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3 Stocks Cathie Wood's Red-Hot ARK ETFs Have Been Snapping Up

By Investing.com (Jesse Cohen/Investing.com)Stock MarketsMar 03, 2021 06:28AM ET
www.investing.com/analysis/3-stocks-cathie-woods-redhot-ark-etfs-have-been-snapping-up-200564615?utm_source=responsys&utm_medium=email&utm_campaign=Editorial_DailyDigest_WWW_03/03/2021&utm_content=analysisl_headline
3 Stocks Cathie Wood's Red-Hot ARK ETFs Have Been Snapping Up
By Investing.com (Jesse Cohen/Investing.com)   |  Mar 03, 2021 06:28AM ET
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Red-hot investment firm ARK Investment Management—led by well-known growth investor Cathie Wood—has gotten a lot of attention lately due to the buying frenzy in its suite of actively managed exchange-traded funds (ETFs).

All five of ARK Invest’s main ETFs more than doubled in 2020, with the firm’s ARK Genomic Revolution ETF (NYSE:ARKG) leading the pack, soaring 178% last year. The ARK Next Generation Internet ETF (NYSE:ARKW) (+154%) and the flagship ARK Innovation ETF (NYSE:ARKK) (+148%) were not too far behind.

ARK ETFs Daily
ARK ETFs Daily

Despite enduring some recent turbulence—ARK suffered the largest net outflows in the firm’s seven-year history on Feb. 23—the group of ETFs seem well positioned to continue their march higher thanks to big bets on some of the most innovative, disruptive, and exciting names in the market. 

Below we highlight three stocks which have been significant buys for ARK in recent weeks, considering the size and persistence of Wood's purchasing activity.

All numbers are updated as of ARK’s Mar. 2 filing disclosure.

ARK Holdings
ARK Holdings

1. Teladoc 

  • ARK Ownership: 7.55% 
  • Funds: ARKK, ARKW, ARKF, ARKG 
  • Weight: 4.69%

After scoring a remarkable gain of 140% in 2020, shares of Teladoc (NYSE:TDOC) shot up another 54% at one point early in 2021, before a sell-off in companies that rallied throughout the COVID-19 pandemic took some wind out of the high-flyer’s sails. 

TDOC stock ended at $217.92 on Tuesday, nearly 30% below its all-time high of $308.00 notched on Feb. 16. At current valuations, the Purchase, New York-based telehealth pioneer has a market cap of $32.5 billion.

TDOC Daily
TDOC Daily

Two ARK exchange-traded funds bought nearly 200,000 shares of Teladoc on Mar. 1: ARKK purchased 111,041 shares, while ARKW bought an additional 88,691 shares. The buying activity comes after ARK Invest snapped up roughly 1.057 million TDOC shares in February.

The largest US telemedicine company is now ARK’s second-largest holding overall, leap-frogging Square (NYSE:SQ), and Roku (NASDAQ:ROKU) in recent days, and trailing only Tesla (NASDAQ:TSLA).

Teladoc posted fourth-quarter revenue of $378.9 million when it reported financial results on Feb. 24, surging 145% from the year-ago period thanks to soaring demand for its virtual healthcare platform amid the ongoing health crisis.

The company, which uses telephone and video-conferencing software to provide on-demand remote medical care, logged 2.96 million total visits in Q4, an increase of 139% from the same quarter last year. 

Visits related to non-infectious diseases like back pain, blood pressure, anxiety, and depression rose to 75% of total visit volume, up from 50% in the previous year period. 

Even though the company's 2021 revenue and membership guidance failed to impress investors, we believe Teladoc is well-positioned to remain the leader in the fast-growing telehealth services space.

2. Unity Software

  • ARK Ownership: 2.05%
  • Funds: ARKK, ARKW
  • Weight: 1.15%

Unity Software (NYSE:U), which provides tools for creating videogames, has seen its stock endure some turbulence lately. After scoring a gain of 195% in 2020, shares of the company, which made their trading debut in mid-September, have fallen almost 30% so far in 2021. 

U stock—which settled at $108.10 last night—is currently trading about 38% below the all-time peak of $174.94 reached on Dec. 23, giving the video game software developer a market cap of $28.4 billion.

U Daily
U Daily

Cathie Wood’s ARK fund went on a shopping spree as U shares tumbled in February, making no less than 13 purchases of the stock during the month. In total, she added 2.19 million shares to her portfolio, bringing ARK Innovation's stake in Unity to roughly 2%. It is currently the fund’s 24th largest holding.

Unity reported blowout earnings and revenue in its second quarterly report as a public company on Feb. 5, but it provided sales guidance that came in well below expectations.

The San Francisco, California-based company lost an adjusted $0.10 per share in the last three months of 2020. Revenue grew 39% year-over-year to $220.3 million, reflecting growing demand for its video game development platform.

For full-year 2021, Unity expects revenue of about $960 million, which would represent growth of 24%, slowing considerably from a 43% sales increase in 2020.

Unity Software’s stock still looks attractive, thanks in large part to the strong demand it has seen for its video game and digital content creation platform.

3. DraftKings

  • ARK Ownership: 0.51%
  • Funds: ARKW, ARKF 
  • Weight: 0.26%

DraftKings' (NASDAQ:DKNG) shares have had a remarkable run over the last 12 months as stay-at-home measures aimed at reducing the spread of the coronavirus outbreak fueled a boom in online sports betting.

The stock of the Boston, Massachusetts-based sportsbook operator has soared by a whopping 311% since going public through a special purpose acquisition company (SPAC) on Apr. 24.

DKNG touched a new record high of $70.03 yesterday, before closing the session at $68.58, earning the sports betting platform a valuation of roughly $25.2 billion.

DKNG Daily
DKNG Daily

The ARK Fintech Innovation ETF (NYSE:ARKF) purchased 173,800 DKNG shares to start off the new month on Monday. In February, ARK’s combined ETFs bought a total of 1.566 million shares of the sports betting company. It is now ARK’s 84th largest holding, with the name likely to move further up the list in the months ahead.

DraftKings reported blockbuster fourth quarter financial results on Feb. 26, as Americans flocked to its sports-betting platform after more states legalized online sports gambling.

The company said revenue jumped 146% from the year-ago period to $322 million, blowing past consensus estimates for sales of $233.2 million. 

In a sign of how well its key business performed, average monthly unique paying customers jumped 44% year-over-year to 1.5 million, while average revenue per monthly unique payer rose 55% to $65.

The upbeat results prompted the company to boost its 2021 revenue target to about $950 million, up from its previous forecast of $800 million.

All in all, the company looks set to continue to deliver on its key priorities, which include entering new states at the earliest opportunity, investing in product and technology to create new offerings, and acquiring and retaining customers.

3 Stocks Cathie Wood's Red-Hot ARK ETFs Have Been Snapping Up
 

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3 Stocks Cathie Wood's Red-Hot ARK ETFs Have Been Snapping Up

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Comments (7)
Salvatore Milazzo
Salvatore Milazzo Mar 03, 2021 6:25PM ET
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Last week Cathy W. let out a cry for help with her so called “announcement”, and now this. Seem somethings not quite right with the normally quiet Cathy and ARKworld!
Ron Love
Ron Love Mar 03, 2021 6:25PM ET
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Utter nonsense
Eliot Zake
Eliot Zake Mar 03, 2021 2:55PM ET
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watch out for these
Russell Amerio
Russell Amerio Mar 03, 2021 12:19PM ET
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Red hot?
Edward Enderlin
Edward Enderlin Mar 03, 2021 12:09PM ET
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Yawn!
Justin McPartland
Justin McPartland Mar 03, 2021 12:08PM ET
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Those who don’t learn from the mistakes of others in the past are doomed to repeat it.
Tobias Schrøder
Tobias Schrøder Mar 03, 2021 12:03PM ET
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Everyone knows growth stocks are Going dead now. boring value stocks are red hot now...
Ong Kein Kok
Ong Kein Kok Mar 03, 2021 12:03PM ET
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Gene Kret
Gene Kret Mar 03, 2021 8:41AM ET
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Test drive a Tesla it doesnt cost anything and you will love it.
Nison Kay
Nison Kay Mar 03, 2021 8:41AM ET
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yeah only cost me 50c at a local arcade.
Nison Kay
Nison Kay Mar 03, 2021 8:41AM ET
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I actually feel that giant iPad is distracting. most cars these days are too distracting I'm always playing with the screens instead of looking at the road.
Star Boi
Star Boi Mar 03, 2021 8:41AM ET
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Nison Kay Haha, oh the irony. They fine you for even glancing at your phone whilst driving, but whack a huge screen in your car with a thousand things going on and lots of flashing LED's, no worries! By the way, I'm not condoning this behavior. I have to deal with enough useless drivers on the road who cant drive at the best of times.
 
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