In this article, we will be taking a look at the top 5 from Cathie Wood’s Q2 portfolio. To read our detailed analysis of her top 6-12 stocks as well as Wood’s investment history and strategy, you can go directly to the Top 12 From Cathie Wood’s Q2 Portfolio.
5. EXACT Sciences Corporation (NASDAQ:EXAS)
ARK Investment’s Stake Value: $745,744,000
Percentage of ARK Investment’s 13F Portfolio: 4.41%
Number of Hedge Fund Holders: 28
EXACT Sciences Corporation (NASDAQ:EXAS) is a biotech company providing cancer screening and diagnostic test products. The company operates in the U.S. and internationally.
An ‘Outperform’ rating was reiterated on EXACT Sciences Corporation (NASDAQ:EXAS) shares on August 28, by Dan Leonard at Credit Suisse. The analyst also has a $55 price target on the stock.
During the second quarter, EXACT Sciences Corporation (NASDAQ:EXAS) had an EPS loss of $0.94, beating estimates by $0.13. The company’s revenue was $522 million, also beating estimates by $25.5 million.
Out of 895 hedge funds tracked that filed 13Fs for the second quarter, 28 funds were long EXACT Sciences Corporation (NASDAQ:EXAS) with a total stake value of $1.1 billion.
RiverPark Funds, an investment management firm, mentioned EXACT Sciences Corporation (NASDAQ:EXAS) in its third quarter 2021 investor letter. Here’s what the firm said:
“Exact Sciences: EXAS shares declined on a disappointing recovery in Cologuard screening due to COVID. Despite continued revenue growth from Precision Oncology and COVID testing, and Cologuard screening revenue growth of 30%, COVID restrictions limited access to physicians’ offices for the company’s and its Pfizer Joint Venture sales force as well as causing a severe drop off of in-person wellness visits.
In the last year, Exact has also pivoted the company significantly from its single cancer screening tests (Cologuard for colon cancer and Oncotype for breast cancer) to multi-cancer screening through its Thrive acquisition, and to minimal residual disease and recurrence monitoring through its Ashion and Tardis acquisitions. Through this pivot, Exact has tripled its market opportunity from $20 billion to $60 billion.”
4. Block, Inc. (NYSE:SQ)
ARK Investment’s Stake Value: $799,455,000
Percentage of ARK Investment’s 13F Portfolio: 4.72%
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) is an IT company working to create tools that enable sellers to accept card payments. The company also offers reporting and analytics, alongside next-day settlement services.
Mizuho’s Dan Dolev reiterated a ‘Buy’ rating on Block, Inc. (NYSE:SQ) shares on August 8 and has a $135 price target on the stock.
The company’s second quarter EPS was $0.18, beating estimates by $0.01. Block, Inc. (NYSE:SQ) had revenue of $4.4 billion, also beating estimates by $69.5 million. Over the next three-to-five years, the company’s EPS is expected to grow by 12.5%.
There were 72 hedge funds long Block, Inc. (NYSE:SQ) in the second quarter, and 84 hedge funds long the stock in the previous quarter. Their total stake values were $3.5 billion and $6.2 billion respectively.
3۔ Roku, Inc. (NASDAQ:ROKU)
ARK Investment’s Stake Value: $962,719,000
Percentage of ARK Investment’s 13F Portfolio: 5.69%
Number of Hedge Fund Holders: 34
Roku, Inc. (NASDAQ:ROKU) is a TV streaming platform operator. The company operates through its Platform and Player segments.
Matthew Thornton at Truist holds a ‘Buy’ rating on Roku, Inc. (NASDAQ:ROKU) shares as of August 28. The analyst also holds a $90 price target on the stock.
At the start of August, Roku, Inc. (NASDAQ:ROKU) was among the communication stocks on the upside among various S&P 500 sectors. The company rebounded in the first week of August with a 25.6% gain.
Roku, Inc. (NASDAQ:ROKU) was in 34 hedge funds’ portfolios in the second quarter, with their total stake value being $1.4 billion.
2. Zoom Video Communications, Inc. (NASDAQ:ZM)
ARK Investment’s Stake Value: $1,028,943,000
Percentage of ARK Investment’s 13F Portfolio: 6.08%
Number of Hedge Fund Holders: 44
Zoom Video Communications, Inc. (NASDAQ:ZM) is an application software company providing a unified communications platform. The company offers its products and services in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.
A ‘Buy’ rating was noted on Zoom Video Communications, Inc. (NASDAQ:ZM) on August 28 by analyst Catharine Trebnick at MKM Partners. The analyst also placed a $125 price target on the stock.
Zoom Video Communications, Inc. (NASDAQ:ZM) had EPS of $1.05 in the second quarter of 2023, beating estimates by $0.11. The company’s revenue was $1.1 billion, up 7.6% year-over-year. Over the next three-to-five years, Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS is expected to rise by 14%.
Our hedge fund data shows 44 hedge funds long Zoom Video Communications, Inc. (NASDAQ:ZM) in the second quarter. Their total stake value was $2.9 billion.
Horos Asset Management, an investment management firm, mentioned Zoom Video Communications, Inc. (NASDAQ:ZM) in its first quarter 2022 investor letter. Here’s what the firm said:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Here we can distinguish three major groups. First, those companies without earnings that had convinced investors of their great future growth prospects, pushing up their valuations to irrational levels. A clear example of this, which we mentioned almost two years ago (see here) is Zoom Video Communications (“Zoom”), whose market cap exceeded that of companies such as IBM or came close to that of Cisco Systems. Well, from the time we wrote about this odd situation until today, Zoom shares have collapsed nearly 80%.
Therefore, if interest rates rise (or are expected to rise), company valuations are negatively impacted. This is especially true for those businesses that generate little cash today and the market expects them to generate a lot of cash in the future. Hence the severe losses in companies that promised a lot of cash generation in the future (such as Zoom).”
1. Tesla, Inc. (NASDAQ:TSLA)
ARK Investment’s Stake Value: $1,094,679,000
Percentage of ARK Investment’s 13F Portfolio: 6.47%
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturing company. It manufactures EVs and energy generation and storage systems for the U.S., China, and international markets.
Philippe Houchois at Jefferies holds a ‘Buy’ rating on Tesla, Inc. (NASDAQ:TSLA) shares as of August 26. The analyst also adjusted his price target on the stock to $350.
In the second quarter, Tesla, Inc. (NASDAQ:TSLA) had EPS of $0.76, beating estimates by $0.16. The company’s revenue was $16.9 billion, essentially in line with estimates. Tesla, Inc.’s (NASDAQ:TSLA) EPS is expected to grow by about 44.6% over the next three-to-five years.
Tesla, Inc. (NASDAQ:TSLA) was found in the 13F portfolios of 72 of the hedge funds tracked by Insider Monkey as of June 30, with their total stake value amounting to $7.2 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what it said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
- First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
- second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
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