Cathie Wood, CEO and founder of Ark Invest, says she invests with a five-year time horizon, betting heavily on speculative growth names such as Tesla (TSLA), Year (YEAR), Zoom video communication (ZM) and Shopify (STORE). But at least in 2022, Ark’s 10 largest holdings have fallen sharply.
Zoom Video Communications is the largest holding in Ark Invest’s various ETFs as of November 28, followed by Exact Sciences, Tesla, Roku, and Square-parent Block (SQ). UiPath (PATH), Teladoc Health (TDOC), Shopify, Intellia Therapeutics (NTLA) and Crispr therapies (CRSP) rounds out Cathie Wood’s 10 largest stock holdings.
Cathie Wood’s top positions: achievements in 2022
|Company||Ticker||2022 YTD change||versus always high|
CRSP stock has outperformed these large Ark holdings and is still down nearly 30%. ROKU stock is the laggard, falling more than 76% in 2022. Tesla stock is down 48%, better than the average drop of nearly 60%.
Meanwhile, the S&P 500 is down 16.8% so far this year, while the Nasdaq composite is down 29.4%. The Dow Jones Industrial Average is down just 6.85%.
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Teladoc leads Ark declines from all-time highs
All of Ark Invest’s top 10 stocks are down even more from their all-time highs in 2020 or 2021. TDOC stocks have crashed 91% from their February 2021 peak. Tesla stock is 56% below its November 2021 high , and that is the smallest drop.
On average, these 10 top positions from Ark Invest are 79% lower than all-time highs.
Cathie Wood adds to losers
Cathie Wood and Ark Invest didn’t buy at the very top on all of these stocks. She prefers to buy on weakness and sell on strength.
She significantly narrowed Ark Invest’s Tesla stake and was closer to record highs, although she’s recently added some stocks.
Still, Tesla stock is Cathie Wood’s only winning position in the top 10. NTLA stock and CRSP stock are the only holdings even close to breaking even for Ark Invest.
Over the past year, Wood has added stock to Roku, UiPath, and several other stocks after major sell-offs over the past year.
In 2020 and into 2021, the news that Cathie Wood would take a new or larger position in a stock would trigger a big push the next day. But no longer.
Cathie Wood’s 10 largest holdings account for nearly 45% of Ark Invest’s total holdings, with ZM Shares and Tesla each accounting for nearly 6%. Ark owns only 0.13% of megacap Tesla stock, but about 11% of TDOC stock and Intellia Therapeutics. Wood also owns more than 9% of the shares of EXAS, Roku, UiPath and Crispr Therapeutics.
Tesla profitable, but a lot of money losing Ark Invest shares
Tesla’s earnings are strong and still growing rapidly, but it’s an outlier among Cathie Wood’s large Ark Invest holdings. Zoom Video and Square are profitable, although revenues are falling sharply in 2022. Shopify and UiPath report small gains or losses.
Roku, Exact Sciences, Teladoc, Crispr Therapeutics and Intellia Therapeutics are expected to report major losses in 2022 and 2023.
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Ark ETFs are crashing
Cathie Wood’s flagship ARK Innovation ETF (ARKK) is down 63% in 2022 and 78.1% from its February 2021 high. Earlier this month, ARKK hit a five-year low. The Ark Genomic Revolution ETF (ARKG) hit a two-year low in June, while the Ark Fintech Innovation ETF (ARKF) set a record low this month.
Some of these top 10 Ark holdings can make a comeback, recoup their huge losses and move on to much higher highs. But many may not. These companies are in advanced fields, from EVs to automation to telemedicine and gene editing. But that doesn’t necessarily mean these particular companies and stocks will take the lead, even on a Cathie Wood-esque time horizon.
Follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
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