There probably isn't a money manager that's as closely watched as ARK Invest CEO, CIO, and founder Cathie Wood. Her returns last year were astronomical, and she makes it easy to cheer along by providing the public with her daily transactions at the end of the trading day.
The market didn't take Wednesday off, and neither did Wood. She bought and sold several positions in her ETFs. Some of the more interesting tech additions to her portfolio were Robinhood Markets (HOOD +4.87%), PagerDuty (PD 5.35%), and UiPath (PATH 1.21%). Let's take a closer look at Wednesday's shopping list.
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Robinhood Markets
It's been a wild summer for Robinhood since the online trading platform went public. Robinhood kicked things off as a broken IPO through its first few days of trading, before exploding higher with all the makings of becoming the next meme stock. Robinhood has gone on to give back most of its gains, and it's a bad trading day away from becoming a broken IPO again.
Robinhood came through with explosive growth in last month's second-quarter report. Net revenue soared 131% to $565 million. Unfortunately for Robinhood, less than 10% of that revenue is stemming from stock trades -- and that line item saw its results decline 26% over the past year. Cryptocurrency revenue has emerged from negligible a year ago to account for 41% of the top-line mix. Options trading increased 48%, making up 29% of the total net revenue.
There's obviously good money to be made as a platform for crypto and options trading, but is that a recipe for disaster? Robinhood's young and largely inexperienced user base is a trigger-happy lot. Will Robinhood users be the next great generation of investors, or will they day trade through risky wagers? The upside is high if Robinhood makes the most of its 21.3 million monthly active users with more than $100 billion in assets parked on the platform. The downside potential is also substantial.
PagerDuty
Wood added to her PagerDuty stakes in a pair of her ETFs on Wednesday. The cloud-based provider of enterprise analytics and uptime monitoring isn't growing as quickly as Robinhood, but its gains could be more sustainable.
Revenue rose 33% in the second-quarter report PagerDuty posted two weeks ago. The company is not profitable, but it has an engaged customer base. Dollar-based net retention rate is clocking in at 126%, and that means returning customers are spending 26% more on PagerDuty's growing array of services than they were a year earlier.
The net retention rate was impressive, as PagerDuty had seen that metric whittle away from 140% down to 121% through its first two years of quarterly reports. That the rate's moving higher again bodes well for PagerDuty's near-term performance. PagerDuty posted the weakest top-line growth of the three names on this list in its latest quarter, but it was also the only one to move higher on earnings news.
UiPath
UiPath is another stock that Wood added to two of her ARK Invest ETFs on Wednesday. Robotics and automation are big themes for the workforce, and UiPath is a leading provider of enterprise software to make it happen.
The stock did sell off after UiPath delivered fiscal second-quarter results last week. Reported revenue rose 40%, but its annualized renewal run rate is growing at a blistering 60% pace. It was technically a "beat and raise" performance, but the performance shows marked deceleration from the 81% revenue growth it posted for all of fiscal 2021 and the 65% increase it came through with for reported revenue in the fiscal first quarter of 2022.
At least five analysts would go on to slash their price targets on the stock following last week's report, but Wood isn't afraid to go bargain hunting. UiPath's strong dollar-based net retention rate of 144% is impressive despite the stock selling off in response to the slowing financial performance.
Robinhood, PagerDuty, and UiPath were intriguing additions on Wood's shopping list on Wednesday. Now we'll keep watching to see if she continues loading up on those positions.
