Cathie Wood is Buying These 10 Stocks on the Dip

In this article, we discuss the 10 stocks that Cathie Wood is buying on the dip.

The technology-heavy NASDAQ Composite has taken a severe beating in the past few weeks, plunging close to 8% in the past month to drop down nearly 28% year-to-date as recession fears and historical tightening by the Federal Reserve batter growth stocks. One of the biggest losers from this developing situation has been Cathie Wood of ARK Investment Management, who has seen the value of her equity portfolio decline by nearly $6 billion between March and June 2022. Her flagship ARK Innovation ETF is down over 57% year-to-date. 

Wood, famously bullish on growth names like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), is using the market downturn to go on a buying binge. Per data compiled by news publication Bloomberg on September 13, one of the worst days for the NASDAQ Composite since March 2020, her investment firm made new purchases in 27 growth stocks across eight different ETFs. Wood has snapped up the shares of automaker General Motors Company (NYSE:GM) for the first time since May. 

Wood has criticized the decisions of the central bank to raise interest rates as she seeks some cover against her risky bets. On September 13, Wood said that the decision of the Fed to raise rates “will prove a mistake” as deflationary pressures were building. Wood cited falling commodity and freight charges, as well as stable gold prices, to make the claim that the supply chain issues responsible for inflation were moderating, and a recession in the United States economy would bring down prices even further.

Our Methodology

These were picked from the investment portfolio of ARK Investment Management at the end of the second quarter of 2022. Only equities in which the hedge fund increased stakes between March and June, compared to first quarter filings, were selected. The stocks that registered a more than 50% decline in share price since the start of the year were preferred for the list. 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 the second quarter of 2022 was used to quantify the popularity of each stock in the hedge fund universe. 

Cathie Wood is Buying These Stocks on the Dip

10. Fiverr International Ltd. (NYSE:FVRR)

Number of Hedge Fund Holders: 16

Percentage Increase in Stake During Q2 2022: 23% 

Loss in Share Price Year-to-Date as of September 21: 71%

Fiverr International Ltd. (NYSE:FVRR) operates an online marketplace worldwide. At the end of June 2022, ARK Investment Management owned 40,565 shares in Fiverr International Ltd. worth $1.7 million, representing 0.01% of the portfolio. 

On August 5, investment advisory Needham maintained a Buy rating on Fiverr International Ltd. stock and raised the price target to $50 from $40. Analyst Bernie McTernan issued the ratings update. 

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Millennium Management is a leading shareholder in Fiverr International Ltd., with 678,656 shares worth more than $23 million. 

Just like Tesla, Inc., Sea Limited, and Roblox Corporation, Fiverr International Ltd. is one of the stocks that Cathie Wood is buying on the dip. 

9. XPeng Inc. (NYSE:XPEV)

Number of Hedge Fund Holders: 24  

Percentage Increase in Stake During Q2 2022: 2% 

Loss in Share Price Year-to-Date as of September 21: 68%

XPeng Inc. (NYSE:XPEV) designs, develops, manufactures, and markets smart electric vehicles in China. The hedge fund chaired by Wood owned close to 946,650 shares of XPeng Inc. at the end of June 2022 worth $22 million, representing 0.13% of the portfolio.

On August 24, investment advisory Citi maintained a Buy rating on XPeng Inc. stock and lowered the price target to $27.87 from $51.59. Analyst Jeff Chung issued the ratings update. 

At the end of the second quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $618.7 million in XPeng Inc., compared to 26 in the preceding quarter worth $783.9 million. 

8. monday.com Ltd. (NASDAQ:MNDY)

Number of Hedge Fund Holders: 25  

Percentage Increase in Stake During Q2 2022: 14% 

Loss in Share Price Year-to-Date as of September 21: 56%

monday.com Ltd (NASDAQ:MNDY), together with its subsidiaries, develops software applications. Regulatory filings reveal that ARK owned over 236,620 shares of monday.com Ltd at the end of June 2022 worth $26 million, representing 0.15% of the total portfolio. 

On September 12, Loop Capital analyst Mark Schappel initiated coverage of monday.com Ltd stock with a Buy rating and a price target of $175, noting the firm was a likely winner in the emerging digital teamwork tools market. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management is a leading shareholder in monday.com Ltd, with 778,126 shares worth more than $80 million. 

7. InMode Ltd. (NASDAQ:INMD)

Number of Hedge Fund Holders: 27 

Percentage Increase in Stake During Q2 2022: 29% 

Loss in Share Price Year-to-Date as of September 21: 52%

InModel Ltd. (NASDAQ:INMD) develops, manufactures, and markets minimally invasive aesthetic medical products based on its proprietary radio frequency assisted lipolysis and deep sub-dermal fractional radio frequency technologies. Securities filings reveal that ARK owned 73,637 shares of InMode Ltd. at the end of the second quarter of 2022 worth $1.9 million, representing a very small portion of the portfolio. 

On August 29, Baird analyst Jeff Johnson maintained an Outperform rating on InMode Ltd. stock and raised the price target to $53 from $44, noting that the demand for the products of the firm would improve in the coming months. 

Among the hedge funds being tracked by Insider Monkey, New York-based firm Renaissance Technologies is a leading shareholder in InModel Ltd., with 3.1 million shares worth more than $69 million. 

In its Q3 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and InModel Ltd. was one of them. Here is what the fund said:

“InModel Ltd. was among the topic contributors to performance. InMode designs, develops, manufactures and commercializes innovative minimally invasive and non-invasive aesthetic medical products. InMode’s platforms harness novel radio frequency (RF) technology to enable emerging minimally invasive procedures that bridge the gap between temporary treatments like facials and more invasive surgical procedures like facelifts across several categories of surgical specialties such as plastic surgery, gynaecology, dermatology, ophthalmology and otolaryngology (ear, nose and throat care).

The aesthetics market is seeing strong tailwinds coming out of the Covid-19 pandemic. These tailwinds include the “Zoom effect,” or dissatisfaction with one’s personal appearance after viewing one’s own face on Zoom, which has resulted in more people deciding to undergo aesthetic procedures. De-stigmatization of aesthetics procedures, aided by social media platforms, is also supportive of InMode’s results. Between the strong growth of its existing product lines and the anticipated launch of two new products, investors perceive InMode as being well positioned to capitalize on the broader strength of the aesthetics market, which is a key reason shares outperformed in the third quarter.”

6. Roku, Inc. (NASDAQ:ROKU)

Number of Hedge Fund Holders: 34  

Percentage Increase in Stake During Q2 2022: 23% 

Loss in Share Price Year-to-Date as of September 21: 70%

Roku, Inc. (NASDAQ:ROKU) operates a TV streaming platform. The hedge fund chaired by Wood owned close to 10.1 million shares of Roku, Inc. at the end of June 2022 worth $962 million. 

On September 8, investment advisory Pivotal Research upgraded Roku, Inc. stock to Hold from Sell with a price target of $60. Analyst Jeffrey Wlodarczak issued the ratings update. 

At the end of the second quarter of 2022, 34 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Roku, Inc., compared to 34 in the preceding quarter worth $1.7 billion. 

In addition to Tesla, Inc., Sea Limited, and Roblox Corporation, Roku, Inc. is one of the stocks that Cathie Wood is buying on the dip. 

In its Q2 2022 investor letter, Saga Partners, an asset management firm, highlighted a few stocks and Roku, Inc. was one of them. Here is what the fund said:

“The Portfolio first bought Roku, Inc. in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…

In their most recent results, Roku, Inc. reported softer advertising dollars as nearly half of advertisers paused ad campaigns in response to macro uncertainty. While advertising will come and go, the key is that Roku can continue to gather eyeballs and then the rest will work itself out in the long run. In my opinion, the market is underappreciating the power of Roku’s competitive advantage in the TV ecosystem and ability to scale far into the future.…(read more)

5. Roblox Corporation (NYSE:RBLX)

Number of Hedge Fund Holders: 38    

Percentage Increase in Stake During Q2 2022: 22% 

Loss in Share Price Year-to-Date as of September 21: 63% 

Roblox Corporation develops and operates an online entertainment platform. Regulatory filings reveal that ARK owned over 7.4 million shares of Roblox Corporation at the end of June 2022 worth $221 million, representing 1.31% of the total portfolio.

On September 16, Needham analyst Bernie McTernan maintained a Buy rating on Roblox Corporation stock and lowered the price target to $53 from $55, noting that advertising presented a substantial revenue opportunity for the firm. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Roblox Corporation, with 11.6 million shares worth more than $380 million.

In its Q4 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Roblox Corporation was one of them. Here is what the fund said:

“Roblox Corporation got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in virtual world. Apple in its iOS 14.5 rolled out an impactful change for digital advertising landscape by requiring all apps to ask users to “opt in”.

4. Coinbase Global, Inc. (NASDAQ:COIN)

Number of Hedge Fund Holders: 29  

Percentage Increase in Stake During Q2 2022: 29%  

Loss in Share Price Year-to-Date as of September 21: 72%

Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto economy. Latest 13F data shows that ARK Investment Management owned 8.9 million shares of Coinbase Global, Inc. at the end of the second quarter of 2022 worth $699 million, representing 4.13% of the portfolio. 

On September 14, investment advisory JPMorgan maintained a Neutral rating on Coinbase Global, Inc. stock and raised the price target to $78 from $64. Analyst Kenneth Worthington issued the ratings update. 

At the end of the second quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Coinbase Global, Inc., compared to 46 in the preceding quarter worth $2.3 billion. 

In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. was one of them. Here is what the fund said:

“Coinbase Global, Inc. fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”

3. Cloudfare, Inc. (NYSE:NET)

Number of Hedge Fund Holders: 41    

Percentage Increase in Stake During Q2 2022: 33% 

Loss in Share Price Year-to-Date as of September 21: 51%

Cloudfare, Inc. (NYSE:NET) operates as a cloud services provider that delivers a range of services to businesses worldwide. According to regulatory filings, ARK Investment Management owned 324,635 shares in Cloudflare, Inc. at the end of June 2022 worth $18 million, representing 0.10% of the portfolio.

On September 8, Cantor Fitzgerald analyst Jonathan Ruykhaver initiated coverage of Cloudflare, Inc. stock with a Neutral rating and a price target of $65, noting that the firm was a disruptor in the networking and security markets. 

At the end of the second quarter of 2022, 41 hedge funds in the database of Insider Monkey held stakes worth $541 million in Cloudfare, Inc., compared to 44 in the previous quarter worth $1.2 billion.

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Cloudfare, Inc. was one of them. Here is what the fund said:

“Despite posting solid quarterly results with 54% revenue growth, and a record addition of 14,000 customers, shares of Cloudflare, Inc., a software infrastructure provider, declined 63% in the quarter along with other fast-growing names in the software universe that penalize current profitability by reinvesting back in their businesses. We believe Cloudflare’s disruptive global platform and unmatched pace of innovation will enable the company to continue to take share across multiple large addressable markets for years to come.”

2. Shopify Inc. (NYSE:SHOP)

Number of Hedge Fund Holders: 60  

Percentage Increase in Stake During Q2 2022: 35% 

Loss in Share Price Year-to-Date as of September 21: 77%

Shopify Inc. (NYSE:SHOP), a commerce company, provides an e-commerce platform and services. The hedge fund chaired by Wood owned close to 1.2 million shares of Shopify Inc. at the end of June 2022 worth $455 million, representing 2.69% of the portfolio. 

On September 8, investment advisory Oppenheimer maintained an Outperform rating on Shopify Inc. stock with a price target of $45. Analyst Ken Wong issued the ratings update. 

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Shopify Inc., with 10.2 million shares worth more than $814 million. 

In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Shopify Inc. was one of them. Here is what the fund said:

“Shopify Inc. is a cloud-based software provider offering an operating system for multi-channel commerce. Shares fell due to continued post-pandemic e-commerce normalization as economies reopen, concerns about competition following Amazon’s announcement of Buy with Prime, as well as the broader sell-off in growth stocks. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth as it currently addresses less than 1% of global commerce spend.”

1. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 102  

Percentage Increase in Stake During Q2 2022: 103,405%

Loss in Share Price Year-to-Date as of September 21: 56%

NVIDIA Corporation (NASDAQ:NVDA) operates as a visual computing firm. Latest data shows that ARK owned close to 675,886 shares of NVIDIA Corporation at the end of June 2022 worth $126 million, representing 0.74% of the total portfolio.

On August 8, Oppenheimer analyst Rick Schafer maintained an Outperform rating on NVIDIA Corporation stock and lowered the price target to $250 from $300, noting that there was a weakness in PC and gaming unit sales for the firm. 

At the end of the first quarter of 2022, 102 hedge funds in the database of Insider Monkey held stakes worth $6.3 billion in NVIDIA Corporation, compared to 110 the preceding quarter worth $10.4 billion. 

In its Q1 2022 investor letter, RiverPark Funds, an asset management firm, highlighted a few stocks and NVIDIA Corporation was one of them. Here is what the fund said:

“NVIDIA Corporation is the leading designer of graphics processing chips (commonly known as GPU’s- graphics processing units), required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming- focused chip vendor to one of the largest semiconductor/software vendors in the world, dominating the core secular growth markets of gaming, data centers and professional visualization. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. For 2021 the company generated 61% revenue growth to $27 billion, expanded its EBITDA margins to over 44% and generated over $8 billion of free cash flow. Over the past five years, the company has generated a cumulative $23 billion of FCF after cumulative capital expenditures of less than $4 billion.

We expect future growth to remain robust as NVIDIA Corporation chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality and advanced artificial intelligence. As with NFLX, we took advantage of the over 40% recent drop in the company’s shares over the last several months to initiate a small position.”

You can also take a peek at 10 Best Healthcare Dividend Stocks to Buy Now and 10 Dividend Stocks with Over 20 Years of Dividend Increases.

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This article is originally published at Insider Monkey.