In this article, we discuss 10 stocks under $10 in Cathie Wood’s latest portfolio. If you want to read about some more stocks in the Wood portfolio, go directly to Cathie Wood’s Latest Portfolio: 5 Stocks Under $10.
Growth investors like Cathie Wood of ARK Investment Management have not had a good start to the year. The fortunes of ARK Innovation ETF, the flagship fund offered by the hedge fund, have slid dramatically since the beginning of 2022 as inflation rises and the Fed increases interest rates to keep soaring prices under control, pushing investors away from risky offerings. Since January 2022, ARK Innovation ETF has fallen by 56%, with 10% of this decline coming in a single day last week. Wood seems unfazed by the drop.
The famous investor, who was one of the best-performing hedge fund managers of the pandemic-ravaged 2020, has doubled down on her bets on growth stocks like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX) in the past few months, using the phrase “deep value territory” to justify her buying spree. The inflows into her fund have also continued to grow. So far in 2022, the net inflows into her fund stand at around $1.5 billion despite the fact that the short interest on it is near 15%.
Nate Geraci, the president of The ETF Store, an advisory firm, told Bloomberg on May 14 that the decision of Wood to stick with disruptive tech during this turmoil would ultimately end up improving the “long-term visibility” of her fund. Geraci termed the decision “attractive to a certain segment of investors”. The portfolio value of her hedge fund has fallen by about $10 billion in the last three months. During these months, Wood has been busy buying up stocks at bargain prices, some of which are cheaper than $10 per share.
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 which were trading at below $10 per share, as of May 16, 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’s Latest Portfolio: Stocks Under $10
10. Pearson plc (NYSE:PSO)
Number of Hedge Fund Holders: 8
Share Price as of May 16: $9.17
Pearson plc (NYSE:PSO) provides educational services. Latest data shows that ARK owned 18,119 shares of Pearson plc (NYSE:PSO) at the end of the first quarter of 2022, worth $181,000. The stock has slid in the past few weeks after investment firm Apollo abandoned a takeover bid worth $9.5 billion after Pearson rejected the offer. The offer was the third and final one that Apollo was prepared to make for the education company. Pearson believes the offer “undervalues” the future potential of the firm.
On April 10, Goldman Sachs analyst Lisa Yang reinstated coverage of Pearson plc (NYSE:PSO) stock with a Buy rating and a price target of GBP 984, noting that the higher education business of the firm was set to inflect positive growth in 2022.
At the end of the fourth quarter of 2021, 8 hedge funds in the database of Insider Monkey held stakes worth $22 million in Pearson plc (NYSE:PSO), the same as in the preceding quarter worth $15 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Pearson plc (NYSE:PSO) is one of the stocks on the radar of elite investors.
9. Natura & Co Holding S.A. (NYSE:NTCO)
Number of Hedge Fund Holders: 9
Share Price as of May 16: $6.96
Natura & Co Holding S.A. (NYSE:NTCO) makes and sells cosmetics, fragrances, and personal hygiene products. Securities filings show that ARK owned 16,716 shares of Natura & Co Holding S.A. (NYSE:NTCO) at the end of March 2022 worth $186,000. The fund slashed its stake in the firm by 21% in the first quarter of 2022 compared to filings for the fourth quarter of 2021. ARK had first purchased a stake in the company during the fourth quarter of 2021 comprising over 21,000 shares bought at an average price of $12.20 per share.
On March 9, JPMorgan analyst Jos Giordano upgraded Natura & Co Holding S.A. (NYSE:NTCO) stock to Neutral from Underweight with a price target of $10, noting that the valuation of the stock already reflected risks around execution and concerns on sales.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Natura & Co Holding S.A. (NYSE:NTCO), with 961,237 shares worth more than $10 million.
At the end of the fourth quarter of 2021, 9 hedge funds in the database of Insider Monkey held stakes worth $21 million in Natura & Co Holding S.A. (NYSE:NTCO), up from 6 in the preceding quarter worth $46 million.
8. PyroGenesis Canada Inc. (NASDAQ:PYR)
Number of Hedge Fund Holders: 4
Share Price as of May 16: $1.85
PyroGenesis Canada Inc. (NASDAQ:PYR) develops plasma processes and systems. Regulatory filings reveal that ARK owned 134,107 shares of PyroGenesis Canada Inc. (NASDAQ:PYR) at the end of the first quarter of 2022, worth $336,000. The fund increased its stake in the firm by 18% in early 2022 compared to fourth quarter filings for 2021. PyroGenesis has been a constant feature in the ARK portfolio since the first quarter of 2021. The fund reduced its stake in the firm in two of the last four quarters.
In early February, PyroGenesis Canada Inc. (NASDAQ:PYR) announced that it had signed an agreement for a purchase order for the first of three 10,000 TPY Drosrite systems. The deal is estimated to be worth $3 million.
At the end of the fourth quarter of 2021, 4 hedge funds in the database of Insider Monkey held stakes worth $651,000 in PyroGenesis Canada Inc. (NASDAQ:PYR), up from 1 in the previous quarter worth $473,000.
7. Eastman Kodak Company (NYSE:KODK)
Number of Hedge Fund Holders: 10
Share Price as of May 16: $4.29
Eastman Kodak Company (NYSE:KODK) operates as a technology company. Latest 13F filings show that ARK owned over 81,536 shares of Eastman Kodak Company (NYSE:KODK) at the end of March 2022, worth $534,000. The fund increased its stake in the firm by 29% in the first three months of 2022 compared to the filings for the fourth quarter of 2021. The company has featured in the ARK portfolio, with minor exceptions, since late 2016. ARK has added to the holding in the last two quarters.
Eastman Kodak Company (NYSE:KODK) stock has nosedived in recent weeks, falling to near 52-week lows, as supply chain problems affect the earnings of the firm. However, despite the challenges, the company posted a 9% year-on-year increase in revenue in the Q1 2022.
Among the hedge funds being tracked by Insider Monkey, Atlanta-based investment firm GMT Capital is a leading shareholder in Eastman Kodak Company (NYSE:KODK), with 981,400 shares worth more than $6.4 million.
At the end of the fourth quarter of 2021, 10 hedge funds in the database of Insider Monkey held stakes worth $11 million in Eastman Kodak Company (NYSE:KODK), compared to 11 in the preceding quarter worth $32 million.
In its Q4 2021 investor letter, Longleaf Partners Fund, an asset management firm, highlighted a few stocks and Eastman Kodak Company (NYSE:KODK) was one of them. Here is what the fund said:
“Eastman Kodak Company (NYSE:KODK) (-18%, -0.83%; -12%, -0.54%), the global technology company focused on chemicals and print, in which we own convertible preferreds, was a detractor, despite excellent operating results at Eastman Kodak Company (NYSE:KODK). Our appraisal of Kodak’s value surged 12% last quarter up to $10/share due to strong pricing in the printing plates and film segments. Kodak’s new chemical-free Sonora plate business grew 35% and is much more environmentally sustainable than the competition. Digital Printing, a razor/razor blades annuity business, approached breakeven, while Kodak’s next generation Prosper product line grew 17%. The Licensing segment, which is a surprisingly large part of appraised value, again grew steadily with massive operating margins.”
6. SomaLogic, Inc. (NASDAQ:SLGC)
Number of Hedge Fund Holders: 37
Share Price as of May 16: $5.42
SomaLogic, Inc. (NASDAQ:SLGC) is a clinical diagnostics firm. Latest 13F filings show that ARK owned 300,000 shares of SomaLogic, Inc. (NASDAQ:SLGC) at the end of March 2022, worth $642,000. The company has a diverse pipeline of drugs tied to the protein platform it markets. This platform allows for the study and engineering of different proteins. As other firms use this platform to conduct their research, they can grow revenue while keeping overall costs low, a rare combination in the biotech sector.
On April 13, Canaccord analyst Kyle Mikson maintained a Buy rating on SomaLogic, Inc. (NASDAQ:SLGC) stock and lowered the price target to $15 from $19, underlining the growth potential of the firm that was not reflected in current levels.
At the end of the fourth quarter of 2021, 37 hedge funds in the database of Insider Monkey held stakes worth $630 million in SomaLogic, Inc. (NASDAQ:SLGC), the same as in the previous quarter worth $647 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), SomaLogic, Inc. (NASDAQ:SLGC) is one of the stocks that hedge funds are buying.
Click to continue reading and see Cathie Wood’s Latest Portfolio: 5 Stocks Under $10.
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Disclosure. None. Cathie Wood’s Latest Portfolio: 10 Stocks Under $10 is originally published on Insider Monkey.
