The 5 Top Stocks Cathie Wood Is Buying Now

  • Cathie Wood believes deflation will be a greater risk than inflation in the coming months.
  • Companies recently purchased by Ark Invest include Invitae (NVTA) and Teladoc (TDOC).
  • Shares of Wood's flagship fund, the ARK Innovation ETF (ARKK), are down more than 40% year-to-date.
Cathie Wood Stocks - The 5 Top Stocks Cathie Wood Is Buying Now

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Cathie Wood’s Ark Invest has performed well recently, with shares of her flagship exchange-traded fund (ETF), the ARK Innovation ETF (NYSEMKT:ARKK), up more than 15% during the past month. The performance was driven by the release of July’s consumer price index (CPI) report. The report revealed that inflation rose by 0% month-over-month (MOM) and by 8.5% year-over-year (YOY). Meanwhile, economists were expecting a YOY increase of 8.7% and a MOM increase of 0.2%.

Wood expects further decreases in inflation. The Ark Founder explained, “We will be talking about deflation being a greater risk in the next three to six months. Innovation results in deflation. One of the metrics that have been very telling .. is long term Treasury yields… The bond market is expecting growth to surprise on the low side.”

She cited the 10-year Treasury yield’s difficulty in staying above 3% as a sign that current rates of inflation are unsustainable. In addition, she believes that falling gas prices are a sign that prices may be easing.

So, what has Ark been buying?

5 Cathie Wood Stocks Ark Is Buying Now

1. Invitae (NVTA)

Invitae (NYSE:NVTA) has experienced volatile price action since reporting its Q2 earnings on Aug. 9. The following day, shares of NVTA closed higher by a mind-boggling 238%. The genetics testing company posted revenue of $136.6 million, up more than 17% year-over-year. But it still fell short of estimates by just 0.62%. On the other hand, earnings per share came in at loss of 68 cents, beating the estimate for a loss of 74 cents.

The company’s earnings report did not seem substantial enough to sustain a 238% gain, which had investors speculating that a short squeeze was taking place. As of July 31, 23.1% of the public float was sold short, equating to a monetary volume of $98.38 million. The high short interest was significant enough to drive a short squeeze, paired with investors bidding up the price.

Wood reported purchasing NVTA the day prior to its earnings report. On Aug. 8, ARKK scooped up 186,884 shares, while the ARK Genomic Revolution ETF (BATS:ARKG) picked up 626,059 shares. After the purchases, Invitae is now the 45th largest holding among all ARK ETFs out of 51 total.

2. Teladoc (TDOC)

Ark has now purchased shares of Teladoc (NYSE:TDOC) for three consecutive weeks. From Aug. 8 to Aug. 11, 445,481 shares were purchased through four ARK ETFs, including — oddly enough — the ARK Fintech Innovation ETF (NYSEMKT:ARKF). After the purchases, Ark owns a total of 30.6 million shares, making it the largest shareholder by a wide margin.

Shares of TDOC stock have fallen lower by more than 50% year-to-date, offering a discount opportunity for Ark. On Aug. 11, DA Davidson initiated coverage of the company with a $45 price target. Analyst Robert Simmons characterized the company as a leader in the telehealth space with a variety of offerings. Shares have fallen by more than 85% from the high of $308, although Simmons believes this is an “over-correction.” The analyst adds that the current rate of revenue and free cash flow margin growth should provide significant upside.

3. Roblox (RBLX)

On Aug. 10, Ark purchased 44,048 shares of Roblox (NYSE:RBLX) through two of its ETFs. This was Ark’s first purchase of RBLX since June 9. Ark purchased shares after the metaverse company reported Q2 earnings on Aug. 9, causing shares to plunge lower by more than 10%. Revenue tallied in at $639.9 million, falling short of the analyst estimate of $644.4 million. Earnings per share fell short as well, coming in at a loss of 30 cents versus the expectation for a loss of 21 cents. The EPS figure equated to a net loss of $176.4 million.

Meanwhile, average daily active users (DAUs) clocked in at 52.2 million, coming in below the analyst estimate by about a million users. During Q1, the company reported 54.1 million average DAUs. Despite the misses on several metrics, RBLX stock has since recovered all of the losses attributed to its earnings report, leading investors to believe that the worst may have already been priced in.

4. Markforged (MKFG)

Wood has now purchased shares of Markforged (NYSE:MKFG) for two consecutive weeks, even after the company reported its earnings on Aug. 11. The company operates as a 3D printing and materials provider.

Revenue rose by 19% YOY to $24.2 million, while net profit rose to $4.1 million, up from a net loss of $11.1 million a year ago. On the other hand, gross margin declined to 53% from 58% a year ago. CEO Shai Terem added:

“We continue to make great strides in executing on our strategy thanks to great efforts from our talented team. We feel very confident in our long-term opportunity to extend our leadership position in distributed manufacturing as our product portfolio grows and evolves.”

From Aug. 8 to Aug. 12, two ARK ETFs purchased 575,458 shares of MKFG. The largest purchase within that period occurred after earnings on Aug. 12, when 396,856 shares were purchased in a single day. In the month of August, Ark has purchased MKFG on 18 separate occasions.

5. Fate Therapeutics (FATE)

From Aug. 11 to Aug. 12, two ARK ETFs purchased 632,542 shares of Fate Therapeutics (NASDAQ:FATE). Interestingly enough, it appears that Wood may have had a quick change of heart, as ARKK sold 307,711 shares on Aug. 8. The recent purchases were the company’s first purchases of FATE since Feb. 25.

Fate operates as a clinical stage biotechnology company that utilizes cellular immunotherapies to treat patients with cancer and immune disorders. During Q2, the company reported revenue of $18.5 million, up 38% YOY. Fate also announced an expanded collaboration with Ono Pharmaceutical (OTCMKTS:OPHLY) to advance its second solid tumor program.

While the company remains unprofitable, it still has seven proprietary cell therapy candidates in its product pipeline. Wood’s recent purchases may be a stamp of conviction for the potential of Fate’s pipeline.

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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.


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