Cathie Wood is a very good investor. That's evidenced by the fact that she runs two of the top three best-performing non-leveraged exchange-traded funds (ETFs) over the past five years. And another two of her ETFs rank in the top 20 best performers during this time period.
But Wood isn't perfect. She sometimes invests in stocks that turn out to be duds. She also sometimes sells shares of companies that have excellent prospects to be winners over the long term. Here are three stocks Wood is selling that are still great picks to buy and hold.
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1. Meta Platforms
Wood's ARK Fintech Innovation ETF (ARKF) and ARK Next Generation Internet ETF (ARKW) have sold shares of Meta Platforms (META 1.54%) in recent weeks. Although Meta is still in both ETF portfolios, it's not a top 20 holding for either of them.
Some might knock the name change from Facebook to Meta Platforms, but I think it was a smart move. Social media is the present for the company, but the metaverse is its future. And the new name reminds investors just how important the metaverse is for Meta.
Meta's social media apps -- Facebook, Instagram, Messenger, and WhatsApp -- aren't going away anytime soon. Despite some negative publicity this year, Meta should be able to count on continued revenue growth and massive profits.
The company will pour much of those profits into funding its metaverse development efforts. Sure, it's possible that the hype around the metaverse could be overblown. However, my prediction is that hundreds of billions of dollars will be made in the virtual world in the coming years. And I expect that Meta will be one of the multiverse stocks that could make investors a fortune.
2. PayPal Holdings
The ARKF and ARKW ETFs have also sold shares of PayPal Holdings (PYPL -1.83%) over the last several weeks. While PayPal still ranks No. 24 in ARKF's holdings, it's no longer owned by ARKW.
I can understand why Wood (and other investors) might be more enamored by other fintech stocks these days. However, PayPal still has a lot of room to run, in my view.
For one thing, Amazon.com will allow PayPal's Venmo app to be used to pay for purchases on its e-commerce site beginning in 2022. This could boost Venmo's revenue significantly.
PayPal continues to grow robustly. Its valuation is reasonable compared to most of its rivals. The tailwinds for digital payments are so great that there will almost certainly be multiple winners. I think that PayPal will be one of those winners over the next decade and beyond.
3. Vertex Pharmaceuticals
Wood's ARK Genomic Revolution ETF (ARKG) sold nearly 234,000 shares of Vertex Pharmaceuticals (VRTX 0.10%) in the last week of November. That's turned out to be poor timing.
Earlier this week, Vertex announced positive results from a phase 2 study of VX-147 in treating a rare genetic kidney disease called APOL1-mediated focal segmental glomerulosclerosis (FSGS). The biotech stock jumped on the news. Vertex now plans to advance VX-147 into pivotal clinical studies in the first quarter of 2022 targeting APOL1-mediated kidney disease, including FSGS.
VX-147 isn't Vertex's only promising pipeline candidate. The company and its partner CRISPR Therapeutics hope to file for regulatory approvals by the end of 2022 for gene-editing therapy CTX001 in treating the rare blood diseases beta-thalassemia and sickle cell disease. Vertex also has other intriguing pipeline programs, notably including its cell therapy for treating type 1 diabetes.
Meanwhile, Vertex's cystic fibrosis (CF) franchise continues to rake in billions of dollars. The company still has a significant growth opportunity in CF as it secures reimbursement deals and expands its regulatory approvals to include younger ages.
Wood apparently still believes in Vertex's long-term potential. Even with the recent sales, the stock remains in the top 10 holdings of the ARKG ETF. I think that optimistic outlook is warranted. Vertex could be a big winner over the next few years.
