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 Cathie Wood Is Selling These 10 Stocks.
5. Zscaler, Inc. (NASDAQ: ZS)
Number of Hedge Fund Holders: 38
Zscaler, Inc. (NASDAQ: ZS) is ranked fifth on our list of 10 stocks Cathie Wood is selling. The firm markets cloud security solutions and operates from California.
On August 23, investment advisory JPM Securities maintained an Outperform rating on Zscaler, Inc. (NASDAQ: ZS) stock and raised the price target to $270 from $240, noting that the firm looked “attractively” valued on a growth-adjusted basis.
Out of the hedge funds being tracked by Insider Monkey, Boston-based investment firm Arrowstreet Capital is a leading shareholder in Zscaler, Inc. (NASDAQ: ZS) with 1.4 million shares worth more than $318 million.
In its Q4 2020 investor letter, Artisan Partners Limited Partnership, an asset management firm, highlighted a few stocks and Zscaler, Inc. (NASDAQ: ZS) was one of them. Here is what the fund said:
“We also exited our investment in Zscaler. Zscaler provides cloudbased Internet security solutions. Cybersecurity remains a top concern for businesses and governments alike as cyberattacks can have devastating financial and reputational consequences. Furthermore, managing the security needs of legacy on-premise applications, a growing number of cloud-based applications (Office 365, Salesforce, etc.) and a remote workforce make operating IT infrastructures increasingly complex. Zscaler’s scalable, cloud-based security platform is a more secure and efficient way to connect users and applications, which eliminates the need for several layers of security (firewalls, VPNs, etc.) developed and built over the last couple of decades. While the pandemic crisis is likely disrupting some areas of Zscaler’s new sales funnel, the company is particularly well-suited to scale and accelerate our market share-gain thesis. Ninety percent of employees are remotely connecting to the enterprise IT network in today’s inverted world, as opposed to prior solutions which are geared to support 10%-20% of workers connecting remotely with the rest connecting from within the walls of a corporate network. Many employees have used traditional VPN connections to log into their networks remotely, but Zscaler’s platform offers a more secure connection without exposing an entire internal network, is easier to configure and is less costly to operate at scale. While the trend toward connecting remote devices over the Internet backbone remains firmly in motion, the stock appreciated over 300% in 2020, quickly outgrowing our small-cap market cap mandate, and we ended our successful campaign.”
