Cathie Wood Snaps Up Bargains: The Latest Stocks in Her Portfolio

Cathie Wood Snaps Up Bargains: The Latest Stocks in Her Portfolio

It hasn’t been a good year for Cathie Wood so far. The co-founder and CEO of Ark Invest has seen many of her favorite stocks fall in an otherwise ascendant market. Although 2024 is off to a strong start for most growth investors, Ark Invest’s largest exchange-traded fund (ETF) is trading down 4% year to date. Some of its main titles fare even worse.

Actions of You’re here (NASDAQ:TSLA), Year (NASDAQ:ROKU)And Roblox (NYSE:RBLX) are down 20-31% so far in this young year, but Wood moved up all three positions on Monday. Let’s take a closer look at the currently out-of-favor stocks she’s buying.

1. Tesla: down 31%

Tesla’s stock price more than doubled in 2023. This year is a different story. The leading electric vehicle (EV) maker fell in January after announcing financial results poorly received for the fourth quarter. Revenue rose just 3% to $25.2 billion while adjusted earnings fell 40% to $0.71 per share. Analysts expected more on both fronts.

It shouldn’t be surprising to see the company’s sales growth slow and its margins collapse. Tesla has spent most of the last year slashing electric vehicle prices in an effort to drum up enough demand to match its ramping up production of electric vehicles. Reducing sticker prices to a level where even the base Model X now qualifies for the $7,500 federal tax credit has helped move cars.

Indeed, Tesla had no problem selling cars: deliveries of new units climbed 20% in the fourth quarter. It was the sharp decline in average selling prices year-on-year, as well as the continued shift of buyers towards the cheaper Model 3 and Model Y, which led to a disappointing 3% increase in sales figures. business. The bottom line would naturally suffer, as the company’s price cuts exceeded its potential savings.

Cathie Wood Snaps Up Bargains: The Latest Stocks in Her Portfolio

Image source: Getty Images.

The stock began rebounding in February along with the broader market, but it has fallen again this month on concerns that the current quarter could be another dud. As Tesla offers aggressive promotions to buyers of its existing inventory on the condition that they take delivery of their new electric vehicles by the end of March, there is a growing sense among observers that its first-quarter numbers will be weak. Bernstein analyst Toni Sacconaghi on Tuesday lowered his price target on Tesla from $150 to $120, sharply lowering his production estimates for the current quarter and all of 2024. He also issued a forecast earnings of $2.22 per share for 2025, well below analysts’ forecasts. consensus of $3.67 per share and considerably less than what Tesla earned in 2022 and 2023.

Wood isn’t shy about buying stocks that are down nearly a third this year. Tesla has already rebounded from strong sales. Tesla remains the second largest stock among all Ark Invest portfolios.

2nd year: down 29%

Roku, another big Ark Invest stock, also more than doubled last year. This is currently the fund manager’s fourth position. The streaming platform powerhouse is increasing engagement and expanding its audience, but the worry now is that its competitors are starting to get hungry and Roku’s return to profitability may not happen anytime soon.

There are now 80 million active accounts on Roku’s operating system, a 14% increase from last year. However, it continues to lose money and average revenue per user saw a surprising sequential decline during its disappointing fourth quarter. Analysts don’t expect a return to profitability until 2027, but Roku has launched initiatives that prioritize returning to positive results.

The wood is patient. She watches, cradling the remote, as she purchases more volatiles. streaming service stock.

3. Roblox: down 20%

Roblox is Ark’s tenth largest position. The online gaming platform developer didn’t double in value like Tesla and Roku last year, but its 61% gain in 2023 outpaced overall market averages. However, it declined in 2024.

Unlike Tesla and Roku, Roblox shares rose after the company reported better-than-expected fourth-quarter results. Revenue and bookings increased 30% and 25%, respectively, during the quarter, an acceleration from the first half. Its headline forecast for 2024 was also encouraging. However, its loss forecasts have widened.

Its number of daily active users has recovered from a sequential decline in the second quarter of last year. If the popularity of the gaming platform continues to grow, we can expect increases to follow. Wood seems to think so, judging by his decision to increase his stake in the company on Monday.

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Rick Munarriz holds positions in Roku. The Motley Fool ranks and recommends Roblox, Roku 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

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