Cathie Wood is arguably the hottest name in investing today as all of her ARK Invest exchange-traded funds have more than doubled their investors’ money in the past year. And because people like to go with a winner, Wood’s ETFs are attracting more new money than virtually any other ETF in any given month…
While the eight ARK Invest funds hold stakes in dozens of companies, Wood isn’t afraid to make some big bets on specific stocks either. Chinese e-commerce giant JD.com, for example, is held in four ARK ETFs for a total investment of $415 million, yet she has invested over $1 billion in nine separate companies. In three of them, she’s gone really big, investing $2 billion or more.
Below, we’re going to focus on those three, and also see how they’re viewed by the many investors at Motley Fool CAPS. Hot money managers come and go, but using the wisdom of crowds to find investment options can also prove a rewarding strategy.
CAPS aggregates the opinions of tens of thousands of players to assign ratings to each stock based on its perceived likelihood of outperforming the market, from one to five stars, with five being best. Players are also rated based on how well their stock picks perform, with those earning higher ratings having more influence on a stock’s rating.
In other words, if you’re an investor with a great stock-picking track record on the platform, CAPS gives your opinion more weight.
Wood investment: $2.45 billion
CAPS Rating: 5 Stars
Virtual care leader Teladoc Health (NYSE:TDOC) suffered something of a setback when Amazon (NASDAQ:AMZN) announced its intention to enter the telehealth market this year, but maybe the media made more out of that than was warranted.
Over the years, Amazon has launched numerous products and services that were promised to disrupt whatever market they were in, but that ultimately flamed out. Fire phone, anyone? How about A9 Search, Auctions, PayPhrase, or Payments? Are you using Amazon Wallet?
When the tech and e-commerce giant is successful, it tends to be wildly so, but Amazon also throws a lot of things at the wall to see what sticks, and Teledoc has already established a commanding presence in virtual health.
Due to the pandemic, Teledoc’s worldwide revenues doubled in 2020, and we can anticipate that its services will remain popular even after the threat of COVID-19 recedes, if only because virtual visits beat sitting in an overbooked doctor’s office waiting room for hours waiting to be seen.
Teladoc’s massive $18.5 billion acquisition of Livongo Health should also bolster its bottom line, as Livongo collects data on patients and, using artificial intelligence systems, “nudges” them to accept personalized health coaching and information.
Nearly 1,200 CAPS players have rated Teladoc, with 99% believing it will outperform the market, giving it a top 5-star rating. Its share price may be down 42% since Amazon’s announcement, but there appear to be good reasons for the bullishness that Wood and the CAPS players are expressing about its prospects.
Wood investment: $2.51 billion
CAPS rating: 5 stars
Mobile payments processor Square (NYSE:SQ) is held in three ARK ETFs, and it’s easy to see why Wood likes this company. Although it faced some headwinds from the COVID-19 pandemic as businesses closed their doors, a reopening U.S. economy is poised to get that aspect of its operations growing again. Moreover, it has expanded its offerings, and now even includes a federally chartered bank, opening up even more potential opportunities to expand the products and services it offers.
Last year, it also faced the potential of a big-name company entering its space as a…
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