Hate her or love her, you can't ignore her. Some investors hail Cathie Wood genius in identifying high growth stocks early and having the courage to raise money and invest in them. Others, deny her success, saying she is just a lucky investor in over-hyped stocks.
We are not here to argue on either side as it is very hard to attribute investing success to intelligence or luck for any investor. We are primarily interested in her decisions to sell or buy stocks and here we look at her recent sells.
Good Riddances?
Following are three of the stocks that were sold off completely last quarter by ARK Investments. Why?
| Ticker | Name | Amount Sold |
|---|---|---|
| PSTG | Pure Storage | $300 M |
| MCRB | Seres Therapeutics | $230 M |
| TTD | The Trade Desk | $170 M |
Pure Storage (PSTG)
Pure Storage is a data storage solution provider. It was a typical Cathie Wood signature high revenue growth but loss making company. Ark invested in the stock in first quarter of 2020. Our own Grufity Fair Value estimated the stock to be undervalued at the time. The stock was providing 30%+ growth in revenues at the time. However, she got rid of the stock in 3rd quarter of 2021.
The main reason being that the growth had considerably slowed down. Grufity's Fair Value estimates the stock to be very overpriced right now. Downside risk on stock is high. This stock is definitely a good riddance.
Seres Therapeutics (MCRB)
This was a new drug play. In Aug 2020, Seres stock jumped 600% when news about positive Phase 3 trial data of their new drug SER-109. ARK's ~$60M investment in MCRB jumped to $350M providing significant returns. However, in July 2021, Seres failed phase 2b on SER-287 and the stock crashed 62%. Cathie had taken out atleast $100M of profits before the crash and eventually got rid of the stock.
The decision to sell seems justified as the earning potential of MCRB remains bleak. If you own this stock, you may want to revisit your analysis.
The Trade Desk ($TTD)
The Trade Desk is a cloud based platform for digital ads. With rising mobile usage, it has a great macro tail-wind. The company has been providing ~40% revenue/earnings growth year after year. The stock goes at a very high PE multiple of 139. In the current volatile market scenario, high PE multiple stocks can see big drawdowns. The stock is currently down -31% from it's peak.
Grufity considers the stock to be trading slightly below it's fair value. While Cathie got rid of the stock, we consider it to be a hold as its trading slightly below it's fair value. Sometimes portfolio managers have to sell good stocks because of withdrawals from investors. If you are holding, check the potential risks to TTD here.
Where can I see full portfolio of Cathie Wood holdings?
You can check out Cathie Wood's entire holdings on Grufity's Fund Page. The page shows following key things:
- All stocks held by ARK as of now.
- All stocks bought or sold recently
- Trends of how Cathie increased or decreased it's holdings in certain stock over time
- Any Call or Put options bought by ARK
Here are some other stocks that got major reductions but are still held by Cathie Wood.
| Ticker | Name | Reduction % |
|---|---|---|
| TSLA | Tesla | -27% |
| SQ | Square | -24% |
| DOCU | Docusign | -35% |
| PYPL | Paypal | -27% |
For details on what new stocks Cathie got interested in check her detailed fund page.