Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

Cathie Wood trounced the market in 2020, with her aggressive investing style helping Ark Invest’s family of exchange-traded funds outperform. She beat the market again in 2023 after back-to-back years of disappointing returns. She’s off to a challenging start this year, but she’s making trades — and publishing them daily for all to see — to get back on track.

What is she buying these days? Wood added to her existing positions in Palantir (NYSE: PLTR), Tesla (NASDAQ: TSLA), and Intellia Therapeutics (NASDAQ: NTLA) on Tuesday. Let’s take a closer look at the stocks she just bought.

Palantir

Wood has a tendency to buy on dips with many of her favorite stocks. On Tuesday, though, she bought one of that day’s biggest winners. Shares of Palantir soared 31% after the company posted blowout financial results. Wood bought on the pop.

Revenue rose 20% to $608.4 million, just ahead of the 18% increase that analysts were targeting. The software builder for the intelligence community also notched its fifth consecutive quarter of reported profitability. Palantir’s adjusted net income of $0.08 per share landed just ahead of the $0.07 per share that Wall Street pros were expecting.

Person wearing a headset and smiling at a computer monitor.

Image source: Getty Images.

It doesn’t seem like much of a beat for such a big jump in price, but the report helped cement Palantir’s status as a play on artificial intelligence (AI). Some of last year’s biggest winners were AI stocks. Palantir shares more than doubled in 2023, and now they’re off to a great start in 2024. The stock has more than tripled since the start of last year.

Palantir was initially seen as a government contractor when it hit the market, but it’s making waves in the private sector. It saw its U.S. commercial revenue soar 70% for the quarter, now accounting for more than one-fifth of its top-line results. Guidance was also encouraging. After posting 17% revenue growth for all of 2023, the midpoint of its new outlook calls for a 19% increase this year.

Tesla

It’s been a bad start to 2024 for Tesla shareholders. The stock is trading 26% lower this year, off 38% from last summer’s high. Price cuts on its electric vehicles last year and a disappointing financial report two weeks ago aren’t helping. The shares opened lower on Tuesday after Jairam Nathan at Daiwa downgraded Tesla to neutral from outperform, slashing his price target from $245 to $195.

He feels that the recent corporate governance concerns related to CEO Elon Musk could get in the way of Tesla making long-term investments, as well as its ability to innovate. Bloomberg would go on to report on Wednesday morning that Tesla employees are starting to worry about layoffs after sources say managers were asked to identify which jobs at the company were critical. The EV pioneer remains Wood’s second-largest position across all of Ark Invest’s stakes.

Intellia Therapeutics

Wood isn’t afraid to take large positions in small stocks. Intellia Therapeutics has a modest $2.4 billion market cap, with an enterprise value that shrinks to $1.5 billion once you factor in its cash-rich and debt-light balance sheet. Ark Invest now owns more than 11% of its shares outstanding.

Intellia is a gene-editing stock, and it’s a good thing that it’s flush with cash given the company’s losing money at this phase of its life cycle. It’s still conducting early clinical-phase trials for some promising therapies.

Stifel lowered its price target on the shares from $93 to $80 last month. The firm is concerned that Intellia’s move to streamline operations — cost-cutting measures that should keep its current liquidity going through mid-2026 — may lead it to scale back on some longer-term projects. The silver lining here is that with the stock down 87% since peaking three years ago, it would have to more than triple from where it is now to hit that $80 goal.

Should you invest $1,000 in Palantir Technologies right now?

Before you buy stock in Palantir Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 5, 2024

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intellia Therapeutics, Palantir Technologies, and Tesla. The Motley Fool has a disclosure policy.

Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool

Source link

Leave a Comment