There’s never a dull moment when you’re a Cathie Wood fan. The aggressive growth investor is co-founder, CEO and stock picker at Ark Invest. She posts her daily trades at the end of each trading day and adds to some of her existing positions to start the new trading week.
The fund manager increased its positions Amazon (NASDAQ: AMZN), 3D systems(NYSE: DDD)And CRISPR technologies (NASDAQ: CRSP) on Monday. Let’s take a closer look at her three latest reinvestments.
The leading online retailer is the only of the three stocks in this column to move higher on Monday. Amazon is now trading 6% away from regaining the all-time highs it reached in July.
Wood is expanding her bet ahead of next week’s third-quarter report. Amazon provides new financial figures after the market closes on Halloween. She expects fewer tricks and more treats than you might think.
Buying before the profit didn’t yield any results last time. Amazon shares fell 9% on the day after posting poorly received second-quarter results in late July. Sales rose 10% weaker than expected in the company’s summer report. A strong 19% increase for the Amazon Web Services segment was not enough to fuel a 7% international increase and the 9% gain for the US e-commerce business.
Image source: Getty Images.
The guidance was also disappointing. Amazon modeled revenue growth of 8% to 11% for the third quarter, which it will report next week. Analysts were at the high end of that range at the time. Despite the troubled outlook, Wall Street professionals still see net sales rising 11% to $157.2 billion.
Analysts are a bit more ambitious on the bottom line. They expect a 33% increase in earnings per share. This may seem ambitious, but it has been the easiest hurdle for Amazon of late. Profitability nearly doubled last time, and Amazon has achieved double-digit profit percentages in the last four quarters.
With the stock nearing its all-time high, Wood is obviously hoping this isn’t a repeat of how earnings season played out for Amazon three months ago. Despite slow revenue growth — this will be the third straight year of net sales failing to exceed 12% — Amazon has done well with its high-margin Amazon Web Services cloud computing business.
3D Systems is one of the bigger disappointments of this year. The 3D printing pioneer saw its stock drop by more than half by 2024. Turnover is declining for the third year in a row. The market does not expect a return to profitability anytime soon.
The once undisputed leader in 3D printing has fallen out of favor, but 3D Systems isn’t throwing in the towel on what’s possible in additive manufacturing. Just last month, the company received FDA approval for a jet prosthesis solution and a total ankle replacement.
However, the buzz has still faded from investors’ portfolios. 3D Systems will likely remain that way until revenue growth returns. Sales peaked in 2018 and are now about a third of that. Over the summer, it lowered its revenue expectations again. Analysts see a return to positive sales increases next year, but are already underwhelmed by their enthusiasm for a turnaround.
There are few fields as promising as gene editing, and Wood holds positions in several of the top gene editing stocks in the country. CRISPR is a leading player in creating next-generation solutions to combat genetic diseases. Last year it finally received its first approval with a potential treatment for sickle cell disease and transfusion-dependent beta-thalassemia. Now it’s time to see if it can break into the larger oncology and cardiovascular markets.
Time is on CRISPR’s side. Despite a market capitalization of more than $4 billion, almost half of that is supported by the liquidity on its cash-rich balance sheet. With shares still trading more than 20% lower this year, Wood likely sees an opportunity to add to a dynamic company at a discount to the otherwise rising stock market.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rick Munarriz has no positions in any of the stocks mentioned. The Motley Fool holds and recommends positions in Amazon and CRISPR Therapeutics. The Motley Fool recommends 3D systems. The Motley Fool has a disclosure policy.
Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool
