Shares of UiPath (NYSE:PATH) are in the spotlight after Cathie Wood’s fund, the ARK Innovation (NYSEARCA:ARKK) exchange-traded fund (ETF), disclosed a massive purchase. PATH stock fell more than 25% last Thursday after reporting an unsatisfactory fourth-quarter earnings report. Earnings per share came in at a loss of 12 cents while analysts were expecting a loss of 7 cents. Revenue of $289.7 million beat analyst expectations of $283 million. However, guidance was a major factor as to why PATH stock sank. UiPath reported Q1 revenue guidance of between $223 million and $225 million, which was below the expected figure of $247 million. Despite the weak guidance, Wood and ARKK are buying up shares on the dip.
Cathie Wood Buys PATH Stock
Yesterday, ARKK disclosed that it had purchased 867,331 shares of UiPath. The purchase accounted for 0.16% of ARKK’s portfolio allocation. Overall, PATH stock makes up 3.29% of the ETF’s holdings.
Based on Monday’s closing price of $22.79, the purchase amounted to around $19.8 million. At the time of writing, UiPath is currently ARKK’s 13th-largest holding. In total, the fund owns 4.17% of shares outstanding in the robotics process automation (RPA) company. It should also be noted that ARKK’s cost basis for UiPath is $62.44, so the ETF is currently sitting on a loss.
However, this isn’t the only time that the ETF has recently picked up shares of PATH stock.
On March 31, ARKK reported that it had purchased 1.94 million shares of UiPath. The purchase accounted for 0.33% of ARKK’s portfolio allocation.
In Ark Invest’s weekly commentary, the company stated that it holds “high conviction in UiPath’s ability to integrate Robotic Process Automation (RPA) into many business processes across large enterprises around the world.” With shares trading lower after earnings, Wood is capitalizing on lower-priced shares while maintaining a high conviction.
Who Else Is Betting Big on UiPath?
Tracking institutional ownership allows retail investors to tap into the minds of some of the world’s savviest investment teams. According to WhaleWisdom, which tracks all 13F filers, 317 funds own UiPath as of Q4. This was an increase of 51 funds, or 19%, from the prior quarter. In addition, 112 funds initiated new positions, while 60 funds completely liquidated their position. However, the institutional put/call ratio lies at 1.16, which signals that more funds own put options against UiPath than call options. While a put/call ratio above 1 typically suggests bearish sentiment, investors will be happy to know it dropped from 1.45 in Q3.
With that in mind, let’s take a look at the top five institutional shareholders of the company:
- Daniel Dines, CEO of UiPath: 109.5 million shares.
- Accel Leaders Fund: 38.9 million shares.
- T. Rowe Price (NASDAQ:TROW): 35.6 million shares.
- Vanguard Group: 22.2 million shares.
- Ark Investment Management: 18.4 million shares.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
