In this article, we discuss the 5 cheap stocks to buy according to Cathie Wood. If you want our detailed analysis of these stocks, go directly to the 9 Cheap Stocks to Buy According to Cathie Wood.
4. Twist Bioscience Corporation (NASDAQ:TWST)
ARK increased its holding in Twist Bioscience by 7% in the third quarter of this year, ending the period with 6.8 million shares of the company, worth $235.3 million. The San Francisco-based company makes DNA products. Cathie Wood first bought a stake in the company in the second quarter of 2019. Barclays analyst Luke Sergott in October lowered his price target on Twist Bioscience to $45 from $55 and kept an Overweight rating on the shares.
As of the end of the second quarter of 2022, 14 hedge funds tracked by Insider Monkey had stakes in the company, compared to 16 funds in the previous quarter.
3. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
As of the end of the third quarter of this year, Cathie Wood had a $167 million stake in Pacific Biosciences of California. The growth investor first bought a stake in the gene sequencing company in 2018. She sold her entire position in the company in 2019 before starting to build a large stake in the firm in subsequence years.
As of the end of the second quarter, 18 hedge funds out of the 895 tracked by Insider Monkey reported owning stakes in the company, down from 22 funds a quarter earlier. Billionaire DE Shaw’s hedge fund had an over $10 million stake in the firm as of the end of June.
2. Veracyte, Inc. (NASDAQ:VCYT)
Genomic diagnostics company Veracyte first appeared in Cathie Wood’s portfolio in 2016. As of the end of the September quarter, Cathie Wood’s hedge fund had a $150.8 million stake in the company. In September, the company announced that its Decipher Prostate Genomic Classifier may help identify African American men with early, localized prostate cancer who are most likely to harbor more aggressive disease.
Billionaire Ken Fisher was also a significant shareholder of the company as of the end of the June quarter, as his hedge fund reported having a $29.3 million stake in the company.
Here is what Artisan Partners has to say about Veracyte, Inc. in its Q2 2021 investor letter:
“Among our bottom contributors (includes) Veracyte. Veracyte develops and markets molecular tests designed to minimize ambiguity in the treatment of patients with cancer. These tests can reduce unnecessary surgeries and help put cancer patients at ease when the decision is to “watch and wait.” Shares have been pressured amid a recent investment cycle (acquired Decipher and HalioDX) and a resurgence of the pandemic earlier this year weighing on testing volumes. In addition, the company’s founder and CEO recently announced she was moving to Executive Chair. Her replacement is the former CFO of Illumina, who is very knowledgeable in invitro diagnostics and played a critical role in Illumina’s international expansion efforts (which we expect him to pursue at Veracyte). We are maintaining our position as patients return to the clinic for testing and as management executes on its strong R&D pipeline, including the upcoming launch of a nasal swab lung cancer test. Longer-term, the company is well-positioned to expand internationally as it ports its growing menu of tests onto the recently acquired nCounter instrument.”
1. 10x Genomics, Inc. (NASDAQ:TXG)
Gene sequencing company 10X Genomics has lost 80% of its value year to date and presents an attractive buying opportunity for those who are looking for cheap stocks and have a large risk appetite. In August, Goldman Sachs downgraded the stock to Sell from Neutral, citing sales growth slowdown. The firm said in a note that as 10X Genomics becomes a multi-product company, its 2023/24 sales growth could lag the consensus and historical rates.
Despite this bearish sentiment, Cathie Wood is increasing her hold in the stock, as ARK increased its stake in the company by 28%. ARK has a stake worth $130 million in the company.
Here is what ClearBridge All Cap Growth Strategy has to say about 10x Genomics, Inc. (NASDAQ:TXG) in its Q4 2021 investor letter:
“We also established a position in 10x Genomics (TXG). TXG is the dominant player in single-cell analysis and enjoys a duopoly in spatial profiling, two emerging areas of scientific research. Though the company is not yet profitable, we are attracted to the business’s strong gross margin profile and a high degree of visibility as consumables account for 85% of revenue. We also continue to see opportunities for investment in other disruptive areas of health care with large addressable markets, like diabetes.
You can also take a look at 10 Healthcare Dividend Stocks with Over 3% Yield and 10 Best Solar Energy Stocks to Buy for 2022.
