Growth stocks are not immune to periods of sluggishness, even those chosen by prominent investors such as Cathie Wood, the mastermind behind investment management firm Ark Invest and its flagship ETF Ark Innovation (ARKK).
if investors shift their money from growth opportunities to investments that may outperform during the country’s ongoing recovery from COVID-19, ARRK and many of its constituent stocks have struggled to generate much momentum this year.
But a lot Cathie Wood Shares are still packed with legitimate benefits. Let’s take a quick look at five stocks Wood is arguing for that could trigger a rebound in September.
Total number of shares held by ARKK: 7.57 million
Market value of treasury shares: $490 million
Weight % of ARKK: 2.18%
Twitter has been in a bit of a slump for the past six months. The share price has fallen 16% since March 1.
But that didn’t deter Wood. By the end of July, ARKK’s exposure to the social media giant grew an additional 982,205 shares.
Twitter may already be ubiquitous in terms of recognition and its influence on public discourse. But the company’s recent financial data points to the kind of constantly rising revenue that should have happened: growth investors salivate.
In July, Twitter reported second-quarter revenue of $1.19 billion — an 87% year-over-year increase — thanks to the company’s improved ad performance, inclusion in major product launches and an 11% increase in daily users that drive revenue. can be generated.
During the company’s Q2 earnings call, CEO Jack Dorsey alluded to the company’s growing vision, which includes “AI, decentralization, and the internet at long last access to a global native currency in Bitcoin.”
The three trends, Dorsey said, will help Twitter “do our job better, and we plan to lead the way.”
Total number of shares held by ARKK: 3.28 million
Market value of treasury shares: $2.4 billion
Weight % of ARKK: 10.65%
Wood hasn’t been so optimistic about Tesla this year. It added nearly 111,000 shares of the electric vehicle manufacturer to ARKK in July, but then sold about 4% of its stake in the company in the first week of August.
Electric vehicles will play a prominent role in the planet’s race to work together for a working, carbon-neutral future. Since Tesla is the undisputed leader in electric cars, the modest 3% return on its share year so far should not be taken too seriously by investors.
Tesla shares slumped early in the year, falling from $883 on Jan. 26 to $563 on May 19. Since then it has gone relatively smoothly.
On August 30, Tesla stock was sold for $730 per share.
Total number of shares held by ARKK: 2.83 million
Market value of treasury shares: $984 million
Weight percentage of ARKK: 4.37%
Zoom is not having a great week. Between closing Monday and noon Tuesday, shares of the communications technology company plummeted 15%, wiping out an estimated $15 billion in market value.
That will not please investors who own a piece of ARKK, which added more than 95,000 shares in Zoom in early June.
Those selling Zoom stocks seem shocked by the declining growth outlook. On a post-second-quarter earnings call, Kelly Steckelberg, the company’s CFO, said the country’s recovery from the pandemic has been “slightly faster” than the company expected, resulting in more face-to-face interactions and less demand for a digital meeting platform such as Zoom.
However, the company’s $1 billion in Q2 revenues should not be overlooked, nor should the corporate-centric portion of its business have shown the same sluggishness as its individual and small business operations.
Total number of shares held by ARKK: 3.28 million
Market value of treasury shares: $892 million
Weight percentage of ARKK: 3.96%
In July, Wood added just under 180,000 shares of payment services company Square to ARKK’s portfolio.
The purchase followed an announcement by Square founder Jack Dorsey—yes, the Twitter guy—that his company is developing a new Bitcoin platform for the financial services industry. The announcement came a week after Square announced its plans to create a bitcoin hardware wallet to bring cryptocurrency more into the mainstream.
Square’s future crypto game didn’t just catch Cathie Wood’s attention. analysts polled by CNN expect Square inventory to increase by [almost 16%] in the next 12 months and revenue will improve from $9.4 billion reported in 2022 to more than $20 billion in 2022.
Square has had a fairly volatile 2021, but its stock is up more than 24% since the start of the year.
Robinhood Markets (HOOD)
Total number of shares held by ARKK: 4.8 million
Market value of treasury shares: $209 million
Weight % of ARKK: 0.93%
After going public only a month ago, financial services firm and commission-free trading pioneer Robinhood has already seen its stock increase by nearly 27%.
Ark Invest stepped in on the ground floor and acquired 1.3 million shares shortly after Robinhood’s IPO, and has since increased its investment.
Robinhood’s business model has generated a lot of hype, not to mention cutting copy costs among its competitors. If the hype translates into a growing, engaged customer base that continues to make a high volume of transactions using the company’s platform, it should enjoy stable, solid revenue.
The company is also branching out into other services, so as the market corrects and the user base becomes less active, Robinhood should have other revenue streams to tap into.
“As Robinhood branched out into other forms of finance, including ‘buy now, pay later’ cards, I think [CEO Vlad Tenev’s] army of 22 million users will grow and become more powerful,” says “Mad Money” host Jim Cramer.
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This article provides information only and should not be construed as advice. It comes without any kind of warranty.