Shares of Cathie Wood’s flagship exchange-traded fund (ETF), the ARK Innovation ETF (NYSEARCA:ARKK), finished the week in the green, driven by gains in high-growth names and the overall market. However, two major catalysts loom on the horizon.
The Fed is set to meet on Sept. 20-21 to decide on the next interest rate hike. U.S. equity swaps are currently pricing in an 80% chance of a 75 basis points (bps) raise. Since March, the Fed has raised interest rates two times; rates were raised by 75 bps in each of the last two meetings. Ahead of that is the monthly consumer price index (RPI) report, which will be disclosed on Sept. 13. The outcome of the report will likely influence the Fed’s decision on raising rates. Wood carries several high-growth names in her portfolio, which are highly susceptible to rate hikes. That’s because higher rates have the effect of discounting future free cash flows back to the present value at lower values.
With that in mind, let’s take a look at the top five Cathie Wood stocks that she purchased this week.
5 Stocks Cathie Wood Bought This Week
1. DraftKings (DKNG)
First up on the list is DraftKings (NASDAQ:DKNG). Between Sept. 6 and Sept. 9, Wood purchased 224,275 shares of DKNG stock.
Investors have reason to be optimistic about the sports gambling company following the start of the NFL season on Sept. 8. According to Barron’s, about 47 million people plan to place bets on NFL games this season, representing 18% of the U.S. adult population. Meanwhile, the NBA season is set to kick off on Oct. 18.
During June and July, DraftKings boasted a 27% share of the online sports betting market, the second largest market share behind FanDuel. DKNG has an average price target of $26.37 among 26 firms with coverage of the stock, implying an upside of about 50%.
2. UiPath (PATH)
UiPath (NYSE:PATH) operates as a software company with a focus in robotic process automation (RPA). The company’s technology seeks to streamline workflows and automate daily tasks, such as accounts payable and claims processing. However, shares of PATH plummeted by as much as 20% after the company reported its second-quarter earnings on Sept. 6.
For the quarter, revenue tallied in at $242.2 million, up 24% year-over-year (YOY). Its earnings per share (EPS) was a loss of two cents, while analysts were expecting a loss of 11 cents. The major factor behind the earnings decline seems to be guidance. For the third quarter, UiPath forecasts revenue between $243 million and $245 million. Analysts were expecting guidance of $269.5 million.
The lower-than-expected guidance didn’t seem to faze Wood, as she purchased 4.9 million shares this week. The majority of the shares were purchased after UiPath reported earnings.
3. Unity (U)
Unity (NYSE:U) is a video game software company that provides solutions to create and monetize 2D and 3D content for a variety of electronic devices. Shares of U stock peaked as high as $210 in the past year on speculation surrounding metaverse-related stocks. Today, shares are trading in the low $40 range. However, the metaverse isn’t the only industry that is applicable to Unity.
In August, the company announced that it had signed its largest contract yet with CACI International (NYSE:CACI). CACI works closely with the U.S. government and has provided it with aerial surveillance and other services. The three-year “multi-million dollar partnership” will see Unity help CACI with “defining human machine interfaces or HMI for aerospace applications.”
Between Sept. 6 and Sept. 9, the ARK Next Generation ETF (NYSEARCA:ARKW) scooped up 52,284 shares of U stock. After the purchases, Unity is now the 13th largest holding in the ETF out of 35 total.
4. Ginkgo Bioworks (DNA)
A biotech favorite of Wood, and frequent name on lists of Cathie Wood stocks, shares of Ginkgo Bioworks (NYSE:DNA) stock have plummeted by over 60% this year. Ginkgo’s top focus is to use genetic engineering to produce bacteria for use in a plethora of industries, such as agriculture, biotech, and marijuana.
Earlier this month, the company brought on Behzad Mahdavi as senior vice president of biopharma manufacturing and life sciences tools. As VP, Mahdavi will lead the efforts in “bio-reagents, cell and gene therapies and new biopharmaceutical modalities.” Mahdavi added:
There are a tremendous number of opportunities in this space, and I joined Ginkgo because I believe this company is the partner of choice that the industry needs to realize those boundless opportunities.
On Sept. 6, ARKK and the ARK Genomic Revolution ETF (BATS:ARKG) purchased a total of 460,959 shares of DNA. Ark Invest has so far purchased a total of 4.06 million shares this month.
5. Teladoc (TDOC)
Teladoc (NYSE:TDOC) remains a high conviction position for Wood, despite a more than 60% drawdown this year. The telehealth company was a major beneficiary of the Covid-19 pandemic, as patients opted for in-home virtual visits instead of in-person visits. In addition, the pandemic also caused speculative investors to flock to TDOC, bringing the price to as high as $293. Now, another catalyst may send Teladoc higher.
Everyone is talking about monkeypox. The average symptoms of the virus are significantly more painful than when compared to Covid-19. But on the whole, monkeypox is less lethal and contagious than Covid. However, in the event of a lockdown due to monkeypox, shares of TDOC could potentially soar higher. Yesterday, health officials reported that a Los Angeles resident had died after contracting the disease, marking the second U.S. death related to the virus. As of Sept. 8, there are 21,504 confirmed cases of monkeypox in the U.S., with California leading the way at 4,140 cases.
Between Sept. 6 and Sept. 7, ARKK purchased 74,612 shares of TDOC, bringing Ark Invest’s combined holdings of the company to 19.45 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.
