In this article, we discuss the 5 best green energy stocks in Cathie Wood’s portfolio. If you want to read our detailed analysis of Cathie Wood’s hedge fund, go directly and read Cathie Wood Portfolio: Green Energy Stock Picks.
5. PayPal Holdings, Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 123
ARK Investment Management started investing in PayPal Holdings, Inc. (NASDAQ:PYPL) during Q4 of 2016. Currently, the hedge fund holds a $198.2 million stake in the company, which represents 0.47% of the hedge fund’s 13F portfolio.
PayPal Holdings, Inc. (NASDAQ:PYPL) aims to achieve 100% renewable energy for all its leased and owned data centers by 2023. Moreover, the company’s Zettle Ocean Reader card is made from recycled plastics. This November, UBS started its coverage on PayPal Holdings, Inc. (NASDAQ:PYPL) with a Buy rating and a $263 price target, highlighting a buying opportunity in the stock’s recent pullback.
Of the 867 hedge funds tracked by Insider Monkey, 123 hedge funds had positions in PayPal Holdings, Inc. (NASDAQ:PYPL) in Q3, compared with 143 in the previous quarter. The consolidated value of these stakes is over $12.8 billion.
Baron Funds recently published its Q3 2021 investor letter and mentioned PayPal Holdings, Inc. (NASDAQ:PYPL) in it. Here is what the firm has to say:
“PayPal Holdings, Inc. enables digital payments for consumers and merchants worldwide. Shares fell on quarterly financial results and guidance that were below investor expectations due to a faster roll-off of eBay business, which should only be a temporary headwind. PayPal also announced the acquisition of Paidy, the leading buy-now-pay-later provider in Japan, which expands PayPal’s addressable market into a fast-growing category. We remain investors because we believe PayPal is a prime beneficiary of the secular growth of e-commerce and digital financial services.”
4. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)
Number of Hedge Fund Holders: 15
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is an engineering services company that specializes in directed-energy weapons, cyber security, missile defense, electronics, and satellite communications.
In its Q3 earnings report, Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) posted an EPS of $0.09, beating consensus by $0.02. Ken Herbert of RBC Capital asserted that the company is well-positioned to benefit from increased spending on technologies. In October, the analyst initiated his coverage on Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) with an Outperform rating and a $28 price target. In Q3, ARK Investment Management increased its stake in the company by 15%, which now represents 0.51% of Cathie Wood’s portfolio.
In Q3, 15 hedge funds tracked by Insider Monkey held stakes in Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), down from 18 in the previous quarter. These stakes are worth over $232.8 million.
3. Iridium Communications Inc. (NASDAQ:IRDM)
Number of Hedge Fund Holders: 24
Iridium Communications Inc. (NASDAQ:IRDM), a global satellite communications company, experienced a positive hedge fund sentiment in Q3, as 24 hedge funds tracked by Insider Monkey were bullish on the company, up from 18 in the previous quarter. These stakes are valued at roughly $685 million.
ARK Investment Management started building its position in Iridium Communications Inc. (NASDAQ:IRDM) during Q3 of 2019. As of Q3 2021, the hedge fund holds roughly 12 million shares in the company, which accounts for 1.14% of its 13F portfolio. In Q3, Iridium Communications Inc. (NASDAQ:IRDM) reported over 1.69 million paid subscribers, up from 1.43 million during the same period last year.
The company’s newly developed battery, Iridium Edge Solar, enables the long-term deployment of management solutions by harvesting solar energy.
Following the company’s Q3 earnings beat, BWS Financial upgraded Iridium Communications Inc. (NASDAQ:IRDM) to Buy, with a $60 price target, up from $37. As of the close of December 7, the stock’s 12-month returns stood at 19.85%.
2. Square, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 98
Square, Inc. (NYSE:SQ) aims to achieve carbon neutrality by 2030. The company’s ‘Bitcoin Clean Energy Investment Initiative’ has committed $10 million to support companies that would aid the adoption of renewables within the bitcoin ecosystem.
Square, Inc. (NYSE:SQ) is the sixth-largest holding of ARK Investment Management and represents 3.52% of the hedge fund’s 13F portfolio as of Q3. The company earned $3.84 billion in revenue in Q3, up 26.7% from the prior-year quarter. Square, Inc. (NYSE:SQ), among other fintech companies, was recently appreciated by analysts as it has the ability to replace traditional credit card payments through its digital services.
As of Q3 2021, 98 hedge funds tracked by Insider Monkey reported owning an $8.8 billion worth of stake in Square, Inc. (NYSE:SQ). In the previous quarter, 94 hedge funds held stakes in the company. Along with ARK Investment Management, Lone Pine Capital was one of the largest shareholders of Square, Inc. (NYSE:SQ) in Q3, holding shares worth $1.3 billion.
RiverPark Funds mentioned Square, Inc. (NYSE:SQ) in its Q1 2021 investor letter. Here is what the firm has to say:
“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).
The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.
We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) has been developing comprehensive clean energy products since its inception, including battery energy storage, solar panels, and solar roof tiles.
Cathie Wood has been bullish on Tesla, Inc. (NASDAQ:TSLA) since the fourth quarter of 2016 when she started building a position in the company with shares worth $4 million. As of Q3, Tesla, Inc. (NASDAQ:TSLA) is the largest holding of ARK Investment Management and accounts for 7.36% of the hedge fund’s 13F portfolio. Recently, UBS raised its price target on Tesla, Inc. (NASDAQ:TSLA) to $1,000, with a Neutral rating on the shares.
As of Q3 2021, 60 hedge funds tracked by Insider Monkey were bullish on Tesla, Inc. (NASDAQ:TSLA), the same as in the previous quarter. These stakes are valued at over $10.6 billion, up from $9.2 billion in Q2.
Baron Funds mentioned Tesla, Inc. (NASDAQ:TSLA) in its Q3 2021 investor letter. Here is what the firm has to say:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock contributed as Tesla continued to present strong deliveries growth and a meaningful improvement in profitability despite a complex supply-chain environment. Demand remains robust, new localized manufacturing capacity is expected to support more efficient growth, and the autonomous program is accelerating. We expect Tesla’s growing vehicle offering, battery technology, and energy businesses to drive meaningful growth opportunities.”
You can also take a look at 10 Best Stocks to Buy in 2021 According to Cathie Wood and 10 Best Cheap Tech Stocks to Buy According to Cathie Wood
