In this article we discuss the 5 best stocks to buy in 2021 according to Cathie Wood. If you want to read our detailed analysis of Wood‘s history and hedge fund performance, go directly to the 10 Best Stocks to Buy in 2021 According to Cathie Wood.
5. Zillow Group, Inc. (NASDAQ: Z)
Number of Hedge Fund Holders: 83
Zillow Group, Inc. (NASDAQ: Z) is a Washington-based online real estate marketplace founded in 2004. It is ranked fifth on our list of 10 best stocks to buy in 2021 according to Cathie Wood. Ark Investment Management owns more than 10 million shares in the company worth over $1.3 billion, representing close to 2.6% of the investment portfolio of the hedge fund. Zillow stock has returned more than 98% to investors in the past year. In addition to advertising real estate, the company offers financing and insurance products as well.
On May 4, Zillow Group, Inc. (NASDAQ: Z) posted earnings per share of $0.2 for the first three months of 2021, beating market estimates by $0.13. The revenue for the first quarter of 2021 was $1.3 billion, up 8% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm ARK Investment Management is a leading shareholder in Zillow Group, Inc. (NASDAQ: Z) with 10 million shares worth more than $1.3 billion.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Zillow Group, Inc. (NASDAQ: Z) was one of them. Here is what the fund said:
“Zillow Group, Inc. operates leading U.S. real estate sites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares fell during the quarter in concert with the broader rotation out of technology-based stocks despite the company’s continued inflection in mortgages revenue, strong profitability in its core business, and a positive real estate outlook as Zillow builds out its iBuying ecosystem. In our view, Zillow is a leader in the large online real estate advertising market with substantial upside from mortgages and Offers, and we remain investors.”
4. Roku, Inc. (NASDAQ: ROKU)
Number of Hedge Fund Holders: 60
Roku, Inc. (NASDAQ: ROKU) is a California-based company that operates a streaming platform. It was founded in 2002 and is placed fourth on our list of 10 best stocks to buy in 2021 according to Cathie Wood. Roku stock has returned more than 209% to investors in the past year. The investment company chaired by Wood owns close to 5 million shares in the streaming firm worth over $1.6 billion. This investment represents more than 3.2% of the investment portfolio of the fund.
On May 7, Roku, Inc. (NASDAQ: ROKU) stock jumped close to 13% as the firm posted strong earrings results. Investment advisory Berenberg was bullish on Roku stock after the earnings results, assigning it a price target of $439, implying 37% upside potential.
At the end of the fourth quarter of 2020, 60 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Roku, Inc. (NASDAQ: ROKU), up from 59 in the preceding quarter worth $1 billion.
In its Q4 2020 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Roku, Inc. (NASDAQ: ROKU) was one of them. Here is what the fund said:
“For two years running, Roku has now been either the largest or second largest driver of performance in portfolios. When we purchased Roku, obviously we never expected such a phenomenal outcome, so quickly—these things can only be chalked up to luck. However, we do think luck is the residue of design and Roku had all the hallmarks ex ante as the kind of position that could do something wildly spectacular. One of the first signs in seeing Roku’s potential was the sharp contrast between our modeled expectations for the top line of the business and where the consensus expectations were. This was the Shopify setup all over again. By this time, we had added an additional tool to our analytical framework, and this helped further enforce our conviction that not only was it we who were right about where things should go, but also that the very existence of this gap could be a potent source of fuel behind the stock as the world came around to our expectation. Specifically, we had become increasingly comfortable building lifetime value analyses of companies, and notably, when we bought Roku, we were quite confident that with only modest annual increases in average revenue per user (ARPU), and a 5-year average customer lifespan, we were buying the company for its existing customer base and nothing more. In other words, the growth at Roku was entirely free at the prevailing prices we bought into.”
3. Square, Inc. (NYSE: SQ)
Number of Hedge Fund Holders: 89
Square, Inc. (NYSE: SQ) is a California-based digital payments firm that is placed third on our list of 10 best stocks to buy in 2021 according to Cathie Wood. It was founded in 2009. Wood, through Ark Investment Management, holds close to 11 million shares in the company worth over $2.4 billion. Square stock has returned more than 151% to investors in the past year. The company has seen share price fall in recent weeks as heavy investments in crypto have caused a chain reaction around the industry.
Square, Inc. (NYSE: SQ) announced on May 17 that it was raising $2 billion principal amount of senior notes in two series in a private placement. The company said the funds raised would be used for general corporate purposes.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm ARK Investment Management is a leading shareholder in Square, Inc. (NYSE: SQ) with 10 million shares worth more than $2.4 billion.
2. Teladoc Health, Inc. (NYSE: TDOC)
Number of Hedge Fund Holders: 50
Teladoc Health, Inc. (NYSE: TDOC) is a New York-based telemedicine and virtual healthcare firm founded in 2002. It is ranked second on our list of 10 best stocks to buy in 2021 according to Cathie Wood. Ark Investment is bullish on the company, holding over 14 million shares in the company worth over $2.6 billion, representing over 5% of the investment portfolio of the hedge fund. Teladoc stock has returned more than 1.1% to investors in the past week. The company provides medical institutions with analytics and artificial intelligence services as well.
On May 3, investment advisory Cantor maintained a Neutral rating on Teladoc Health, Inc. (NYSE: TDOC) stock with a price target of $210, implying a 21% upside potential, on the back of commodity-like outlook on telehealth firms.
At the end of the fourth quarter of 2020, 50 hedge funds in the database of Insider Monkey held stakes worth $2.6 billion in Teladoc Health, Inc. (NYSE: TDOC), up from 47 in the preceding quarter worth $997 million.
In its Q4 2020 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Teladoc Health, Inc. (NYSE: TDOC) was one of them. Here is what the fund said:
“Teladoc Health offers remote physician access to patients at home. After experiencing incredible levels of growth throughout the early stages of the pandemic as its unique value proposition rose to the forefront of the healthcare industry, the firm’s shares cooled off a bit as optimistic vaccine data slightly curtailed investor expectations for the firm’s future growth potential. We sold the stock.”
1. Tesla, Inc. (NASDAQ: TSLA)
Number of Hedge Fund Holders: 68
Tesla, Inc. (NASDAQ: TSLA) is a California-based electric car maker and clean energy firm. It was founded in 2003 and is ranked first on our list of 10 best stocks to buy in 2021 according to Cathie Wood. Tesla stock has returned more than 259% to investors over the course of the past twelve months. The hedge fund managed by Wood owns more than 5.5. million shares in the company worth over $3.8 billion. Tesla stock has been falling in recent weeks as supply chain problems and falling EV demand in China hit vehicle delivery numbers.
On May 20, social media reports indicated that Tesla, Inc. (NASDAQ: TSLA) was planning to hold a delivery event for the Model S Plaid in early June. Tesla owner Elon Musk has said the vehicle is the fastest car ever with a zero to 60 miles per hour time of under two seconds.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Tesla, Inc. (NASDAQ: TSLA) with 24 million shares worth more than $16 billion.
You can also take a peek at Billionaire Izzy Englander’s Top 10 Stock Picks and Billionaire David Abrams’ Top Stock Picks.
