In this article, we discuss the 5 small-cap stock picks of Cathie Wood’s 2022 portfolio. If you want to read our detailed analysis of Wood’s hedge fund performance, stock selection and history, go directly to Cathie Wood’s 2022 Portfolio: 10 Small-Cap Stock Picks.
5. Veracyte, Inc. (NASDAQ:VCYT)
ARK Investment Management’s 13 Portfolio: 1%
ARK Investment Management’s Stake Value: $241.4 million
Number of Hedge Fund Holders: 16
Market Cap: $1.32 billion
Up next on the list of small-cap stocks to buy according to disruptive tech investor Cathie Wood is Veracyte, Inc. (NASDAQ:VCYT). The firm deals in the provision of medical diagnostics. Its products include treatments for thyroid cancer, lung cancer screening and diagnosis of pulmonary fibrosis. Cathie Wood’s ARK Investment Management owned 8.75 million shares of Veracyte, Inc. (NASDAQ:VCYT) at the close of the first quarter, with a price tag of $241.4 million which represented 1% of its total portfolio.
On May 4, Needham analyst Mike Matson maintained a ‘Buy’ rating on Veracyte, Inc. (NASDAQ:VCYT) shares and revised the price target to $26 from $31. Matson noted that the firm has a long runway of strong growth, and is poised to become one of the leaders in the cancer diagnostics space. The company also beat expectations in its Q1 earnings, with organic revenue growth improving to 9% from 5% in the fourth quarter.
Veracyte, Inc. (NASDAQ:VCYT) posted an EPS of -$0.20 for the first quarter, surpassing analysts’ expectations by $0.03. The company recorded quarterly revenue of $67.8 million, beating estimates by $5.9 million and increasing 84.7% in comparison to the year-ago quarter.
16 hedge funds were long Veracyte, Inc. (NASDAQ:VCYT) at the end of Q4 2021, with combined positions worth $442 million. This is down from 21 hedge funds in the previous quarter.
Artisan Partners, an investment firm, discussed Veracyte, Inc. (NASDAQ:VCYT) in its Q2 2021 investor letter, stating:
“Among our bottom contributors (includes) Veracyte. Veracyte develops and markets molecular tests designed to minimize ambiguity in the treatment of patients with cancer. These tests can reduce unnecessary surgeries and help put cancer patients at ease when the decision is to “watch and wait.” Shares have been pressured amid a recent investment cycle (acquired Decipher and HalioDX) and a resurgence of the pandemic earlier this year weighing on testing volumes. In addition, the company’s founder and CEO recently announced she was moving to Executive Chair. Her replacement is the former CFO of Illumina, who is very knowledgeable in invitro diagnostics and played a critical role in Illumina’s international expansion efforts (which we expect him to pursue at Veracyte). We are maintaining our position as patients return to the clinic for testing and as management executes on its strong R&D pipeline, including the upcoming launch of a nasal swab lung cancer test. Longer-term, the company is well-positioned to expand internationally as it ports its growing menu of tests onto the recently acquired nCounter instrument.”
