In this article, we discuss 5 small-cap growth stocks in Cathie Wood’s portfolio. You can see more of Woods’s favorite small-cap stocks by clicking 10 Small-Cap Growth Stocks in Cathie Wood’s Portfolio.
5. CareDx, Inc (NASDAQ:CDNA)
Percentage of ARK Investment Management’s 13F Portfolio: 0.54%
ARK Investment Management’s Stake Value: $129.88 million
Number of Hedge Fund Holders: 19
Market Capitalization: $1.19 billion
CareDx, Inc. (NASDAQ:CDNA) is a leading precision medicine company focused on the discovery, development and commercialization of clinically differentiated, high-value healthcare solutions for transplant patients and caregivers. Catherine Wood reported owning over 3.51 million shares of CareDx, Inc. (NASDAQ:CDNA) in Q1 2022, worth $129.88 million.
Earlier this April, Stephens analyst Mason Carrico initiated coverage of CareDx, Inc. (NASDAQ:CDNA) with an Overweight rating and $50 price target. According to the analyst, CareDx has established itself as the leader in transplant diagnostics over the past two decades, which has resulted in strong test adoption and a multi-year presence within the vast majority of transplant centers in the U.S. This position not only supports continued use of current tests, but also paves the way for adoption of future tests, said Carrico, who sees CareDx, Inc. (NASDAQ:CDNA) capturing majority share of the market as it expands.
By the end of the first quarter of 2022, 19 hedge funds were long CareDx, Inc. (NASDAQ:CDNA) with stakes worth $270.59 million. This is compared to 26 firms that held stakes in the company in the preceding quarter. Israel Englander’s Millennium Management is one of the biggest shareholders of CareDx, Inc. (NASDAQ:CDNA), with stakes valued at $22.59 million.
Baron Funds, an asset management firm, named several stocks in its “Baron Discovery Fund” fourth-quarter 2021 investor letter, one of which was CareDx, Inc (NASDAQ:CDNA). Here is the firm’s view on the stock:
“CareDx, Inc. provides transplant testing and ancillary services. The company reported strong fourth quarter earnings (it beat and raised full-year guidance), driven primarily by its kidney and heart transplant tests. It also continues to move forward with more transplant tests (liver, stem cell/bone marrow transplant, cell transplant, and lung). We believe the weak share performance in the quarter related to flattish revenue guidance in the fourth quarter driven by some holiday seasonality and the Omicron COVID variant. Additionally, some investors were concerned that average selling prices were a bit lower in the third quarter, however this reflects the company’s new lung test which is not yet reimbursed by commercial insurers (but which CareDx is running to gain share). This is typical of
diagnostic launches, and we are not concerned. There is also noise surrounding a competitor’s study data in kidney that is purported to be more accurate than CareDx’s test. While the headline number looks slightly better for the competitor, it is important to note that CareDx’s Heart Care combination test, which includes both donor-derived DNA and gene expression testing, is at least comparable to the competitor’s accuracy. Also, the full publication has not yet been released, and we have reason to believe that CareDx could successfully modify its test to be as accurate as the competitor if needed. CareDx has proven itself to be a terrific long-term partner to its customers, providing not only tests, but services to transplant centers and their patients that creates brand stickiness, and therefore competitive advantage beyond pure testing. We are not concerned by the short-term dip in the share price as CareDx still has significant market opportunity in kidney, heart, and all of its pipeline products.”
