Cathie Wood became a growth investing legend three years ago when her family of Ark Invest exchange-traded funds more than doubled. Her aggressive style backfired in 2021 and 2022, but she's beating the market again. Wood makes her daily transactions available at the end of every trading day, giving investors a glimpse of what she's buying and selling.
What's she picking up these days? The Ark Invest co-founder and CEO added to her existing positions in Teladoc Health (TDOC -0.84%), Joby Aviation (JOBY -2.51%), and Coinbase Global (COIN -3.17%) on Monday. Let's look at a closer look at the stocks she is buying.
Teladoc
Wood has a knack for buying into some of her larger positions on pullbacks after a rough financial update, but that's not the case with Teladoc. The telehealth pioneer has plummeted 91% since peaking more than two years ago, but it's up 5% in the three trading days since announcing its first-quarter results last week.
Teladoc has struggled with profitability and sluggish growth, especially in this stage of COVID-19 crisis where patients no longer have to settle for virtual consultations. Teladoc has also taken significant write-offs for its massive Livongo Health acquisition. Thankfully things are starting to get better.
Image source: Getty Images.
Teladoc is paying attention to the bottom line, a shift that included some painful layoffs earlier this year. It's also working on its top line. Teladoc boosted the low end of its revenue range for all of 2023 during last week's financial update. Analysts have been paring back their deficit forecasts since its refreshed guidance, and they now expect Teladoc to turn profitable by 2026.
Competition is undeniably heating up, just as demand is facing its own challenges. However, at least two analysts have jacked up their price targets since Teladoc's report after last Wednesday's market close. George Hill at Deutsche Bank feels that Teladoc is at a near term operating bottom. The long-term argument for telemedicine stocks makes sense. It's a win-win proposition for controlling healthcare costs and getting patients served quickly and conveniently without long workplace absences. Teladoc's numbers may not look so hot right not, but Teladoc is one of Wood's 10 largest holdings. It's the picture of health in her eyes, no matter how ugly the two-year chart may be.
Joby Aviation
Telehealth isn't the only emerging trend that will take years to play out successfully. Wood is also a fan of air-taxi services. Ark invest has stakes in three publicly traded companies in this emerging niche, and none of them are posting any kind of meaningful revenue. Joby Aviation is currently her smallest of the three positions, even though it is more valuable by market cap than the two other players combined.
The risks are real, especially since Joby is a pre-revenue company. It's at least two years away from generating any kind of meaningful top-line results. Joby is hoping to get its fleet of small electric -- yes, electric -- aircraft off the ground, figuratively and literally. Electric vertical take-off and landing (eVTOL) aircraft is promising, and big names in U.S. defense and legacy air carriers are warming up to Joby Aviation. Delta Air Lines has invested at least $60 million, committing to Joby as a way to give its more affluent passengers a quicker way to get around once they land in major airports with heavy traditional traffic congestion.
Coinbase Global
Finally there's Coinbase Global, currently Wood's fourth-largest holding at Ark Invest. The leading cryptocurrency exchange had more than doubled through the first few weeks of 2023, but the shares have surrendered 43% of their peak value from early February.
Coinbase isn't faring as well as some of the leading denominations of digital currencies that have soared this year. Regulatory risks remain, and a couple of notable crypto platforms have buckled under their speculative weight. Coinbase was very profitable when it went public in the springtime of 2021, but Wall Street pros don't see it getting out of the red until at least 2027.
