- Buy these large-cap growth plays being accumulated by Ark Invest at hugely attractive discounts.
- Coinbase Global (COIN): is getting hit on an earnings miss into channel support.
- Block (SQ): can be smartly bought with a partially hedged SQ stock strategy.
- Roku (ROKU): may have more downside, but this Cathie Wood stock is ready for a collar.
The sky may not be falling, but in the markets nowhere is that aggravated sensation more apparent than in Cathie Wood’s former wunderkind: Ark Invest ETFs. But rather than buy into that costly fear and sell, it’s time to make a smarter money purchase in select Cathie Wood stocks today.
Ark Invest ETFs, the actively-managed growth portfolios have gone from first-to-worst since the onset of the pandemic to this year’s more fractured reality dividing a challenged Main Street and an on-tilt, overly-fearful Wall Street where barely a risk asset has been spared, let alone Cathie Wood stocks.
Compared to the S&P 500 which is down 16% from its January all-time-high Cathie’s flagship Ark Innovation ETF (NYSEARCA:ARKK) has retraced a stunning 95% of its market smashing rally which last February was up nearly 400% from March 2020’s bear market bottom.
And right now that means a more certain smart money opportunity exists to purchase three market-leading, crashed Cathie Wood stocks which Ark Invest is still aggressively accumulating, which you can buy for pennies on the dollar and call your own.
Coinbase Global (COIN)
Coinbase Global (NASDAQ:COIN) is the first of our Cathie Wood stocks to buy. North America’s largest digital currency platform has been a drag on Ark’s portfolios. Combined, the fund manager owns more than $510 million and making the position its 8th largest overall.
The cost average on this Cathie Wood stock is north of $255. But rather than fear it’s errored, Ark has been buying more. This week alone the fund accumulated more than 71,000 shares.
Today, this Cathie stock is down another 24% after posting weaker and worse-than-expected sales and users on the back of a crashing crypto market.
I suspect while others on Wall Street are warning and fleeing the scene, COIN stock will continue to be accumulated by Ark Invest. Right now investors can buy this oversold Cathie Wood stock at all-time-lows as shares test monthly channel support.
Given this market leader may be a giant in a space which never lives up to the hype, buying this Cathie stock is more of a binary proposition, accumulating on further weakness could be downright foolhardy. As much and given Ark’s last known purchases in the $70s, a longer-term 2023 June $75/$95 is a favored smarter money buy.
Block (NYSE:SQ) is the next of our Cathie Wood stocks to buy today at a bigly discount. One of the world’s leading fintech’s SQ stock is another big-time holding and massive drag for Ark Invest since peaking last summer.
This Cathie stock is Ark’s fifth largest position and held in three of its ETFs. Ark’s cost average ranges from around $122 to almost $214 with a current market value of nearly $680 million. Through Monday’s close the outfit added another 35,000 SQ shares to their overall holdings.
Today, shares SQ are down another 10%. That puts April’s and May’s combined plunge at 50% and at two year lows. For investors keen for upcoming stock splits like Amazon (NASDAQ:AMZN) or Alphabet (NASDAQ:GOOG), today you can have a natural 2-for-1 proposition in this Cathie Wood stock.
What’s more and technically, this oversold fintech’s shares are testing their lifetime 76% retracement level and monthly trend support, through its Bollinger band and back inside March 2020’s candlestick.
This profitable Cathie Stock might go lower, but unlike COIN, that would likely offer investors other than Ark, a reason to buy more too.
Accordingly, a partially hedged, “modified” collar which buys a protective put spread and sells an out-of-the-money call to finance the operation in conjunction with SQ stock is a favored and readily available strategy.
Roku (NASDAQ:ROKU) is the last of our Cathie Wood stocks to buy alongside Ark Invest.
In many ways ROKU looks a lot like SQ stock. It’s a market leader, profitable and still growing. Also, the battered shares which have lost 84% since last summer are making nearly everyone think twice about buying more. Not Cathie though.
The streaming video giant is also another name which Ark Invest continues to buy. ROKU stock is the fund manager’s third largest holding with an estimated 7.25% of Roku shares owned split between two of its ETFs.
Cathie & Co.’s commitment amounts to a cost average centered around $250 a share compared to today’s bludgeoned ROKU stock price of about $80.50. But Ark Invest is busy trying to improve that cost basis and most recently purchased another 50,600 shares on Monday.
Technically, shares appear slightly less oversold than SQ stock and the next logical support area, in an irrational market of course, is down near $60. Give or take a few bucks of shareholder value, that’s where a full-blown test of 2020’s low, Bollinger and an extended lifetime trendline would come into play.
For positioning alongside, but having slightly smaller kahunas than Ark Invest, a fully-hedged and actively-managed collar in this Cathie Wood stock is how ROKU stock looks like a smarter money purchase.
On the date of publication, Chris Tyler holds long positions (either directly or indirectly) in Ark Genomics Revolution ETF (ARKG). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.