Cathie Wood’s ARK Invest ETFs have been some of the most attractive funds since huge stock market gains in 2020. But those funds took a hit hard in 2021 and continue to slump in 2022. Five ARK Invest stocks to watch they are Coinbase, Roku, Block, Tesla stock and Zoom Video.
Is ARKK a buy right now?
The flagship fund of the investment company ARK Invest is ARK Innovation ETF (ARKK). The ARKK ETF focuses on companies that exhibit “disruptive innovation”, a new technology-enabled product or service that potentially changes the way the world works.
The ARK Innovation ETF is up more than 152% in 2020, easily beating the Nasdaq’s hefty 43.6% return. But the ARKK ETF sharply underperformed the Nasdaq in 2021, finishing down 24% from the Nasdaq’s advance of 21.4%. That underperformance continued into 2022 with the ARKK ETF down more than 62% through Nov. 22 compared to the Nasdaq’s 28.6% decline over the same period.
With the ARKK ETF at about 70% off its 52-week high, the ETF is not a buy right now. Wait for the ETF to break its current downtrend, form a new base, and then cross a good buy point to indicate the right time to buy. The ARKK ETF was up 1.2% on Wednesday.
Other ARK ETFs include Autonomous Technology & Robotics (ARKQ), Next Generation Internet (ARKW), Genomic Revolution (ARKG), Fintech Innovation (ARKF) and the recently debuted Space Exploration and Innovation (ARKX).
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How to Invest Like Cathie Wood: Focus on Revolutionaries
ARKK fund’s huge gain in 2020 is the result of great equity success stories in cutting-edge technology areas: DNA sequencing, robotics, artificial intelligence, energy storage and blockchain technology.
“Disruptive innovation is often not properly priced by traditional investment strategies because people may not understand how big the eventual opportunity will be. They are not evaluating the opportunity and they are not analyzing the disruption,” Wood, the founder and CEO of ARK Invest, commented on the company’s website.
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ARK Invest stocks to watch
ARK Invest stocks to watch and related tickers include Global coin base (CURRENCY), Roku (ROKU), To block (SQ), Tesla (TSLA) e Enlarge videos (ZM).
|Company Name||Symbol||Closing price||Weight in ARKK|
Source: ARK funds data as of Nov. 22, 2022
Cryptocurrency exchange Coinbase debuted on April 14, 2021 with a price tag of $250 per share. Coinbase shares closed its first day of trading at 328.28, up 31.3%, at a valuation of $87.3 billion. COIN stock is trading more than 85% off its 52-week high.
COIN shares are sharply below their 50-day and 200-day benchmarks after hitting a new all-time low on Nov. 21 amid the unraveling of major cryptocurrency exchange FTX. COIN stock rose 1.2% on Wednesday.
The large holding in Coinbase represents another of Ark Invest’s stocks offering increased exposure to cryptocurrencies.
Zoom into the stock video
Zoom Video is the leader in modern enterprise video communications, with a cloud platform for video and audio conferencing, chat and webinars across mobile, desktop and room systems.
On Nov. 21, the company reported October quarter revenue and earnings that beat estimates amid lower expectations. But guidance for ZM stocks fell short of Wall Street’s targets.
Shares of Zoom fell 2.3% on Wednesday. Shares are about 70% off their 52-week high.
Roku stock is trading about 80% off its 52-week high on steep 16-month weakness. The streaming video platform posted a larger-than-expected loss in the second quarter on Nov. 2, missed its sales target and offered weak guidance.
ROKU shares rose 2.3% Wednesday.
Block is a leader in digital payments and cryptocurrencies. The stock is about 72% off its 52-week high and well below its 200-day moving average.
According to IBD Stock Checkup, Block stock shows a 47 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
On Nov. 4, the company reported September quarter earnings and revenue that beat analyst estimates.
The block stock was up 0.3% on Wednesday.
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Why Tesla stock is one of the ARK Invest stocks to watch
Tesla stock is one of ARK Invest’s top stocks, with a whopping 7.5% weighting in the ARKK ETF portfolio. On April 13, Ark Invest modeled a $4,600 price target on the EV giant. The valuation was released ahead of Tesla’s 3-for-1 stock split on Aug. 24.
Tesla stock rose 4.7% Wednesday after Citigroup upgraded the stock to sell to neutral.
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