In this article, we discuss the 10 stocks Cathie Wood is selling. If you want to skip our detailed analysis of these stocks, go directly to Cathie Wood Is Selling These 5 Stocks.
There are few institutional investors who are willing to take risks on high growth stocks because of the price volatility and the nature of the business where innovation rules the day. However, Cathie Wood, the chief of ARK Investment Management, has become one of the few on Wall Street who seem to have mastered the art of using investments as a tool for change and making handsome returns in the process. Wood manages over $53 billion in assets at her hedge fund with the top 10 holdings comprising 35% of the portfolio.
These holdings are concentrated in high-growth domains like technology and healthcare. This is also one reason why Wood has become a champion of retail investors, an increasingly important market force in recent months, who also prefer investments similar to those made by Wood. In 2020, the flagship ARK Innovation ETF of Wood returned more than 152% to investors. Though the value of the ETF has hit some roadblocks in recent weeks, Wood has refused to back down from her strategy, instead doubling down on growth-related investments.
Some of the top holdings in the investment portfolio of ARK Investment Management at the end of the second quarter of 2021 were Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), among others. Wood founded ARK Investment Management in 2014 after a long career in finance. Her fund has now become one of the most elite ones in the US. The success of Wood is an exception in the wider finance world that is reeling from tech-enabled disruption.
Cathie Wood of ARK Investment Management
Our Methodology
With this context in mind, here is our list of the 10 stocks Cathie Wood is selling. These were ranked according to the investment portfolio of ARK Investment Management at the end of the second quarter of 2021.
Only those stocks were selected that the hedge fund sold off entirely in the second quarter of 2021. The latest analyst ratings of each company are also discussed to provide readers with some more context about their investment decisions.
The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The stocks are arranged according to the number of hedge fund holders in each company.
Why should we care about Cathie Wood’s portfolio moves? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Cathie Wood Is Selling These Stocks
10. SBI Holdings, Inc. (OTC: SBHGF)
Number of Hedge Fund Holders: N/A
SBI Holdings, Inc. (OTC: SBHGF) is placed tenth on our list of 10 stocks Cathie Wood is selling. The company provides online financial services and is headquartered in Tokyo.
SBI Holdings, Inc. (OTC: SBHGF) has a market cap of over $6 billion and posted close to $5 billion in annual revenue in the past fiscal year. It was founded in 1999 and employs more than 9,000 people across the globe.
SBI Holdings, Inc. (OTC: SBHGF) has a seven year history of dividend growth. The 52-week price range of the stock lies between $22 and $37. The revenue of the company is growing at a compounded annual growth rate of over 16%.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), SBI Holdings, Inc. (OTC: SBHGF) is one of the stocks Cathie Wood has been offloading.
9. InterCure Ltd. (NASDAQ: INCR)
Number of Hedge Fund Holders: N/A
InterCure Ltd. (NASDAQ: INCR) is ranked ninth on our list of 10 stocks Cathie Wood is selling. The company is headquartered in Israel and makes and sells cannabis products.
InterCure Ltd. (NASDAQ: INCR) has a market cap of over $318 million and posted more than $20 million in revenue last year. It was founded in 1994. The volume of the stock is 1,531,006 and the 52-week price range lies between $3 and $40.
In earnings results for the second quarter, posted on September 3, InterCure Ltd. (NASDAQ: INCR) reported a revenue of NIS 45 million, an increase of more than 300% compared to the revenue over the same period last year.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), InterCure Ltd. (NASDAQ: INCR) is one of the stocks Cathie Wood has been getting rid of.
8. BiondVax Pharmaceuticals Ltd. (NASDAQ: BVXV)
Number of Hedge Fund Holders: 2
BiondVax Pharmaceuticals Ltd. (NASDAQ: BVXV) is an Israel-based biopharmaceutical company that develops and markets treatments for infectious diseases. It is placed eighth on our list of 10 stocks Cathie Wood is selling.
On August 26, BiondVax Pharmaceuticals Ltd. (NASDAQ: BVXV) posted earnings for the second quarter, reporting earnings per share of NIS 0.01. The cash and cash equivalents over the period were NIS 39 million, down from NIS 48 million over the same period last year.
At the end of the second quarter of 2021, 2 hedge funds in the database of Insider Monkey held stakes worth $292,000 in BiondVax Pharmaceuticals Ltd. (NASDAQ: BVXV), down from 3 in the preceding quarter worth $190,000.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), BiondVax Pharmaceuticals Ltd. (NASDAQ: BVXV) is one of the stocks Cathie Wood has been selling.
7. Phreesia, Inc. (NYSE: PHR)
Number of Hedge Fund Holders: 26
Phreesia, Inc. (NYSE: PHR) is a North Carolina-based company that markets software and payments solutions for the healthcare industry. It is ranked seventh on our list of 10 stocks Cathie Wood is selling.
On September 3, investment advisory Raymond James kept an Outperform rating on Phreesia, Inc. (NYSE: PHR) stock and raised the price target to $75 from $65, noting the firm was taking steps to position itself to meet long-term growth targets.
Out of the hedge funds being tracked by Insider Monkey, Maryland-based investment firm Rock Springs Capital Management is a leading shareholder in Phreesia, Inc. (NYSE: PHR) with 960,000 shares worth more than $58 million.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Phreesia, Inc. (NYSE: PHR) is one of the stocks Cathie Wood has been removing from her portfolio. .
6. LendingTree, Inc. (NASDAQ: TREE)
Number of Hedge Fund Holders: 30
LendingTree, Inc. (NASDAQ: TREE) is placed sixth on our list of 10 stocks Cathie Wood is selling. The company owns and operates an online consumer platform and is headquartered in North Carolina.
On May 20, investment advisory Northland upgraded LendingTree, Inc. (NASDAQ: TREE) stock to Outperform from Market Perform with a price target of $225, underlining that the resilience of the firm in the mortgage industry might be better than feared.
At the end of the second quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $346 million in LendingTree, Inc. (NASDAQ: TREE), up from 25 in the previous quarter worth $568 million.
In its Q1 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and LendingTree, Inc. (NASDAQ: TREE) was one of them. Here is what the fund said:
“We also exited our position in LendingTree. LendingTree is a two-sided marketplace in the consumer financial services vertical that connects borrowers with lenders. The company has built a brand over more than 15 years that offers savings to borrowers by having banks compete. The company had been acquired by IAC before the financial crisis and then was spun out in the worst of the global financial crisis (GFC). The company had a resurgence following the GFC by adding value in the mortgage market. The company used the strong cash flow generation in the model to expand into adjacencies and diversify the revenue base. The product offering has expanded over the years mostly through acquisition and includes credit cards, personal loans, and insurance.
This diversified strategy had paid dividends amid demand shocks, like the decline in demand for mortgages 18 months ago and then the demand destruction caused by the pandemic. However, diversification has some downsides. While it protects the company from major demand destruction shocks, in our opinion, it has made it hard to drive consistent long-term compounding as products have come in and out of favor due to macro factors. While we think that LendingTree has solved a unique problem, we do not believe it has the same compounding potential going forward and have exited the position in accordance with our process.”
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Disclosure. None. Cathie Wood Is Selling These 10 Stocks is originally published on Insider Monkey.
