Cathie Wood’s exchange-traded funds (ETFs) got a breath of fresh air this week. The ARK Innovation ETF (NYSEMKT:ARKK) ended the period up more than 12%.
Wood admitted that she thinks the United States is currently in a recession. However, the ETF manager also believes that growth stocks have bottomed, while inflation has peaked. She says:
Generally, growth stocks will outperform as we move towards the end of a bear market and the end of a recession, as they are the new leadership. It looks like we bottomed out on an intraday basis based on our flagship strategy on May 12th.
An end to a bear market would prove advantageous for ARKK, as the ETF is down 48% year-to-date (YTD). With that in mind, let’s take a look at the top stocks Wood has bought this week.
5 Best Stocks Cathie Wood Has Bought This Week
1. Teladoc (TDOC)
Like last week, Wood continued to buy Teladoc (NYSE:TDOC). On August 2, she bought 77,799 shares of TDOC through four of her ETFs. After the purchases, Ark Invest now holds a total of 18.57 million shares, making it the fifth largest position among all Ark ETFs. Otherwise, Cathie’s Ark reports that Ark Invest owns 11.48% of all outstanding TDOC shares.
The purchase comes after the telehealth provider reported revenue. Most notable was a $3 billion impairment charge that resulted in a loss of earnings per share of $19.22. The impairment charge was attributed to the company’s purchase of Livongo for $18.5 billion at the end of 2020.
Still, the rise in monkeypox cases across the country may act as a positive catalyst for Teladoc. In the event of a lockdown or a recommendation to stay indoors, TDOC should see significant gains.
2. Markforged (MKFG)
From August 1 to August 4, Wood purchased 417,345 shares of Brandforged (NYSE:MKFG) via two of its ETFs. These purchases can be seen as a bet towards positive earnings, as the company will release its financial results on August 11. Analysts expect revenue of $22.46 million and an EPS loss of 9 cents. The revenue estimate would imply an annual growth of 10%.
Markforged is a 3D printing and materials company. The company also offers software to enhance and enhance the 3D printing process. In July, Markforged announced that it had acquired Digital Metal. Digital has a binder jetting solution, which will enhance “Markforged’s capabilities in high throughput production of metal additive parts.” Additionally, the acquisition will help MKFG scale its additive manufacturing technology.
3. Pacific Biosciences (PACB)
Pacific Biosciences (NASDAQ:PACB) is dedicated to the development and sale of a genetic analysis platform. On August 4, ARKK bought 113,483 shares of PACB, while the ARK Genomic Revolution ETF (BATS:ARKG) bought 98,284 shares. The purchases came a day after Pacific released its second-quarter results. Since then, shares of PACB have risen more than 10% and ended the week up more than 30%.
The company reported revenue of $35.5 million, up 16% year-on-year. Of the revenue, $15.6 million was attributable to instrument sales, $14.6 million to consumables, and $5.3 million to services and other revenue.
Meanwhile, Pacific has shipped 36 of its Sequel II/IIe systems, up from 38 shipments a year ago. Still, profitability remains an issue, as the company reported a net loss of $71.4 million, compared to $41 million year-on-year. However, investors were clearly unfazed, as evidenced by the following price action.
4. EXACT Sciences (EXAS)
On August 3 and 4, ARKK purchased 48,434 shares of Exact Sciences (NASDAQ:EXA). After purchases, EXAS is now the largest holding in ARKG’s portfolio. This happened after the company announced its earnings on August 2. As a result, investors can assume Wood was impressed with the financial results. During earnings, EXAS shares fell but have since recovered some of their losses.
The molecular diagnostics company reported revenue of $522 million, beating analysts’ consensus revenue estimate of less than $500 million. Sales of the Cologuard colon cancer test increased approximately 30% and were the largest contributor to revenue. However, EXAS fell after the company lowered its full-year revenue forecast. Revenue is now expected to be between $1.98 billion and $2.02 billion. Previous forecasts called for revenue between $1.98 billion and $2.03 billion. The Precision Oncology forecast was also lowered, while the Screening revenue forecast remained constant.
5. Personalis (PSNL)
Similar to his PACB purchase, Wood purchased shares of Custom (NASDAQ:PSNL) before the company releases its results on August 3 after market close. She bought 20,386 shares on the day of the earnings and 28,048 shares the following day. Since the August 3 close, shares of PSNL have risen more than 10%.
Personalis supports the development of personalized cancer vaccines through genomic sequencing and analysis. For the second quarter, the company posted revenue of $18.24 million, up from $21.67 million a year ago. Still, revenues beat the Zacks consensus estimate of more than 20%. On top of that, EPS recorded a loss of 60 cents, which also exceeded the estimate for a loss of 63 cents. Over the past four quarters, Personalis has exceeded EPS estimates twice.
Shares of PSNL ended the day up more than 10%.
At the date of publication, Eddie Pan held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.
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