These tailwinds include the “Zoom effect,” or dissatisfaction with one’s personal appearance after viewing one’s own face on Zoom, which has resulted in more people deciding to undergo aesthetic procedures. De-stigmatization of aesthetics procedures, aided by social media platforms, is also supportive of InMode’s results. Between the strong growth of its existing product lines and the anticipated launch of two new products, investors perceive InMode as being well positioned to capitalize on the broader strength of the aesthetics market, which is a key reason shares outperformed in the third quarter.”

6. Roku, Inc. (NASDAQ:ROKU)

Number of Hedge Fund Holders: 34

Percentage Increase in Stake During Q2 2022: 23%

Loss in Share Price Year-to-Date as of September 21: 70%

Roku, Inc. (NASDAQ:ROKU) operates a TV streaming platform. The hedge fund chaired by Wood owned close to 10.1 million shares of Roku, Inc. (NASDAQ:ROKU) at the end of June 2022 worth $962 million.

On September 8, investment advisory Pivotal Research upgraded Roku, Inc. (NASDAQ:ROKU) stock to Hold from Sell with a price target of $60. Analyst Jeffrey Wlodarczak issued the ratings update.

At the end of the second quarter of 2022, 34 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Roku, Inc. (NASDAQ:ROKU), compared to 34 in the preceding quarter worth $1.7 billion.

In addition to Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Roku, Inc. (NASDAQ:ROKU) is one of the stocks that Cathie Wood is buying on the dip.

In its Q2 2022 investor letter, Saga Partners, an asset management firm, highlighted a few stocks and Roku, Inc. (NASDAQ:ROKU) was one of them. Here is what the fund said:

“The Portfolio first bought Roku, Inc. (NASDAQ: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…

In their most recent results, Roku, Inc. (NASDAQ:ROKU) reported softer advertising dollars as nearly half of advertisers paused ad campaigns in response to macro uncertainty. While advertising will come and go, the key is that Roku can continue to gather eyeballs and then the rest will work itself out in the long run. In my opinion, the market is underappreciating the power of Roku’s competitive advantage in the TV ecosystem and ability to scale far into the future.…(read more)

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