4 Stock Positions Cathie Wood Added to With Size Recently
Renowned investor Cathie Wood’s risky investment bets delivered substantial returns in 2020. She recently added shares of Roblox (RBLX), UiPath (PATH), Robinhood (HOOD), and PagerDuty (PD) to her portfolio because...
Renowned investor Cathie Wood’s risky investment bets delivered substantial returns in 2020. She recently added shares of Roblox (RBLX), UiPath (PATH), Robinhood (HOOD), and PagerDuty (PD) to her portfolio because she expects these stocks to combat current macroeconomic headwinds and deliver double-digit returns over the long run. Read on.
Cathie Wood, the founder of investment management firm Ark Invest, recently bought several stocks that have been underperforming the markets. And yet, her flagship fund ARK Innovation ETF (ARKK) gained 1.1% over the past week. Regarding this, Wood said in an interview, “With a five-year investment time horizon, our forecasts for these platforms suggest that our strategies today could deliver a 30-40% compound annual rate of return during the next five years.”
Wood believes these companies possess immense growth potential and will combat current market headwinds and capitalize on the industry’s tailwinds in the long run.
Roblox Corporation (RBLX)
RBLX develops and operates an online entertainment platform internationally. The San Mateo, Calif-based concern offers Roblox Client, an application that allows users to explore 3D digital worlds, Roblox Studio, a toolset that enables developers and creators to build, publish, and operate 3D experiences and other content, and Roblox Cloud, a solution that provides services and infrastructure to power the human co-experience platform.
Investing in RBLX through ARK Next Generation Internet ETF (ARKW) and ARK Innovation ETF (ARKK) ETFs, WOOD has a combined holding of 700,242 shares, which translates to a 0.42% weighting in the ETFs. RBLX is #40 in the ARKK’s top holdings.
On August 16, RBLX acquired Guilded, Inc., a privately held company that is focused on building a platform to connect gaming communities. Guilded team has built a powerful platform to connect gaming communities that includes tools and features such as tiered voice chat, video chat, integrated calendars, scheduling tools. It has also launched its bot API to simplify bot development. For its fiscal third quarter, ended September 30, 2021, RBLX’s revenue increased 102.2% year-over-year to $509.34 million. However, the company’s loss from operations came in at $77.45 million, up 50.3% from the prior-year period. And its net loss was $77.19 million for the quarter, representing a 54.3% rise from its year-ago period. Its loss per share decreased 50% year-over-year to $0.13. As of September 30, 2021, the company had $1.93 billion in cash and cash equivalents.
A $2.74 billion consensus revenue estimate for the current year represents a 196.8% rise from the prior-year period. RBLX’s EPS is expected to grow at a 1.1% rate per annum over the next five years. The stock has declined 14.5% in price over the past month and closed yesterday’s trading session at $102.77.
UiPath Inc. (PATH)
New York City-based PATH provides an end-to-end automation platform that offers a range of robotic process automation (RPA) solutions with a suite of capabilities that enable organizations to scale digital business operations internationally. The company provides maintenance and support for its software and professional services. It serves the public sector, business process outsourcing (BPO), retail and consumer packaged goods (CPG) and business process automation (BPA), finance and banking, insurance, healthcare, manufacturing, and telecom industries.
Wood has been investing in PATH through ARKW, ARKK, ARK Fintech Innovation ETF (ARKF), ARK Genomic Revolution ETF (ARKG), ARK Autonomous Technology & Robotics ETF (ARKQ), and ARK Space Exploration & Innovation ETF (ARKX). She has a combined holding of 14.03 million PATH shares, which translates to a 3.56% weighting in funds. PATH is ranked #11 in ARKK’s holdings.
On December 6, PATH and Accenture plc (ACN), an Ireland-based multinational professional services company, expanded their business collaboration to help clients boost the adoption of enterprise-wide automation, accelerate technology transformation efforts, and create new growth opportunities. The companies are looking forward to combining PATH’s robust automation solutions with ACN’s complimentary services and industry expertise to help clients increase productivity.
PATH’s total revenue for its fiscal third quarter, ended October 31, 2021, increased 49.9% year-over-year to $220.82 million. The company’s non-GAAP gross profit came in at $188.25 million, representing a 43.7% rise from the prior-year period. Its non-GAAP operating income was $9.10 million, versus a $13.58 million loss in the year-ago period. PATH’s non-GAAP net income came in at $2.10 billion, versus a $21.63 million net loss in the prior-year period. Its non-GAAP EPS was zero, compared to a $0.04 loss per share in the year-ago period. And the company had $1.78 billion in cash and cash equivalents as of October 31, 2021.
PATH surpassed the consensus EPS estimates in the last three trailing quarters. Analysts expect PATH’s revenue to be t $885.45 million for the current year, indicating a 45.7% year-over-year improvement. The company’s EPS is expected to grow at a 35% rate per annum over the next five years. The stock has declined 9.7% in price over the past month and ended yesterday’s trading session at $44.16.
Robinhood Markets, Inc. (HOOD)
HOOD operates a financial services platform that allows users to invest in stocks, ETFs, options, gold, and cryptocurrencies. The Menlo Park, Calif., company also offers Snacks, a digest of business news stories; Learn, a collection of articles including financial dictionary; Newsfeeds; and lists, which allow users to create custom watchlists to monitor securities and cash management services.
Wood has been investing in PATH through ARKW, ARKK, and ARKF ETFs. She has a combined holding of 12.59 million PATH shares, which translates to a 1.39% weighting in the funds. PATH is ranked #27 in ARKK’s holdings.
HOOD’s total net revenues for its fiscal third quarter, ended September 30, 2021, increased 35.4% year-over-year to $364.92 million. The company’s net loss came in at $1.32 billion, up 12250.6% from the prior-year period. Its loss per share increased 4020% year-over-year to $2.06. And the company had $6.17 billion in cash and cash equivalents as of September 30, 2021.
Analysts expect the company’s revenue to improve 22% year-over-year to $2.24 billion in the current year. HOOD’s EPS is expected to grow at a 79.5% rate per annum over the next five years. The stock has gained 34% in price year-to-date and closed yesterday’s trading session at $18.38.
PagerDuty, Inc. (PD)
San Francisco-based PD operates a digital operations management platform internationally. The company’s platform provides on-call management, event intelligence, incident response, business visibility, and advanced analytics solutions to address digital operations management requirements. It serves various industries, including software and technology, telecommunications, retail, travel and hospitality, media and entertainment, and financial services.
Investing in PD through ARKW and ARKK ETFs, WOOD has a combined holding of 7.02 million shares, which translates to a 1.5% weighting in the funds. PD is #24 in the ARKK’s top holdings.
On November 29, PD announced a multi-year go-to-market agreement with Amazon.com, Inc.’s (AMZN) Amazon Web Services, Inc. (AWS) subsidiary to help companies accelerate cloud adoption and streamline hybrid-cloud operations. Upon rapid digitalization of various industries, the offering of intelligent AIOps and automation will help companies tackle complexity and workloads without taxing tech teams. Also, the companies announced the availability of PD’s fully managed Rundeck Cloud automation offering on AWS in early 2022.
PD’s revenue for its fiscal third quarter, ended October 31, 2021, increased 33.5% year-over-year to $71.76 million. The company’s gross profit came in at $59.72 million, up 29.6% from the prior-year period. Its loss from operations was $24.82 million, indicating a 13.6% rise from the year-ago period. While its net loss increased 27.8% year-over-year to $26.34 million, its loss per share increased 19.3% to $0.31. The company had $359.74 million in cash and cash equivalents as of October 31, 2021.
Analysts expect PD’s revenue to rise 30.7% year-over-year to $279.10 million in the current year. It surpassed Street’s EPS estimates in each of the trailing four quarters. PD’s EPS is expected to grow at a 30% rate per annum over the next five years. The stock has declined marginally in price over the past month and ended yesterday’s trading session at $36.69.
RBLX shares rose $0.47 (+0.46%) in premarket trading Thursday. Year-to-date, RBLX has gained 48.91%, versus a 27.05% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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