How successful of an investor is Cathie Wood? Consider that over the last five years, the two best-performing non-leveraged exchange-traded funds (ETFs) were her ARK Next Generation Internet ETF and ARK Innovation ETF. And her ARK Genomic Revolution ETF came in at No. 5.
The kinds of stocks that Wood likes aren't for everyone. They're often high-risk, potentially high-reward plays that are suitable only for aggressive investors. If you don't mind taking on considerable risk, here are three stocks Wood is buying that you might want to consider too.
1. Beam Therapeutics
Both the ARK Innovation ETF and ARK Genomic Revolution ETF have scooped up more shares of Beam Therapeutics (BEAM -1.33%) in October. The biotech stock is only one spot away from jumping into the top 10 holdings for the ARKG ETF.
Beam specialized in base editing. It's a type of gene editing that enables pinpoint rewriting of a specific letter in the genome. And Beam's approach could prove to be more important over the long run than other types of gene editing.
The company doesn't have any candidates in clinical testing yet. That could change relatively soon, though, with Beam on track to submit an Investigational New Drug (IND) application within the next couple of months for BEAM-101 in treating rare blood disorders beta-thalassemia and sickle cell disease.
Beam's market cap stands above $6 billion. That's a quite lofty valuation for a preclinical-stage biotech. However, if the company's base editing works in one indication, it could potentially be applied in many other indications. Wood obviously thinks the chances that will happen are worth placing a major bet on Beam Therapeutics.
2. CRISPR Therapeutics
Beam Therapeutics isn't the only gene-editing stock that Wood likes these days. Her ARK Innovation ETF and ARK Genomic Revolution ETF have also added to their positions in CRISPR Therapeutics (CRSP -0.55%) in recent weeks.
CRISPR Therapeutics could become the first biotech focused on CRISPR gene editing to have a shot at getting a product on the market. The company and its partner Vertex Pharmaceuticals hope to file for regulatory approvals of CTX001 in 2023. CTX001 is a CRISPR gene-editing therapy targeting beta-thalassemia and sickle cell disease.
Some investors were disappointed with the durability of response in CRISPR Therapeutics' phase 1 data for its off-the-shelf chimeric antigen receptor T cell (CAR-T) therapy CTX110. However, the day after those results were announced, Wood chose to buy more shares of the stock at a discount.
CRISPR Therapeutics' market cap of over $7 billion might be hard to swallow for cautious investors. But with the prospects of potentially launching its first product in 2024 and a still-promising pipeline of gene-editing therapies, the company could become a big player in healthcare over the long run.
3. Teladoc Health
There's no question that Teladoc Health (TDOC 2.25%) remains one of Wood's favorite stocks. So far in October, three of her ARK ETFs have bought additional Teladoc shares. Teladoc ranks as the top holding of the ARK Genomic Revolution ETF. It's the second-largest position in the ARK Innovation ETF. The telehealth stock is even in the top 10 for the ARK Fintech Innovation ETF.
Some investors have soured on Teladoc this year due to concerns about slowing membership growth. However, the company continues to perform well overall. Visits have risen. Revenue per member per month is up. Utilization rates are climbing.
On the other hand, Wall Street hasn't given up on the stock. Analysts think that Teladoc could soar close to 40% over the next 12 months. This optimism about Teladoc from both Wood and Wall Street centers on the company's long-term prospects.
The virtual care market remains only in its early stages. Teladoc is the clear leader in the market. It also continues to launch new products and services that provide further competitive advantages. Of these three stocks being bought by Wood recently, Teladoc is the least risky while still offering strong growth prospects.