In this article, we discuss the 10 stocks that Cathie Wood is loading up on.
Cathie Wood of ARK Investment Management has been under fire for her growth-focused investment strategy amid recession fears in the past few months. Her flagship ARK Innovation Fund, one of the best-performing investment vehicles of the pandemic-ravaged 2020 with a gain of over 152% during the year, is down over 58% year-to-date as investors shift away from risky bets towards value options in light of rising interest rates. Wood managed an equity portfolio worth close to $17 billion at the end of the second quarter of 2022.
Some of the top stocks in the portfolio include Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX). Between March and June 2022, the value of the equity portfolio decreased by around $6 billion. In this time, Wood made new purchases in 9 stocks, sold out of 12, reduced holdings in 223, and made additional purchases in 102 stocks. The top ten holdings comprise over 46% of the overall portfolio. The top holdings are concentrated in the tech and healthcare sectors.
The woes of her fund have seen investors pull money from under her management. Data compiled by news publication Bloomberg reveals that there was nearly $803 million in outflows from her flagship fund in the month of August, the biggest monthly outflow since September 2021. The fund also witnessed daily inflows during just six days in August. The performance of her fund so far this year does not compare favorably to the benchmark S&P 500, which is down only around 18% year-to-date.
Our Methodology
These were picked according to 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 by at least 20% or more, between March and June, compared to first quarter filings, were selected. 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 Loading Up on These Stocks
10. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 34
Percentage Increase in Stake During Q2 2022: 23%
Roku, Inc. (NASDAQ:ROKU) owns and runs a TV streaming platform. The hedge fund chaired by Wood owned close to 10.1 million shares of Roku, Inc. at the end of June 2022 worth $962 million.
On August 26, Truist analyst Matthew Thornton maintained a Buy rating on Roku, Inc. stock and lowered the price target to $90 from $120, noting that the firm had posted weaker than expected earnings in the second quarter.
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., the same as in the preceding quarter worth $1.7 billion.
Just like Tesla, Inc., Sea Limited, and Roblox Corporation, Roku, Inc. is one of the stocks that Cathie Wood is bullish on.
In its Q3 2021 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Roku, Inc. was one of them. Here is what the fund said:
“Since we bought Roku, Inc., no stock has contributed more to our returns and no stock has been more volatile in our portfolio. This is now our third drawdown in the stock of over 30% and our second of over 60%. Fortunately (or tactically) before the two 60% drawdowns we had trimmed our positions by at least a third, though unfortunately that meant we still held large slices of the stock on the way down. Despite the stock having soared too far, too fast and thinking it was due for a period of digestion, we believe over our timeframe even the former highs will be rewarded with a good result. We have often pointed out that volatility in companies like Roku is the market’s way of grappling with a really wide range of potential outcomes and that remains as true today as ever, though the range of outcomes continues to narrow for the better for Roku.
Roku, Inc. today is trading at lower multiples than at any point as a public company, meanwhile its revenue and margin composition has evolved from majority hardware to vast majority platform– in other words, each $1 of revenue is much more valuable today than ever before for Roku. Roku today is a profitable company for the first time in its history. Roku today has a multitude of investment opportunities within its own platform that can drive considerable value. Early in 2021 at higher prices, one had to believe the company would grow accounts internationally to justify valuations. This was so, because the company has so quickly achieved substantial penetration of the US market with 56.4m reported household customers of the ~130m total US households, that further growth in the US household count will be challenging and because prices were so high. Today, one merely needs to believe that with around 60 million households (the expectation for the yet reported year-end 2021 number), ARPU has a strong enough growth tailwind to reach $100 within a reasonable time, without relying on any incremental account growth. For context, as of Q3 this year, ARPU was $40, up 49% year-over-year and we know it will be higher in Q4. Growth in ARPU is underpinned by the continuing migration of viewer hours to CTV. The subforces behind this are increasing the penetration of Roku devices within households (go from one Roku to TV to 2-4), increasing the hours that each house watches (getting from shy of 4 hours to the nearly 8 hours an average American household watches TV) and broadening the content on the platform, increasing the share of inventory with content companies and more hours (like live sports viewing) shifting from linear to CTV. We further believe the opportunity to become the bundler and/or hub of household content subscriptions is growing, as evidenced by the rise in credit card pings per user from 1 to 1.3 per month and its continuing ascension. In this respect, Roku has the right to win with their installed base, because the experience is exponentially better than legacy and competing offerings…” (Click here to see the full text)
9. Fiverr International Ltd. (NYSE:FVRR)
Number of Hedge Fund Holders: 16
Percentage Increase in Stake During Q2 2022: 23%
Fiverr International Ltd. (NYSE:FVRR) owns and runs an online marketplace for talent. At the end of June 2022, ARK Investment Management owned 40,565 shares in Fiverr International Ltd. worth $1.7 million, representing 0.01% of the portfolio.
On August 5, Needham analyst Bernie McTernan maintained a Buy rating on Fiverr International Ltd. stock and raised the price target to $50 from $40, noting the firm was ramping up profitability faster in response to a continued lack of end market momentum.
At the end of the second quarter of 2022, 16 hedge funds in the database of Insider Monkey held stakes worth $79 million in Fiverr International Ltd., the same as in the previous quarter worth $302 million.
8. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 29
Percentage Increase in Stake During Q2 2022: 29%
Coinbase Global, Inc. (NASDAQ:COIN) owns and runs a cryptocurrency exchange platform. Latest data shows that ARK Investment Management owned 8.9 million shares of Coinbase Global, Inc. at the end of the second quarter of 2022 worth $699 million, representing 4.13% of the portfolio.
On August 31, Barclays analyst Benjamin Budish initiated coverage of Coinbase Global, Inc. stock with an Equal Weight rating and a price target of $80, noting that the near-term outlook for the firm would be challenging.
Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in Coinbase Global, Inc., with 4.2 million shares worth more than $199 million.
In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. was one of them. Here is what the fund said:
“Coinbase Global Inc. Ordinary Shares fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”
7. Accolade, Inc. (NASDAQ:ACCD)
Number of Hedge Fund Holders: 15
Percentage Increase in Stake During Q2 2022: 29%
Accolade, Inc. (NASDAQ:ACCD) is a technology-first healthcare company. ARK Investment Management owned 6.2 million shares in Accolade, Inc. at the end of June 2022 worth $40 million, representing 0.23% of the portfolio of the fund.
On August 16, DA Davidson analyst Robert Simmons initiated coverage of Accolade, Inc. stock with a Buy rating and a price target of $16, noting the firm was developing close and trusted relationships with members to deliver better outcomes.
At the end of the second quarter of 2022, 15 hedge funds in the database of Insider Monkey held stakes worth $90 million in Accolade, Inc., compared to 22 the preceding quarter worth $174 million.
6. InMode Ltd. (NASDAQ:INMD)
Number of Hedge Fund Holders: 27
Percentage Increase in Stake During Q2 2022: 29%
InMode Ltd. (NASDAQ:INMD) makes and sells healthcare equipment. Securities filings reveal that ARK owned 73,637 shares of InMode Ltd. at the end of the second quarter of 2022 worth $1.9 million, representing a very small percentage of the portfolio.
On August 29, Baird analyst Jeff Johnson maintained an Outperform rating on InMode Ltd. 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 InMode Ltd. with 3.1 million shares worth more than $69 million.
In addition to Tesla, Inc., Sea Limited, and Roblox Corporation, InMode Ltd. is one of the stocks that Cathie Wood is buying.
In its Q3 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and InMode Ltd. was one of them. Here is what the fund said:
“InMode Ltd. 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, gynecology, 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 Ltd. 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.”
5. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 41
Percentage Increase in Stake During Q2 2022: 33%
Cloudflare, Inc. (NYSE:NET) owns and runs a cloud platform. According to regulatory filings, ARK Investment Management owned 324,635 shares in Cloudflare, Inc. at the end of June 2022 worth $18 million, representing 0.10% of the portfolio.
On August 11, Guggenheim analyst John DiFucci initiated coverage of Cloudflare, Inc. stock with a Neutral rating and a price target of $82, noting that the firm was trading at a premium to peers.
At the end of the second quarter of 2022, 41 hedge funds in the database of Insider Monkey held stakes worth $541 million in Cloudflare, Inc., compared to 44 in the previous quarter worth $1.2 billion.
In its Q1 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Cloudflare, Inc. was one of them. Here is what the fund said:
“Cloudflare, Inc., another new purchase during the quarter, is a web infrastructure and website security provider. Cloudflare disrupts legacy networking vendors by enabling customers to rent their network solutions in the cloud (and pay for usage) instead of buying firewalls, load balancers and secure web gateway devices. Using a global network in over 100 countries, Cloudflare delivers content and security within 50 milliseconds of 95% of the internet-connected population in the world. Shares contributed 12bps to results on impressive fourth quarter earnings as it continues to successfully layer high-value services such as zero trust, network services, and edge programmability on top of its modern global network. The company is attracting a broader set of investors as Cloudflare now matches durable 50%-plus top-line growth (this was the fifth straight quarter of 50%-plus revenue growth, and 56% current bookings growth suggests strong durability into 2022) with positive operating margins and break-even free cash flow. We believe that Cloudflare will benefit from long-duration of growth disrupting a $100 billion addressable market across application services, network services, and zero-trust services.”
4. IronSource Ltd. (NYSE:IS)
Number of Hedge Fund Holders: 30
Percentage Increase in Stake During Q2 2022: 34%
IronSource Ltd. (NYSE:IS) owns and runs a business platform for app developers and telecom operators. Latest 13F filings show that ARK owned over 516,400 shares of IronSource Ltd. at the end of June 2022, worth $1.4 million.
On August 11, investment advisory Credit Suisse downgraded IronSource Ltd. stock to Neutral from Outperform and lowered the price target to $5.42 from $13. Analyst Stephen Ju issued the ratings update.
At the end of the second quarter of 2022, 30 hedge funds in the database of Insider Monkey held stakes worth $198 million in IronSource Ltd., compared to 36 in the preceding quarter worth $422 million.
3. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 60
Percentage Increase in Stake During Q2 2022: 35%
Shopify Inc. (NYSE:SHOP) provides a commerce platform and related services. The hedge fund chaired by Wood owned close to 1.2 million shares of Shopify Inc. at the end of June 2022 worth $455 million, representing 2.69% of the portfolio.
On August 11, Atlantic Equities analyst Kunaal Malde upgraded Shopify Inc. stock to Overweight from Neutral with a price target of $46, noting the firm was a market leader in product innovation.
At the end of the second quarter of 2022, 60 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Shopify Inc., compared to 72 in the preceding quarter worth $5.7 billion.
In its Q1 2022 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Shopify Inc. was one of them. Here is what the fund said:
“We added to the Portfolio’s position in e-commerce company Shopify Inc. in the first quarter after a sharp share-price decline. This brought the Portfolio’s weighting in the company to 2%. We believe Shopify provides a uniquely positioned platform, and we like the company’s strategy of continuing to invest in its business in an effort to strengthen its competitive advantages. The market’s affinity for businesses like Shopify Inc. may have changed, which created an opportunity for us to build our position in the company at what we believed to be compelling valuations.”
2. Global-e Online Ltd. (NASDAQ:GLBE)
Number of Hedge Fund Holders: 17
Percentage Increase in Stake During Q2 2022: 45%
Global-e Online Ltd. (NASDAQ:GLBE) operates in the cross-border ecommerce industry. The hedge fund of Cathie Wood owned 812,173 shares of Global-e Online Ltd. at the end of the second quarter of 2022 worth more than $15.6 million, representing 0.09% of the total portfolio.
On August 17, Morgan Stanley analyst James Faucette maintained an Overweight rating on Global-e Online Ltd. stock and raised the price target to $51 from $34, backing the firm to continue strong progress into next year.
At the end of the second quarter of 2022, 17 hedge funds in the database of Insider Monkey held stakes worth $508 million in Global-e Online Ltd., compared to 26 in the previous quarter worth $950 million.
1. Matterport, Inc. (NASDAQ:MTTR)
Number of Hedge Fund Holders: 7
Percentage Increase in Stake During Q2 2022: 95%
Matterport, Inc. (NASDAQ:MTTR) is a spatial data company based in California. ARK Investment Management owned 1 million shares in Matterport, Inc. at the end of June 2022 worth $5.6 million, representing 0.03% of the portfolio of the fund.
On August 16, Wolfe Research analyst Gal Munda initiated coverage of Matterport, Inc. stock with a Peer Perform rating, noting the firm produced best-in-class reality capture software for a number of industries.
At the end of the second quarter of 2022, 7 hedge funds in the database of Insider Monkey held stakes worth $22 million in Matterport, Inc., compared to 12 in the previous quarter worth $52 million.
In its Q4 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Matterport, Inc. (NASDAQ:MTTR) was one of them. Here is what the fund said:
“Matterport Inc. (MTTR) continued to be a strong contributor during the quarter after Matterport’s ability to contribute to the building of the metaverse was brought to light. The company reported 3Q results that missed consensus due to unexpected supply constraints and labor shortage in its capture services. The company reported total sales of $27.7M below consensus of $29.1M but with gross profit beating coming in at $15.2M versus $15.1M expected leading to an EPS loss of -$0.06 slightly better than consensus of -$0.07. The company lowered full-year revenue guidance to $107-110M down from $120-126M previously while also lowering FY22 topline guidance to 50% growth from 65% at the time of the PIPE transaction due to continuing supply constraints and labor shortage.”
You can also take a peek at 10 Penny Stocks Redditors are Buying in August and 10 Best Nickel Stocks to Buy Now.
Follow Insider Monkey on Twitter
Suggested Articles:
- Reddit’s WallStreetBets is Buying these 10 Stocks for Post-Earnings Gains
- 10 Stocks Reddit’s WallStreetBets is Buying Before Earnings
- 10 Best High Short Interest Stocks to Buy Now
This article is originally published at Insider Monkey.
