In this article, we discuss 10 stocks under $10 in Cathie Wood’s latest portfolio.
Growth investors like Cathie Wood of ARK Investment Management have not had a good start to the year. The fortunes of ARK Innovation ETF, the flagship fund offered by the hedge fund, have slid dramatically since the beginning of 2022 as inflation rises and the Fed increases interest rates to keep soaring prices under control, pushing investors away from risky offerings. Since January 2022, ARK Innovation ETF has fallen by 56%, with 10% of this decline coming in a single day last week. Wood seems unfazed by the drop.
The famous investor, who was one of the best-performing hedge fund managers of the pandemic-ravaged 2020, has doubled down on her bets on growth stocks like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX) in the past few months, using the phrase “deep value territory” to justify her buying spree. The inflows into her fund have also continued to grow. So far in 2022, the net inflows into her fund stand at around $1.5 billion despite the fact that the short interest on it is near 15%.
Nate Geraci, the president of The ETF Store, an advisory firm, told Bloomberg on May 14 that the decision of Wood to stick with disruptive tech during this turmoil would ultimately end up improving the “long-term visibility” of her fund. Geraci termed the decision “attractive to a certain segment of investors”. The portfolio value of her hedge fund has fallen by about $10 billion in the last three months. During these months, Wood has been busy buying up stocks at bargain prices, some of which are cheaper than $10 per share.
Our Methodology
These were listed according to the investment portfolio of ARK Investment Management at the end of the first quarter of 2022. Only equities which were trading at below $10 per share, as of May 16, 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 Q4 2021 was used to quantify the popularity of each stock in the hedge fund universe.
Cathie Wood of ARK Investment Management
Cathie Wood’s Latest Portfolio: Stocks Under $10
10. Pearson plc (NYSE:PSO)
Number of Hedge Fund Holders: 8
Share Price as of May 16: $9.17
Pearson plc (NYSE:PSO) provides educational services. Latest data shows that ARK owned 18,119 shares of Pearson plc (NYSE:PSO) at the end of the first quarter of 2022, worth $181,000. The stock has slid in the past few weeks after investment firm Apollo abandoned a takeover bid worth $9.5 billion after Pearson rejected the offer. The offer was the third and final one that Apollo was prepared to make for the education company. Pearson believes the offer “undervalues” the future potential of the firm.
On April 10, Goldman Sachs analyst Lisa Yang reinstated coverage of Pearson plc (NYSE:PSO) stock with a Buy rating and a price target of GBP 984, noting that the higher education business of the firm was set to inflect positive growth in 2022.
At the end of the fourth quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $22 million in Pearson plc (NYSE:PSO), the same as in the preceding quarter worth $15 million.
Just like Tesla, Inc., Sea Limited, and Roblox Corporation, Pearson plc (NYSE:PSO) is one of the stocks on the radar of elite investors.
9. Natura & Co Holding S.A. (NYSE:NTCO)
Number of Hedge Fund Holders: 9
Share Price as of May 16: $6.96
Natura & Co Holding S.A. makes and sells cosmetics, fragrances, and personal hygiene products. Securities filings show that ARK owned 16,716 shares of Natura & Co Holding S.A. at the end of March 2022 worth $186,000. The fund slashed its stake in the firm by 21% in the first quarter of 2022 compared to filings for the fourth quarter of 2021. ARK had first purchased a stake in the company during the fourth quarter of 2021 comprising over 21,000 shares bought at an average price of $12.20 per share.
On March 9, JPMorgan analyst Jos Giordano upgraded Natura & Co Holding S.A. stock to Neutral from Underweight with a price target of $10, noting that the valuation of the stock already reflected risks around execution and concerns on sales.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Natura & Co Holding S.A., with 961,237 shares worth more than $10 million.
At the end of the fourth quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $21 million in Natura & Co Holding S.A., up from 6 in the preceding quarter worth $46 million.
8. PyroGenesis Canada Inc. (NASDAQ:PYR)
Number of Hedge Fund Holders: 4
Share Price as of May 16: $1.85
PyroGenesis Canada Inc. (NASDAQ:PYR) develops plasma processes and systems. Regulatory filings reveal that ARK owned 134,107 shares of PyroGenesis Canada Inc. at the end of the first quarter of 2022, worth $336,000. The fund increased its stake in the firm by 18% in early 2022 compared to fourth quarter filings for 2021. PyroGenesis has been a constant feature in the ARK portfolio since the first quarter of 2021. The fund reduced its stake in the firm in two of the last four quarters.
In early February, PyroGenesis Canada Inc. announced that it had signed an agreement for a purchase order for the first of three 10,000 TPY Drosrite systems. The deal is estimated to be worth $3 million.
At the end of the fourth quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $651,000 in PyroGenesis Canada Inc., up from 1 in the previous quarter worth $473,000.
7. Eastman Kodak Company (NYSE:KODK)
Number of Hedge Fund Holders: 10
Share Price as of May 16: $4.29
Eastman Kodak Company (NYSE:KODK) operates as a technology company. Latest 13F filings show that ARK owned over 81,536 shares of Eastman Kodak Company at the end of March 2022, worth $534,000. The fund increased its stake in the firm by 29% in the first three months of 2022 compared to the filings for the fourth quarter of 2021. The company has featured in the ARK portfolio, with minor exceptions, since late 2016. ARK has added to the holding in the last two quarters.
Eastman Kodak Company stock has nosedived in recent weeks, falling to near 52-week lows, as supply chain problems affect the earnings of the firm. However, despite the challenges, the company posted a 9% year-on-year increase in revenue in the Q1 2022.
Among the hedge funds being tracked by Insider Monkey, Atlanta-based investment firm GMT Capital is a leading shareholder in Eastman Kodak Company, with 981,400 shares worth more than $6.4 million.
At the end of the fourth quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $11 million in Eastman Kodak Company, compared to 11 in the preceding quarter worth $32 million.
In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Eastman Kodak Company was one of them. Here is what the fund said:
“Eastman Kodak Company (-18%, -0.83%; -12%, -0.54%), the global technology company focused on chemicals and print, in which we own convertible preferreds, was a detractor, despite excellent operating results at Eastman Kodak Company. Our appraisal of Kodak’s value surged 12% last quarter up to $10/share due to strong pricing in the printing plates and film segments. Kodak’s new chemical-free Sonora plate business grew 35% and is much more environmentally sustainable than the competition. Digital Printing, a razor/razor blades annuity business, approached breakeven, while Kodak’s next generation Prosper product line grew 17%. The Licensing segment, which is a surprisingly large part of appraised value, again grew steadily with massive operating margins.”
6. SomaLogic, Inc. (NASDAQ:SLGC)
Number of Hedge Fund Holders: 37
Share Price as of May 16: $5.42
SomaLogic, Inc. (NASDAQ:SLGC) is a clinical diagnostics firm. Latest 13F filings show that ARK owned 300,000 shares of SomaLogic, Inc. at the end of March 2022, worth $642,000. The company has a diverse pipeline of drugs tied to the protein platform it markets. This platform allows for the study and engineering of different proteins. As other firms use this platform to conduct their research, they can grow revenue while keeping overall costs low, a rare combination in the biotech sector.
On April 13, Canaccord analyst Kyle Mikson maintained a Buy rating on SomaLogic, Inc. stock and lowered the price target to $15 from $19, underlining the growth potential of the firm that was not reflected in current levels.
At the end of the fourth quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $630 million in SomaLogic, Inc., the same as in the previous quarter worth $647 million.
In addition to Tesla, Inc., Sea Limited, and Roblox Corporation, SomaLogic, Inc. is one of the stocks that hedge funds are buying.
5. Organovo Holdings, Inc. (NASDAQ:ONVO)
Number of Hedge Fund Holders: 4
Share Price as of May 16: $2.55
Organovo Holdings, Inc. (NASDAQ:ONVO) is a biotech firm based in California. Latest 13F filings show that ARK owned 306,108 shares of Organovo Holdings, Inc. at the end of March 2022, worth $1.1 million. The fund decreased its stake in the company by 8% in the first quarter of 2022 compared to filings for the fourth quarter of 2021. The firm has featured in the ARK portfolio since the third quarter of 2020. ARK has been dumping the stock gradually every quarter since then.
On February 23, Organovo Holdings, Inc. announced that it had reached an agreement with BICO, a biotech firm, to use the technology of the latter in the foundational patent portfolio of 3D bioprinting.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Organovo Holdings, Inc., with 158,801 shares worth more than $1.1 million.
4. IronSource Ltd. (NYSE:IS)
Number of Hedge Fund Holders: 24
Share Price as of May 16: $2.80
IronSource Ltd. (NYSE:IS) owns and runs a business platform for app developers and telecom operators. Latest 13F filings show that ARK owned over 388,040 shares of IronSource Ltd. at the end of March 2022, worth $1.8 million. In earnings results for the first quarter of 2022, IronSource beat market expectations on revenue by over $6 million. Tomer Bar-Zeev, the CEO of the firm, said during the earnings call that the company was one of the few software entities that grew revenue by 55%, while keeping margins at over 30% in the past months.
On May 13, Needham analyst Bernie McTernan maintained a Buy rating on IronSource Ltd. stock and lowered the price target to $6 from $10, noting the weakened guidance of the firm but affirming that it was a “leading game-tech operator in in-app gaming ads”.
At the end of the fourth quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $457 million in IronSource Ltd., compared to 29 in the preceding quarter worth $726 million.
3. Allot Ltd. (NASDAQ:ALLT)
Number of Hedge Fund Holders: 14
Share Price as of May 16: $5.27
Allot Ltd. (NASDAQ:ALLT) provides network intelligence and security solutions. Regulatory filings reveal that ARK owned 252,341 shares of Allot Ltd. at the end of the first quarter of 2022, worth $2 million. The fund increased its stake in the firm by 23% in the first three months of 2022 compared to filings for the fourth quarter of 2021. The firm has been a consistent feature in the ARK portfolio since the second quarter of 2019. Over the last three quarters, ARK has been loading up on the stock.
In mid-February, Lake Street analyst Eric Martinuzzi maintained a Buy rating on Allot Ltd. stock but lowered the price target to $13 from $16, lowering the profit and revenue forecasts for the firm in 2022 as well.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Allot Ltd., with 1.2 million shares worth more than $10 million.
2. RedHill Biopharma Ltd. (NASDAQ:RDHL)
Number of Hedge Fund Holders: 4
Share Price as of May 16: $1.02
RedHill Biopharma Ltd. (NASDAQ:RDHL) is a biopharma firm that focuses on the development of medicines for gastrointestinal and infectious diseases. Securities filings show that ARK owned 861,798 shares of RedHill Biopharma Ltd. at the end of March 2022, worth $2.1 million. The company is a new addition to the portfolio compared to filings for the fourth quarter of 2021. However, the firm has featured in the ARK portfolio, with a minor exception in late 2021, since early 2018.
On March 15, RedHill Biopharma Ltd. announced that it had inked an exclusive license agreement with Kukbo, a Seoul-based conglomerate, for the commercialization of oral opaganib, a drug for the treatment of COVID-19.
At the end of the fourth quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $965,000 in RedHill Biopharma Ltd., up from 3 in the preceding quarter worth $443,000.
1. Taboola.com Ltd. (NASDAQ:TBLA)
Number of Hedge Fund Holders: 25
Share Price as of May 16: $3.35
Taboola.com Ltd. (NASDAQ:TBLA) owns and runs an artificial intelligence-based algorithmic engine platform. Latest data shows that ARK owned 423,119 shares of Taboola.com Ltd. at the end of the first quarter of 2022, worth $2.1 million. The firm is a new addition to the portfolio compared to fourth quarter filings. Taboola recently posted earnings for the first quarter of 2022, beating market expectations on earnings per share by $0.025 and reporting a 17% year-on-year increase in revenue.
On March 31, Susquehanna analyst Shyam Patil maintained a Positive rating on Taboola.com Ltd. stock with a price target of $10, noting that new engagement initiatives of the firm would provide fuel for growth in the coming months.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Taboola.com Ltd., with 423,119 shares worth more than $2.1 million.
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This article is originally published at Insider Monkey.
