Cathie Wood has been busy in 2024. The list of daily trades posted by the co-founder, CEO and ace stock picker for the Ark Invest family of exchange-traded funds has been longer than usual. She added nine of her existing positions on Wednesday.
What is she buying now? Some of the more interesting names on his shopping list this time around include Grill (NYSE:TOST), Unity software (NYSE:U)And Not (NYSE: NOW). Let’s take a closer look at some of his Wednesday additions.
Grill
It’s hard to avoid a Toast POS drive if you like to dine out or even drive for takeout. There are currently 99,000 restaurants on the platform, an increase of 34% from the past year alone.
Being greeted with a handheld device at the start or end of a meal may seem like a new technological contrast to one of the oldest industries – but it works. Guests can be seated quickly. Your waiter or waitress can close you out without having to go back and forth with your credit card. The restaurant owner benefits from being able to turn tables more quickly, thus increasing the potential daily attendance limit.
The title was hit in November when it was published problematic orientation. Toast reported flat growth in gross payment volume by location in the third quarter and warned that the metric was slightly negative in the current quarter.
Fortunately for investors, Toast can offset this volume by increasing its footprint. It also helps that Toast offers a growing suite of tools, giving it more revenue channels than just picking up a tab at the table.
Wood strengthened her position in Toast on Wednesday – and she’s not the only one interested in the title. Goldman Sachs upgraded shares earlier this week, raising its rating from neutral to buy.
The company understands that there is a bearish narrative focused on payments volume trends, but believes the market is not interested in Toast’s improving results. The analyst says that Toast could reach the announced profitability as early as next year if it manages to control its fixed costs.
As short-term interest rates approach October’s all-time high, a tightening is possible for the stock, which has remained steady in an otherwise rising market over the past year. The investment appetite for Toast may seem low, but Wood is always hungry for the next move.
Unit
Unity began this week by announcing that it would lay off 1,800 employees, or 25% of its workforce. The market sometimes applauds pink slips as evidence of its commitment to operational efficiency, but it hasn’t happened that way for the game engine developer.
Monday afternoon’s announcement sent shares down 8% on Tuesday. Wood went to the bar to collect the discarded stock on Wednesday.
This isn’t the first time a seemingly positive decision has tripped up Unity. It announced new fees for developers over the summer, widely seen as a power move. (You don’t risk a price increase unless you think you have the elasticity to achieve it.)
The unit has failed. An outcry from developers resulted in the company reversing its decision two weeks later.
This rapid turnaround ultimately led Unity to turn to a new CEO. Unity stock is down 82% since its late 2021 peak, but up a respectable 30% since the start of last year. Revenue growth is expected to slow sharply this year, but with Unity’s financial results improving as it continues to generate double-digit gains, Wood is betting more on the stock.
Not
There aren’t many times when Wood and Warren Buffett will agree on an investment, but Nu Banks, Nubank’s parent company, is that rare common ground. Wood has been a buyer of the Brazilian neobank operator for more than two years; Berkshire Hathaway purchased before Nu was even released to the public. It is one of nearly 50 securities in Berkshire Hathaway’s publicly traded investment portfolio.
Nubank launched just ten years ago, but recently hit a major milestone by reaching 84 million accounts in its home country. More than half of Brazil’s adult population now has an account with the rapidly growing network. financial technology business. Nu is expanding into other Latin American countries, but this does not weigh on its profitability.
The company has reported positive net income for five consecutive quarters. A stock that just grew its revenue by 53% in its latest report and is trading at a price 15 times what analysts estimate it would earn in 2025, making it a growing stock . And value of shares. No wonder Buffett and Wood are on the same page.
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Rick Munarriz holds positions at Nu and Toast. The Motley Fool holds positions and recommends Berkshire Hathaway, Goldman Sachs Group, Toast and Unity Software. The Motley Fool recommends Nu. The Motley Fool has a disclosure policy.
Cathie Wood goes bargain hunting: 3 stocks she just bought was originally published by The Motley Fool
