Even the best investors can experience tough times. That’s happening with ARK Invest founder and CEO Cathie Wood. The share prices of the five largest exchange-traded funds (ETFs) managed by Wood are well off their highs from earlier this year…
However, pullbacks present tremendous opportunities for other investors to scoop up shares of the best companies owned by the ARK ETFs. Here are three beaten-down Cathie Wood stocks that are especially great picks to buy right now.
Sea Limited (NYSE:SE) ranks as the fifth-largest position in Wood’s ARK Fintech Innovation ETF. It’s No. 10 among the top holdings in the ARK Next Generation Internet ETF. The company’s shares have retreated more than 12% from the peak set in February.
Sure, the company announced a steep Q4 loss in early March. However, the stock’s decline is more related to a rotation away from growth stocks than anything related to Sea’s underlying business. Actually, the company’s business is booming.
Sea’s digital-entertainment unit is practically minting money off the success of Free Fire, the highest-grossing mobile game in Latin America and in Southeast Asia for six consecutive quarters. This business is essentially subsidizing the company’s money-losing units, which are focused on digital finance and e-commerce.
However, I think that Sea’s long-term prospects look very good for all three businesses. Free Fire remains a global mobile gaming juggernaut. Sea’s Shopee e-commerce platform is a market leader in Southeast Asia, Indonesia, and Taiwan and continues to deliver strong revenue growth. The company’s SeaMoney mobile wallet also is picking up momentum.
I expect Sea’s bottom line to improve. And I look for its share price to rebound nicely.
There aren’t many stocks that Wood likes more than Square (NYSE:SQ). The fintech stock is the biggest holding in the ARK Fintech Innovation ETF and the second-largest position in both the ARK Innovation ETF and ARK Next Generation Internet ETF. But Square stock is down 11% from its February high.
As was the case with Sea Limited, Square’s pullback is primarily a result of the market rotation. Although the company’s seller ecosystem was negatively impacted by the COVID-19 pandemic, there were signs of improvement in the fourth quarter. And the increased availability of vaccines bodes well for a stronger performance throughout the rest of 2021.
Meanwhile, Square’s Cash App digital wallet continues to be a monster growth story for the company. Cash App gross profit skyrocketed 162% year over year in Q4. Square should be able to deliver even more growth by driving increased adoption of related products and services such as the Cash Card debit card.
The company achieved a significant milestone in March as its…
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