The past few weeks have been refreshing for Cathie Wood and fans of her style of growth stock investing. The CEO and co-founder of Ark Invest publishes the buys and sells of her firm's exchange-traded funds (ETFs) every market day, giving the public insight into her latest allocation strategies.
Many of her stocks have been moving higher. Her most popular ETF has soared 37% since bottoming out three months ago. She's still finding bargains to purchase. She added to her existing stakes in Teladoc(NYSE: TDOC), Markforged(NYSE: MKFG), and Invitae(NYSE: NVTA) on Wednesday. Let's see what she might be seeing in these three stocks.
Ark Invest has been voraciously snapping up shares of Teladoc, even as the telehealth pioneer has seen its stock plummet 88% since last year's all-time high. Even after a brutal quarterly report last month, Wood has continued to make Teladoc one of her larger positions. Ark ETFs currently own nearly 12% of the company.
Growth has slowed considerably at Teladoc. Revenue rose 18% in its most recent report, the fifth consecutive quarter of sharply decelerating year-over-year top-line gains. The red ink has been substantial, though nearly all of the $3.1 billion hit came form a $3 billion goodwill writedown related to an earlier acquisition.
Teladoc now expects revenue to land at the low end of its full-year range. In short, Teladoc expects the second half to see revenue growth continue to decelerate. It also sees its paid U.S. membership base -- currently 56.6 million -- to dip slightly in the current quarter. Teladoc's platform still makes sense. The ability to receive medical consultations online finds everyone winning, as folks don't have to spend time on transportation and hanging out in a waiting room. Insurance companies have smaller tabs to cover. Businesses get their employees back sooner. The growing pains are real, but Teladoc is still moving in the right direction.
Investors aren't excited in the marvels of 3D printing these days, and it shows in the chart of Markforged. Like Teladoc, Markforged has also plummeted more than 80% since peaking early last year. Markforged makes industrial 3D printers. Its customers use Markforged printers to generate metal, plastic, and continuous-fiber parts.
Markforged shares took a hit last week after it posted fresh financial results. Revenue growth of 19% is actually stronger than the single-digit gains it posted in back-to-back quarters before last week's report. The rub in last week's update came in Markforged's guidance. It warned that it will fall short of Wall Street revenue targets for the balance of the year, a bitter pill to swallow after Markforged was talking up strong demand for its newest FX20 printer. Its high-end 3D printers can do a lot, but apparently not fabricate a stronger growth story.
As far as Teladoc and Markforged have fallen, they're left holding Invitae's beer. The medical genetics specialists has fallen 93% since peaking near the end of 2020. It's not all bad news for Invitae.
Last week's earnings report offered some glimmers of hope, starting with a respectable 18% increase in revenue and a beat on the bottom line. Improving margins and cash burn rates are always a good look for an out-of-favor company trying to get back on track. There are also new guidelines when it comes to genetic testing for colorectal cancer that could improv Invitae's chances to succeed.
Teladoc, Markforged, and Invitae have all seen their shares fall sharply since peaking. Yet they continue to be strong growth stocks, cranking out impressive double-digit percentage revenue gains. Wood seems to have the right idea here.
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