In this article, we discuss the 10 stocks that Cathie Wood doubled her stakes in 2022. If you want to read about some more stocks that Wood is doubling down on, click Cathie Wood Doubled Her Stakes in These 5 Stocks in 2022.
Cathie Wood of ARK Investment Management has seen her growth-heavy portfolio steadily lose billions in value over the past few months as interest rates rise and batter risky stocks. The portfolio value of her equity holdings has dropped from $33 billion at the end of December 2021 to around $23 billion at the beginning of the second quarter of 2022. During the period, Wood made new purchases in 38 stocks, sold out of 46 firms, made additional purchases in 140 equities, and reduced holdings in 167 stocks.
Some of the top stocks in the ARK portfolio at the end of the first quarter of 2022 included Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX). Despite the beating that ARK Investment Management has taken, Wood has doubled down on her growth bets. At a recent appearance on a webinar, Wood attacked the central bank for being “too aggressive” with a hike in interest rates, noting that the global economy had already gone into a recession, with stock market volatility a sign of investor panic in this regard.
Wood highlighted that there were a lot of indicators of a looming bear market, with investors trying to short innovative firms a prime example. Wood claims that these shorts will be forced to cover their positions. The flagship ARK Innovation ETF of Wood, one of the biggest winners of 2020, is down more than 57% this year. Compared to the highs it touched in February 2021, the fund is down over 70%. Despite the losses, Wood continues to attract investor interest, with her fund drawing over $455 million in net inflows in the first week of May.
Our Methodology
These were listed according to the investment portfolio of ARK Investment Management at the end of the first quarter of 2022. Only equities in which the hedge fund has increased its stake by 80% or more, when compared to the portfolio at the end of the fourth quarter of 2021, were selected. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey in Q4 2021 was used to quantify the popularity of each stock in the hedge fund universe.
Cathie Wood of ARK Investment Management
Cathie Wood Doubled Her Stakes in These Stocks in 2022
10. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 96
Percentage Increase in Stake During Q1: 80%
Block, Inc. (NYSE:SQ) provides payments services. The firm posted earnings for the first quarter of 2022 on May 5, reporting earnings per share of $0.18, missing market estimates by $0.02. The revenue over the period was $3.9 billion, down over 21% compared to the revenue over the same period last year and missing analyst expectations by $180 million. In the first three months of 2022, the Cash App of the company generated $2.46 billion of revenue and $624 million of gross profit.
On May 6, Truist analyst Andrew Jeffrey maintained a Buy rating on Block, Inc. (NYSE:SQ) stock and lowered the price target to $165 from $220, noting the firm was approaching a period of higher investment to expand beyond the current market.
At the end of the fourth quarter of 2021, 96 hedge funds in the database of Insider Monkey held stakes worth $5.9 billion in Block, Inc. (NYSE:SQ), compared to 98 in the preceding quarter worth $8.8 billion.
Just like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Block, Inc. (NYSE:SQ) is one of the growth stocks on the radar of hedge funds.
In its Q1 2022 investor letter, Farrer Wealth Advisors, an asset management firm, highlighted a few stocks and Block, Inc. (NYSE:SQ) was one of them. Here is what the fund said:
“Block, Inc. (NYSE:SQ) (formerly Square): We ‘adopted’ Block’s stock after the company bought Afterpay, which we were investors in. We had been trimming the Afterpay position throughout 2021 and trimmed again after the acquisition, so the position was quite small. We held onto that small portion, as we did think the acquisition made sense and were excited to see the two companies integrate and for Block, Inc. (NYSE:SQ) to create a closed loop network between merchants and consumers. However, the market punished most highly valued tech stocks over the last months, and we saw the position move against us by over 50%. We are firm believers that when a stock goes against you by 50%+, you need to do something about it. Either trim/sell and reinvest or buy more. In the case of Block, the original reason for holding was to see how the acquisition and integration with Afterpay panned out. The market did not give us the time to see this play out, thus we were not comfortable adding more to the position. Further for the stock to recover to our purchase price, we felt the company’s valuation would need to command a future exit multiple that the market would be unlikely to pay in this environment. Given this, we exited the remainder of the position.”
9. Fiverr International Ltd. (NYSE:FVRR)
Number of Hedge Fund Holders: 22
Percentage Increase in Stake During Q1: 86%
Fiverr International Ltd. (NYSE:FVRR) owns and runs an online marketplace for talent. At the end of March 2022, ARK Investment Management owned 32,997 shares in the company worth $2.5 million, representing 0.01% of the portfolio. The fund first purchased a stake in the company in the third quarter of 2019, buying over 19,000 shares at an average price of $22.88 per share. The fund has been steadily adding to the holding in 2021, increasing its stake in the firm by 5% and 85% in the last two quarters of the year.
On April 25, MKM Partners analyst Rohit Kulkarni maintained a Neutral rating on Fiverr International Ltd. (NYSE:FVRR) stock and lowered the price target to $68 from $90, noting the exposure of the firm to the Ukraine war as one of the main reasons behind the target decrease.
At the end of the fourth quarter of 2021, 22 hedge funds in the database of Insider Monkey held stakes worth $383 million in Fiverr International Ltd. (NYSE:FVRR), compared to 29 in the previous quarter worth $520 million.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Fiverr International Ltd. (NYSE:FVRR) was one of them. Here is what the fund said:
“We sold out of Fiverr International Ltd. (NYSE:FVRR), the marketplace for freelance services, since the stock ran up multiple fold since our purchase less than a year ago and traded at a valuation that we thought captured much of the future opportunity.”
8. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 55
Percentage Increase in Stake During Q1: 98%
Cloudflare, Inc. (NYSE:NET) owns and runs a cloud platform. On April 4, the company announced that it had completed the purchase of Area 1 Security. The latter provides cybersecurity services that are focused on filtering out spyware from emails. Cloudflare paid $162 million for the purchase. Per Cloudflare, companies lose more than $2 billion every year from malicious phishing and business email compromise campaigns. The firm aims to tap this market with the Area 1 purchase.
On May 10, Truist analyst Josh Fishbein maintained a Buy rating on Cloudflare, Inc. (NYSE:NET) stock but lowered the price target to $100 from $140, identifying rate hikes, geopolitical events, and recession fears as some of the headwinds for the software sector.
At the end of the fourth quarter of 2021, 55 hedge funds in the database of Insider Monkey held stakes worth $1.5 billion in Cloudflare, Inc. (NYSE:NET), up from 50 in the previous quarter worth $958 million. Cathie Wood boosted her stake in the company by 98% in Q1 2022.
In its Q4 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and Cloudflare, Inc. (NYSE:NET) was one of them. Here is what the fund said:
“Cloudflare, Inc. (NYSE:NET) has an ambitious mission of helping to build a better internet by providing a broad range of network services to businesses of all sizes to help make their networks more secure, more reliable and less costly. The Cloudflare platform has been built from the ground up ona single software stack with a “serverless” network architecture, which has positioned the company to quickly expand its product offerings and network using commodity network hardware. By doing so, the company provides its customers with a flexible, scalable and affordable network platform.
The stock outperformed after the company reported a robust third quarter that exceeded expectations across key metrics. Cloudflare, Inc. (NYSE:NET) also raised its fiscal year 2021 guidance by 3%. The outperformance was driven by strong customer growth, particularly from large customers, as well as the adoption of new products by existing customers. The company added 170 large customers compared to 143 during the second quarter. Cloudflare also stated that the fourth quarter was off to a strong start including a new $1 million annual contract with a large social networking company and an $8 million deal with a large video conferencing service.”
7. FARO Technologies, Inc. (NASDAQ:FARO)
Number of Hedge Fund Holders: 10
Percentage Increase in Stake During Q1: 143%
FARO Technologies, Inc. (NASDAQ:FARO) markets electronic equipment and services. The hedge fund of Cathie Wood entered the second quarter of 2022 with 180,147 shares of FARO Technologies, Inc. (NASDAQ:FARO) worth $9.3 million in the portfolio, comprising 0.03% of the total securities. The company has been a constant feature in the ARK portfolio, with a minor break in late 2017, since the fourth quarter of 2016. The fund has made significant additions to the stake in the last two quarters.
On April 28, Needham analyst James Ricchiuti kept a Buy rating on FARO Technologies, Inc. (NASDAQ:FARO) stock and lowered the price target to $50 from $72, noting that the firm had posted weak first quarter earnings.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Royce & Associates is a leading shareholder in FARO Technologies, Inc. (NASDAQ:FARO), with 1.1 million shares worth more than $60 million.
6. Monday.com Ltd. (NASDAQ:MNDY)
Number of Hedge Fund Holders: 25
Percentage Increase in Stake During Q1: 171%
Monday.com Ltd. (NASDAQ:MNDY) is a systems software firm. At the end of the first quarter of 2022, ARK owned 207,991 shares of the company worth $32.8 million, representing 0.13% of the portfolio. The stock is a relatively new addition to the ARK profile. The fund first purchased a stake in the firm during the third quarter of 2021. It bought over 16,000 shares at an average price of $294.08 per share for the stake. It has since added to that holding, increasing its stake in the firm by 354% and 171%.
In late February, Needham analyst Scott Berg kept a Buy rating on Monday.com Ltd. (NASDAQ:MNDY) stock and lowered the price target to $230 from $420, noting that the multiple compression along the software sector was one of the main reasons behind the target decrease.
At the end of the fourth quarter of 2021, 25 hedge funds in the database of Insider Monkey held stakes worth $821 million in Monday.com Ltd. (NASDAQ:MNDY), compared to 17 in the preceding quarter worth $495 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Monday.com Ltd. (NASDAQ:MNDY) is one of the growth stocks attracting the attention of institutional investors.
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Disclosure. None. Cathie Wood Doubled Her Stakes in These 10 Stocks in 2022 is originally published on Insider Monkey.
