Catherine Wood (Trades, Portfolio) disclosed her firm’s first-quarter 2023 portfolio last week.
Wood, who is the founder, chief investment officer and CEO of St. Petersburg, Florida-based ARK Investment Management, has made a name for herself through investing in “disruptive innovation” stocks. Implementing an iterative process that combines top-down and bottom-up research, ARK Investment seeks to invest in companies that may benefit from cross-sector innovations like artificial intelligence, robotics, energy storage, DNA sequencing and blockchain technology.
Recording a banner year in 2020, Wood’s performance has deteriorated over the past two years as high-flying tech and growth stocks took a hit. That has not stopped her from looking for opportunities, though.
The guru’s 13F filing for the three months ended March 31 shows she entered six new positions, sold out of 17 stocks and added to or trimmed a number of other existing investments. Her most notable trades included reductions of the Exact Sciences Corp. (EXAS, Financial) and Twilio Inc. (TWLO, Financial) holdings as well as increased bets on Coinbase Global Inc. (COIN, Financial), Tesla Inc. (TSLA, Financial) and Block Inc. (SQ, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Exact Sciences
Wood curbed her Exact Sciences (EXAS, Financial) stake by 29.06%, selling 4.66 million shares. The transaction had an impact of -2% on the equity portfolio. The stock traded for an average price of $64.28 per share during the quarter.
She now holds a total of 11.40 million shares, which represent 5.30% of the equity portfolio. Previously the largest position, it is now the guru’s sixth-largest holding. GuruFocus estimates she has lost 37.94% on the investment so far.
The Madison, Wisconsin-based health care company, which specializes in medical diagnostics for the detection of early stage cancers, has an $11.93 billion market cap; its shares were trading around $66.55 on Monday with a price-book ratio of 3.89 and a price-sales ratio of 5.63.
The GF Value Line suggests the stock, while undervalued, is a possible value trap based on its historical ratios, past financial performance and analysts’ future earnings projections. Therefore, potential investors should conduct thorough research before making a decision.
At 71 out of 100, GF Score indicates the company is likely to have average future performance. While it recorded high ratings for growth and GF Value, its financial strength rank was more moderate and the profitability and momentum were low.
Of the gurus invested in Exact Sciences, Wood remains the largest shareholder with 6.35% of its outstanding shares. Baillie Gifford (Trades, Portfolio), the Vanguard Health Care Fund (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) also have notable holdings.
Twilio
The investor trimmed the Twilio (TWLO, Financial) position by 15.65%, dumping 1.15 million shares. The transaction impacted the equity portfolio by -0.49%. During the quarter, shares traded for an average price of $61.68 each.
Wood now holds 6.25 million shares, which account for 2.86% of the equity portfolio. GuruFocus data shows she has lost an estimated 67.02% on the investment to date.
The company headquartered in San Francisco, which operates a cloud-based API platform for businesses to create customized communications experiences for their customers, has a market cap of $10.31 billion; its shares were trading around $55.08 on Monday with a price-book ratio of 0.97 and a price-sales ratio of 2.62.
According to the GF Value Line, the stock is a possible value trap currently. As such, potential investors should approach with caution.
The GF Score of 68 implies the company has poor performance potential due to low ratings for profitability, GF Value and momentum. The growth rank, however, was high, while financial strength was more moderate.
With a 3.95% stake, Al Gore (Trades, Portfolio)’s Generation Investment is the company’s largest guru shareholder. Other notable guru investors of Twilio are Baillie Gifford (Trades, Portfolio) and Cohen.
Coinbase Global
The guru expanded her stake in Coinbase (COIN, Financial) by 28.15%, investing in 2.58 million shares. The transaction had an impact of 1.20% on the equity portfolio. The stock traded for an average per-share price of $59.88 during the quarter.
Wood now holds 11.77 million shares, which occupy 5.47% of the equity portfolio. As her fourth-largest investment, she has lost an estimated 53.26% thus far.
The San Francisco-based company, which operates an online platform for trading cryptocurrency, has a $12.67 billion market cap; its shares were trading around $54.75 on Monday with a price-book ratio of 2.32 and a price-sales ratio of 3.83.
Since its initial public offering in April 2021, the stock has tumbled more than 80%.
Further, the GF Score of 24 means the company has weak performance potential. Since it only received low ratings for financial strength and profitability, however, the company’s prospects may not be fully reflected.
Wood is Coinbase’s largest guru shareholder with a 5.09% stake. Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Chase Coleman (Trades, Portfolio), Tiger Management (Trades, Portfolio), Jefferies Group (Trades, Portfolio) and several others also own the stock.
Tesla
Wood upped the Tesla (TSLA, Financial) position by 17.60%, picking up 2.58 million shares. The transaction had an impact of 1.16% on the equity portfolio. During the quarter, the stock traded for an average price of $174.45 per share.
The guru now holds 5.44 million shares, making it her largest holding with a weight of 7.76% in the equity portfolio. She has gained an estimated 114.43% on the investment so far according to GuruFocus.
The electric vehicle manufacturer, which recently announced it is moving its headquarters back to California, has a market cap of $515.17 billion; its shares were trading around $162.55 on Monday with a price-earnings ratio of 47.81, a price-book ratio of 10.72 and a price-sales ratio of 6.51.
Based on the GF Value Line, the stock appears to be significantly undervalued currently.
The company has good outperformance potential with a GF Score of 81, driven by high ratings for growth, financial strength and momentum as well as more moderate profitability and GF Value ranks.
Holding a 0.85% stake, Baillie Gifford (Trades, Portfolio) is Tesla’s largest guru shareholder. Other gurus with large positions include Ron Baron (Trades, Portfolio), PRIMECAP Management (Trades, Portfolio), the Harbor Capital Appreciation Fund (Trades, Portfolio), Philippe Laffont (Trades, Portfolio), Simons’ firm and Jefferies Group (Trades, Portfolio).
Block
The investor increased her Block (SQ, Financial) holding by 16.3%, buying 1.46 million shares. The transaction impacted the equity portfolio by 0.69%. Shares traded for an average price of $74.85 each during the quarter.
Wood now holds a total of 10.47 million shares. With a weight of 4.94%, it is the seventh-largest position. GuruFocus found she has lost an estimated 6.64% on the investment over its lifetime.
Previously known as Square, the San Francisco-based mobile payments company has a $38.83 billion market cap; its shares were trading around $64.50 on Monday with a price-book ratio of 2.25 and a price-sales ratio of 2.15.
The GF Value Line suggests the stock is a possible value trap currently, so potential investors should carefully consider the risks before making a decision.
The GF Score of 71 means the company is likely to have average performance going forward on the back of high momentum and growth ranks. The ratings for profitability and financial strength were more moderate, while the GF Value was low.
Frank Sands (Trades, Portfolio) is Block’s largest guru shareholder with a 2.63% stake. Other top guru investors include Fisher, Laffont, Andreas Halvorsen (Trades, Portfolio) and Chase Coleman (Trades, Portfolio).
Additional trades and performance
Other trades made during the quarter included the divestment of Fate Therapeutics Inc. (FATE), boosts to the Teladoc Health Inc. (TDOC), Unity Software Inc. (U) and Shopify Inc. (SHOP) investments and a reduction of the Monday.com Ltd. (MNDY) position.
Wood’s $14.55 billion equity portfolio, which consists of 219 stocks, is most heavily invested in the technology and health care sectors.
The ARK Innovation ETF, the firm’s flagship fund, returned -60.39% in 2022, severely underperforming the S&P 500’s -18.11% return.
