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Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

By Rick Munarriz – Aug 26, 2021 at 10:05AM

Key Points

  • Cathie Wood's ETFs added to some of her largest positions, which happen to be trading at least 40% below their 52-week highs.
  • Teladoc and Coinbase are the second and third largest holdings across all of the ARK Invest ETFs.
  • 3D Systems is a new impulse buy, but after holding off on purchases since early May and actually lightening her position this summer, Wood has bought into the 3D printing bellwether on three consecutive trading days.

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The popular ETF growth investor is finding buying opportunities in some out-of-favor but promising stocks.

It's fair to say that ARK Invest's CEO Cathie Wood never stands still. The world-class growth investor is always making moves, and she doesn't have a problem letting investors in her exchange-traded funds (ETFs) know all about it.

Wood did a lot of shopping on Wednesday, buying into some stocks that are trading well below their previous highs. She added to her existing positions in 3D Systems (DDD 0.49%), Coinbase Global (COIN 5.30%), and Teladoc Health (TDOC 0.69%), three once red-hot stocks that are now fetching 40% to 53% less than they were just a couple of months ago. Let's take a closer look at the three stocks she just bought.

A couple pushing a huge piggy bank up an incline.

Image source: Getty Images.

3D Systems

A blast from the past for growth investors is picking up steam at ARK Invest this week. Wood was selling 3D Systems in June and earlier this month, but she's now added to her stake in the 3D printing leader on each of the first three trading days of this week.

What changed at 3D Systems? A blowout earnings report two weeks ago is helping its cause. Revenue rose 44% in the second quarter, well ahead of the 27% that analysts were targeting. Adjusted earnings also clocked in at more than double what Wall Street pros were forecasting.

3D Systems is gaining momentum again, and it's also making moves. It recently announced plans to divest its medical simulation and on-demand manufacturing businesses, to focus on 3D printing machines that are being increasingly used by the healthcare industry.

Coinbase

Buying Coinbase has been a guilty pleasure at ARK Invest since the leading crypto exchange went public in April. It checks off some of Wood's boxes in terms of growth, niche leadership, and crypto.

Business is on a roll this year: Revenue soared 853% in the first quarter of this year, and that's not a typo. Coinbase followed that with a 1,097% year-over-year top-line burst in its latest quarterly report, and that's not a typo either.

The stock retreated after the report, on concerns that trading activity was slowing in the current quarter. However, crypto has been rallying in recent weeks and Coinbase dominates its niche, which will thrive through the volatility. So it's not a surprise that Wood is now adding to the stock that has become the third largest position across all of her ETFs. With Coinbase recently putting its money where its mouth is -- promising to invest at least 10% of its future profits in crypto -- it's becoming even more of a play on the cryptocurrency market.

Teladoc

There are only two stocks that take up a larger combined position at ARK Invest than Coinbase, and one of them is Teladoc. The telehealth leader allows folks seeking a consultation for any of a growing number of medical needs to meet virtually with healthcare providers. It's faster, cheaper, and ultimately more convenient than traditional in-office care.

Despite the no-brainer appeal of telemedicine even in a post-pandemic landscape, investors have cooled on Teladoc. Wood naturally sees things differently. She's been building up her position this summer, including purchases on Tuesday and now Wednesday of this week.

Revenue more than doubled in the company's latest quarter, even if it was helped by last year's Livongo Health acquisition. Teladoc continues to build up hefty losses, but growth investors can be patient as long as the bullish thesis for telehealth remains.

Rick Munarriz owns shares of Coinbase Global and Teladoc Health. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool recommends 3D Systems. The Motley Fool has a disclosure policy.

Stocks Mentioned

3D Systems Stock Quote
3D Systems
DDD
$10.18 (0.49%) $0.05
Teladoc Health Stock Quote
Teladoc Health
TDOC
$29.20 (0.69%) $0.20
Coinbase Global Stock Quote
Coinbase Global
COIN
$47.67 (5.30%) $2.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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