In this article, we discuss the 10 stocks Cathie Wood is getting rid of. If you want to skip our detailed analysis of these stocks, go directly to Cathie Wood is Getting Rid of These 5 Stocks.
Cathie Wood, the chief of New York-based ARK Investment Management, has become famous on Wall Street in recent years for her aggressive bets on technology stocks. Wood, now 65 years-old, pioneers an investment strategy that closely resembles the growth-focused investments that retail traders - the Reddit crowd, as some would call them - make on the market on a daily basis. The investment firm led by Wood manages more than $53 billion in assets with the top five holdings comprising close to 23% of the portfolio.
As her fund struggles with the post-pandemic pressures related to inflation and the stock volatility surrounding growth companies, Wood has doubled down on her tech-related bets. More details about this are available here. Perhaps to fund these investments, Wood has also been quietly getting rid of some stocks over the past few months. These are discussed in detail below. Wood, whose portfolio has grown from just $10 billion in 2019 to over $85 billion at one point this year, outperformed the benchmark S&P 500 by 136 percentage points last year.
Some of the top holdings in the ARK Investment Management portfolio at the end of the second quarter of 2021 were Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), among others. Out of the ten companies in which she reduced her stake by over 60% in the second quarter, the top five comprise just 0.56% of the portfolio. Wood, over the years, has made a success story for herself in contrast to other parts of the stock world.
The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Cathie Wood ARK Investment Management
Cathie Wood of ARK Investment Management
Our Methodology
With this context in mind, here is our list of the 10 stocks Cathie Wood is getting rid of. These stock picks are aimed at providing readers with some insight into the investment philosophy of ARK Investment Management and the outlook it has on the market.
The companies below were ranked according to the investment portfolio of ARK Investment Management at the end of the second quarter of 2021. Only companies in which the investment firm slashed stake by more than 60% were considered for the listing.
Pluristem Therapeutics Inc. (NASDAQ: PSTI) is placed tenth on our list of 10 stocks Cathie Wood is getting rid of. The company operates from Israel. It works in the biotechnology sector. According to latest filings, ARK Investment Management owned more than 1.3 million shares in the firm at the end of June 2021, worth over $5.3 million. The fund has decreased stake in the biotech company by 63% compared to the end of March 2021.
On May 4, investment advisory Alliance Global Partners initiated coverage of Pluristem Therapeutics Inc. (NASDAQ: PSTI) stock with a Buy rating and a price target of $12.5, highlighting the potential of pipeline drugs.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $7.6 million in Pluristem Therapeutics Inc. (NASDAQ: PSTI), down from 7 the preceding quarter worth $20 million.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Pluristem Therapeutics Inc. (NASDAQ: PSTI) is one of the stocks Cathie Wood is getting rid of.
Silvergate Capital Corporation (NYSE: SI) is ranked ninth on our list of 10 stocks Cathie Wood is getting rid of. The company is based in California and operates as a bank holding firm. ARK Investment Management owned 700,831 shares in the company at the end of June 2021, representing 0.14% of the portfolio. The shares are worth $79 million. The fund has trimmed stake in the company by 64% compared to the first quarter of 2021.
On May 19, investment advisory Wedbush maintained an Outperform rating on Silvergate Capital Corporation (NYSE: SI) stock with a price target of $175, adding the company to the Best Idea List of the advisory.
Out of the hedge funds being tracked by Insider Monkey, Virginia-based investment firm EJF Capital is a leading shareholder in Silvergate Capital Corporation (NYSE: SI) with 1.4 million shares worth more than $168 million.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Silvergate Capital Corporation (NYSE: SI) is one of the stocks Cathie Wood is getting rid of.
HUYA Inc. (NYSE: HUYA) is a China-based firm that operates game live streaming platforms. It is placed eighth on our list of 10 stocks Cathie Wood is getting rid of. Regulatory filings show that ARK Investment Management owned more than 3.1 million shares in the company at the end of June 2021, representing 0.1% of the portfolio. The shares are worth $56 million. The fund has slashed stake in the company by 72% compared to the first quarter of the year.
On August 18, investment advisory Citi resumed coverage of HUYA Inc. (NYSE: HUYA) stock with a Buy rating and a price target of $13.2, noting that the company would drive sales growth in the coming months.
At the end of the second quarter of 2021, 11 hedge funds in the database of Insider Monkey held stakes worth $89 million in HUYA Inc. (NYSE: HUYA), down from 13 in the previous quarter worth $335 million.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), HUYA Inc. (NYSE: HUYA) is one of the stocks Cathie Wood is getting rid of.
Sarepta Therapeutics, Inc. (NASDAQ: SRPT) is a Cambridge-based biopharmaceutical company. It is ranked seventh on our list of 10 stocks Cathie Wood is getting rid of. Latest data shows that ARK Investment Management owned 504,442 shares in the company at the end of the second quarter of 2021. These represent 0.07% of the portfolio and are valued at more than $39 million. The firm led by Wood has trimmed stake in the biopharma company by 73% compared to the first quarter of the year.
On August 5, investment advisory JPMorgan upgraded Sarepta Therapeutics, Inc. (NASDAQ: SRPT) stock to Neutral from Underperform with a price target of $87, down from $92, citing progress on the regulatory front as the reason behind the upgrade.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm VenBio Select Advisor is a leading shareholder in Sarepta Therapeutics, Inc. (NASDAQ: SRPT) with 2.4 million shares worth more than $186 million.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Sarepta Therapeutics, Inc. (NASDAQ: SRPT) is one of the stocks Cathie Wood is getting rid of.
In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Sarepta Therapeutics, Inc. (NASDAQ: SRPT) was one of them. Here is what the fund said:
“We ended our campaign in Sarepta Therapeutics. Sarepta Therapeutics is a leader in Duchenne muscular dystrophy (DMD) drug development. Shares were pressured during the quarter amid a disappointing clinical trial outcome for its DMD gene therapy. We believe the odds of FDA approval for this therapy are lower and the timeline longer. Fortunately, we controlled for this risk by keeping this holding in the GardenSM. While Sarepta’s pipeline of gene therapies for neuromuscular disorders remains attractive, we exited our position given this setback. We believe CropSM holding Catalent is a better risk-adjusted way to participate in these opportunities. Catalent is a leader in gene therapy manufacturing and one of Sarepta’s key partners.”
NVIDIA Corporation (NASDAQ: NVDA) is placed sixth on our list of 10 stocks Cathie Wood is getting rid of. The company markets visual computing products and is based in California. According to regulatory filings, ARK Investment Management owned 67,215 shares in the company at the end of June 2021, representing 0.1% of the portfolio. The shares are valued at over $53 million. The fund has decreased stake in the firm by 84% compared to the end of March 2021.
On August 20, investment advisory Benchmark assumed coverage of NVIDIA Corporation (NASDAQ: NVDA) stock with a Buy rating and a price target of $230, appreciating the solid quarterly results posted by the company and strength in the gaming and data businesses.
At the end of the second quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $9 billion in NVIDIA Corporation (NASDAQ: NVDA), up from 80 the preceding quarter worth $6.2 billion.
Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), NVIDIA Corporation (NASDAQ: NVDA) is one of the stocks Cathie Wood is getting rid of.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ: NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
