Cathie Wood Portfolio: 10 Biggest Losers

In this article, we discuss the 10 biggest losers in the stock portfolio of Cathie Wood. If you want to skip our detailed analysis of these stocks, go directly to Cathie Wood Portfolio: 5 Biggest Losers.

Cathie Wood, the chief of ARK Investment Management, was one of the standout investors of 2020. Her flagship ARK Innovation ETF returned 152% to investors last year and Wood was hailed as the leader of the tech-led disruption at the marketplace that was transforming the global economy. So far this year, her fund, which had a portfolio value of $41 billion at the end of the third quarter of 2021, down from $53 billion at the end of the second, has drastically underperformed as inflation fears rise and interest in growth equities declines. 

The sharp drop indicates just how unpredictable the market has become. In the midst of this chaos, ARK Investment Management has actually doubled down on the bets it had made on growth stocks in 2020. Wood recently told news platform CNBC that her fund was testing out a new strategy, referred to as “ARK on steroids”, which involved buying the dip on growth stocks and betting against major stocks in the benchmarks that were being disrupted. Wood said the benchmarks were “filling up with value traps” that catered to short-term oriented shareholders.

Wood believes that innovation will likely pay her fund solid returns in the long-term. In the CNBC interview, she said that disruptive innovation would rise from around 10% of global equity market caps to more than half in the coming years, noting that innovation was priced around $15 trillion in the public global marketplace now, a number that could climb to $200 trillion in the next ten years. The comments of Wood make for interesting reading given that the ARK Innovation ETF is down 15% so far this year, compared to the benchmark S&P 500, which is up 25%. 

Some of the top stocks in the portfolio of ARK Investment Management at the end of September 2021 included Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Teladoc Health, Inc. (NYSE:TDOC), among others discussed in detail below.

Our Methodology

The stocks were picked from the third quarter regulatory filings of ARK Investment Management. The year-to-date losses for each stock are mentioned alongside other details for further clarity. 

The hedge fund sentiment around each stock was calculated using the data of 867 hedge funds tracked by Insider Monkey. 

Cathie Wood Portfolio: 10 Biggest Losers

Cathie Wood of ARK Investment Management

Cathie Wood Portfolio: Biggest Losers

10. Zoom Video Communications, Inc. (NASDAQ:ZM)

Number of Hedge Fund Holders: 56

 

Year-to-Date Decline in Share Price: 38%

Zoom Video Communications, Inc. (NASDAQ:ZM) owns and runs a video communications platform. The stock has slumped in the past few weeks as the company provides guidance numbers for the next fiscal year that shows that user growth for the platform is slowing. 

Latest data shows that ARK Investment Management owned 4.4 million shares of Zoom Video Communications, Inc. (NASDAQ:ZM) at the end of the third quarter of 2021 worth $1.1 billion, representing 2.77% of the portfolio. 

Among the hedge funds being tracked by Insider Monkey, New York-based firm Tiger Global Management LLC is a leading shareholder in Zoom Video Communications, Inc. (NASDAQ:ZM) with 4.7 million shares worth more than $1.2 billion. 

Just like Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Teladoc Health, Inc. (NYSE:TDOC), Zoom Video Communications, Inc. (NASDAQ:ZM) is one of the stocks occupying the attention of elite investors. 

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Zoom Video Communications, Inc. (NASDAQ:ZM) was one of them. Here is what the fund said:

“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in videoconferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”

9. Zillow Group, Inc. (NASDAQ:Z)

Number of Hedge Fund Holders: 67 

 

Year-to-Date Decline in Share Price: 56%

Zillow Group, Inc. (NASDAQ:Z) operates as a digital real estate firm. According to regulatory filings, ARK Investment Management owned 11.2 million shares in the company at the end of September 2021 worth $994 million, representing 2.38% of the portfolio. 

Piper Sandler analyst Thomas Champion recently lowered the price target on Zillow Group, Inc. (NASDAQ:Z) stock to $68 from $78 and kept a Neutral rating on the shares, noting that there were strategic questions remaining with regards to the valuation of the company. 

At the end of the third quarter of 2021, 67 hedge funds in the database of Insider Monkey held stakes worth $4.2 billion in Zillow Group, Inc. (NASDAQ:Z), down from 76 in the preceding quarter worth $5.2 billion. 

In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Zillow Group, Inc. (NASDAQ:Z) was one of them. Here is what the fund said:

“Zillow Group, Inc. operates leading U.S. real estate sites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares fell during the quarter in concert with the broader rotation out of technology-based stocks despite the company’s continued inflection in mortgages revenue, strong profitability in its core business, and a positive real estate outlook as Zillow builds out its iBuying ecosystem. In our view, Zillow is a leader in the large online real estate advertising market with substantial upside from mortgages and Offers, and we remain investors.”

8. Invitae Corporation (NYSE:NVTA)

Number of Hedge Fund Holders: 24  

 

Year-to-Date Decline in Share Price: 56%

Invitae Corporation (NYSE:NVTA) is a medical genetics firm based in California. The stock has suffered after the company missed market estimates on revenue for the third quarter and disclosed that it had received a subpoena from the US government on sponsored testing programs.

The hedge fund of Cathie Wood owned 25.9 million shares of Invitae Corporation (NYSE:NVTA) at the end of the third quarter of 2021 worth more than $736 million, representing 1.76% of the total portfolio. 

At the end of the third quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Invitae Corporation (NYSE:NVTA), down from 31 in the preceding quarter worth $2.1 billion. 

7. Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)

Number of Hedge Fund Holders: 33  

 

Year-to-Date Decline in Share Price: 59%

Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is a clinical-stage biotech firm. ARK Investment Management owned 11.6 million shares in the company at the end of September 2021 worth $287 million, representing 0.68% of the portfolio of the fund. 

Oppenheimer analyst Mark Breidenbach recently lowered the price target on Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) stock to $31 from $38 but kept an Outperform rating on the shares. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Perceptive Advisors is a leading shareholder in Iovance Biotherapeutics, Inc. (NASDAQ: IOVA) with 11.4 million shares worth more than $283 million. 

6. Peloton Interactive, Inc. (NASDAQ:PTON)

Number of Hedge Fund Holders: 62  

 

Year-to-Date Decline in Share Price: 58%

Peloton Interactive, Inc. (NASDAQ:PTON) markets interactive fitness products. At the end of the third quarter of 2021, ARK Investment Management owned 1.7 million shares in the company worth $149 million, representing 0.36% of the portfolio. 

BMO Capital analyst Simeon Siegel has an Underperform rating on Peloton Interactive, Inc. (NASDAQ:PTON) stock with a price target of $45, noting the company was “backpedaling again” with a $1 billion stock offering that it did not need. 

Among the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm Viking Global is a leading shareholder in Peloton Interactive, Inc. (NASDAQ:PTON) with 29 million shares worth more than $1 billion. 

In addition to Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Teladoc Health, Inc. (NYSE:TDOC), Peloton Interactive, Inc. (NASDAQ:PTON) is one of the stocks popular among retail investors.

In its Q2 2021 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Peloton Interactive, Inc. (NASDAQ:PTON) was one of them. Here is what the fund said:

“Peloton Interactive operates a connected fitness platform offering live and on-demand classes allowing users to exercise at home. The firm’s shares were pressured in the quarter after Peloton announced a voluntary recall for both its legacy treadmill (Peloton Tread+) and its newly-launched base model treadmill (Peloton Tread). The issue surrounding the latter is somewhat troubling, as it appears it may be the result of an engineering flaw. This new treadmill offering was expected to be a key growth driver in the second half of 2021, and this development reduces our confidence in Peloton’s product pipeline. Therefore, we sold the stock.”

 

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Disclosure. None. Cathie Wood Portfolio: 10 Biggest Losers is originally published on Insider Monkey.