In this article, we discuss Cathie Wood’s top 5 small-cap stock picks. If you want our detailed analysis of these stocks, go directly to Cathie Wood’s Top 15 Small-Cap Stock Picks.
5. Proto Labs, Inc. (NYSE:PRLB)
ARK Investment Management’s Stake Value: $278,212,000
Percentage of ARK Investment Management’s 13F Portfolio: 0.51%
Market Cap: $1.966 billion
Number of Hedge Fund Holders: 19
Proto Labs, Inc. (NYSE:PRLB) is a Minnesota-based company that manufactures 3D printed, CNC-machined, and injection-molded custom parts for prototyping in medical devices, electronics, appliances, automotives, and consumer products. Proto Labs, Inc. (NYSE:PRLB) has manufacturing plants in Germany, England, and Japan. Proto Labs, Inc. (NYSE:PRLB) ranks fifth on our extensive list of Cathie Wood’s top 15 small-cap stock picks.
Wood’s ARK Investment Management owns 3.03 million shares in Proto Labs, Inc. (NYSE:PRLB), worth $278.2 million, representing 0.51% of Wood’s 13F portfolio.
Proto Labs, Inc. (NYSE:PRLB) announced earnings for the second quarter on July 29. The company reported earnings per share of $0.39, missing estimated EPS by -$0.05. The revenue for Proto Labs, Inc. (NYSE:PRLB) was $123.05 million, which exceeded analysts’ estimates by $0.83 million.
Out of the hedge funds tracked by Insider Monkey, 19 funds were bullish on Proto Labs, Inc. (NYSE:PRLB) at the end of June, up from 18 in the previous quarter. ARK Investment Management is the largest stakeholder in Proto Labs, Inc. (NYSE:PRLB).
The investment management firm, Harding Loevner, mentioned Proto Labs, Inc. (NYSE:PRLB) in its Q1 2021 investor letter. Here is what they said:
“Shares of Protolabs, a provider of 3D printing and other rapid prototyping and mold machining services for manufacturing, extended their strong performance from last year and soared early in January after the company announced its intention to acquire another on-demand digital manufacturing platform. We took advantage of their runup to sell our position.”
4. Accolade, Inc. (NASDAQ:ACCD)
ARK Investment Management’s Stake Value: $294,198,000
Percentage of ARK Investment Management’s 13F Portfolio: 0.54%
Market Cap: $2.667 billion
Number of Hedge Fund Holders: 24
The fourth stock on our list of Cathie Wood’s top 15 small-cap stock picks is Accolade, Inc. (NASDAQ:ACCD), which is a company leveraging artificial intelligence to improve healthcare for employees, by providing intelligent benefit packages to employers. The solutions at Accolade, Inc. (NASDAQ:ACCD) are designed to assess the needs of subjects that will enable them to live a healthier life, and translate those needs into data-driven insights so that customers can be guided towards a better life with innovative technology and care options.
Wood’s ARK Investment Management owns 5.41 million shares in Accolade, Inc. (NASDAQ:ACCD), amounting to $294.1 million, and making up 0.54% of Wood’s 13F portfolio.
ARK Investment Management is the leading stakeholder in Accolade, Inc. (NASDAQ:ACCD). Overall, 24 hedge funds reported owning stakes in Accolade, Inc. (NASDAQ:ACCD), worth $594.8 million, up from 19 in the previous quarter, with stakes valued at $471.6 million.
On October 7, Accolade, Inc. (NASDAQ:ACCD) reported earnings for the third quarter. The company stated earnings per share of -$0.59, missing estimates by -$0.07. The estimated revenue was exceeded by $2.92 million at $73.29 million.
Needham analyst Ryan MacDonald kept a Buy rating on the stock, but lowered the price target from $68 to $56. The analyst explained that Accolade, Inc. (NASDAQ:ACCD)’s solid Q2 results, in addition to its new products, Care and One, will help strengthen customer relationships, even if their financial rewards will not be reaped before 2021. The lower price target was placed due to the broad-based multiple compression across the digital health sector.
3. Berkeley Lights, Inc. (NASDAQ:BLI)
ARK Investment Management’s Stake Value: $309,333,000
Percentage of ARK Investment Management’s 13F Portfolio: 0.57%
Market Cap: $1.711 billion
Number of Hedge Fund Holders: 15
Ranking third on our list of Cathie Wood’s top 15 small-cap stock picks is Berkeley Lights, Inc. (NASDAQ:BLI), which is a company that enhances the use of cell-based products. Their signature technology and workflows allow scientists to identify the cells they need at an accelerated pace. Berkeley Lights, Inc. (NASDAQ:BLI)’s core workflows include Antibody Discovery, Cell Line Development, Cell Therapy Development, and Synthetic Biology.
Wood’s ARK Investment Management owns 6.9 million shares in Berkeley Lights, Inc. (NASDAQ:BLI), amounting to $309.3 million, and making up 0.57% of Wood’s 13F portfolio.
Out of the 873 elite hedge funds monitored extensively by Insider Monkey, 15 funds were bullish on Berkeley Lights, Inc. (NASDAQ:BLI) at the end of June, down from 16 in the previous quarter.
On August 11, the company reported earnings for the second quarter. The EPS reported by Berkeley Lights, Inc. (NASDAQ:BLI) was -$0.27, missing estimates by -$0.04. The actual revenue for the company was $19.25 million, missing estimated revenue by -$0.39 million. Cowen analyst Dan Brennan maintained an Outperform rating on Berkeley Lights, Inc. (NASDAQ:BLI) on October 14.
Alger Small Cap Focus Fund mentioned Berkeley Lights, Inc. (NASDAQ:BLI) in their Q1 2021 investor letter. Here is what they said:
“Berkeley Lights Inc. was among the top detractors from performance. Berkeley Lights is a leading digital cell biology company founded in 2011. The company provides a single cell manipulation platform to enable and accelerate rapid development and commercialization of biotherapeutics and other cell-based products. The Berkeley Lights platform provides an advanced environment for rapid functional characterization of single cells at scale, with advanced automation systems that analyze live cells using proprietary consumables and application and workflow software to deliver robust single cell data. Berkeley Lights’ workflows enable a deep understanding of each cell’s behavior by recording critical data such as relevant phenotypic characteristics and linking to genetic information using real -time continuous images on thousands of cells, cell by cell. The company drastically reduces the amount of time required to get results for each of these application workflows by using customer defined criteria to find the best eel I for each customer’s desired product.
We believe the underperformance of Berkeley Lights shares during the first quarter was driven more by heavy insider selling than by a change in fundamentals and we believe the base business remains strong. For example, the company recently announced a new$17 mi11ion multi-year non-exclusive collaboration agreement with a global leader in the contract development and manufacturing organization (COMO) space, which will expand the company’s total addressable market and potentially allow the company to develop new workflows that it can commercialize in the future. More broadly, Berkeley Lights has tail winds from strong demand for cell -based products, increasing complexity of these products and a growing number of therapeutic modalities, all of which should drive demand for the company’s technology.”
2. 2U, Inc. (NASDAQ:TWOU)
ARK Investment Management’s Stake Value: $390,953,000
Percentage of ARK Investment Management’s 13F Portfolio: 0.72%
Market Cap: $2.524 billion
Number of Hedge Fund Holders: 25
2U, Inc. (NASDAQ:TWOU) is the second stock on our list of Cathie Wood’s top 15 small-cap stock picks. The company provides educational technology to not-for-profit colleges and universities for their online degree courses. 2U, Inc. (NASDAQ:TWOU) provides a cloud-based SaaS platform, coursework and curriculum, capital, and infrastructure support to its affiliated educational institutes.
Wood’s ARK Investment Management owns 9.38 million shares in 2U, Inc. (NASDAQ:TWOU), valued at $390.95 million, and making up 0.72% of Wood’s 13F portfolio.
At the end of June, 25 hedge funds in Insider Monkey’s database were long 2U, Inc. (NASDAQ:TWOU), up from 23 in the previous quarter, with ARK Investment Management being the largest stakeholder.
The second quarter earnings per share was reported as -$0.09 on July 29, beating estimates by $0.06. The revenue for 2U, Inc. (NASDAQ:TWOU) was $237.21 million, surpassing expected revenue by $3.6 million.
1. Editas Medicine, Inc. (NASDAQ:EDIT)
ARK Investment Management’s Stake Value: $406,678,000
Percentage of ARK Investment Management’s 13F Portfolio: 0.75%
Market Cap: $2.595 billion
Number of Hedge Fund Holders: 23
Ranking first on our list of Cathie Wood’s top 15 small-cap stock picks is Editas Medicine, Inc. (NASDAQ:EDIT), which is a biotechnology company focused on genome editing, and the potential of genomic technology into medicines that can combat deadly diseases. The company is employing CRISPR technology to edit genes on the inside and outside the human body.
Wood’s ARK Investment Management owns 7.18 million shares in Editas Medicine, Inc. (NASDAQ:EDIT), worth $406.6 million, representing 0.75% of Wood’s 13F portfolio.
With ARK Investment Management as the leading stakeholder, overall, 25 hedge funds were bullish on Editas Medicine, Inc. (NASDAQ:EDIT) at the end of June according to Insider Monkey’s database, down from 24 in the previous quarter.
On August 4, the earnings per share for the second quarter amounted to -$0.81, exactly as analysts’ predicted. The revenue for Editas Medicine, Inc. (NASDAQ:EDIT) was $379,000, missing estimates by -$6.4 million.
Stifel analyst Dae Gon Ha kept a Hold rating on the stock, while lowering the price target from $65 to $46. He was on the fence about the pipeline value and success of some of the upcoming products at Editas Medicine, Inc. (NASDAQ:EDIT), hence the lowered price target and subsequent rating.
You can also take a look at 11 Best 5G Stocks To Buy According To Hedge Funds and Carl Icahn’s Stock Portfolio: Top 12 Picks.
