Cathie Wood closed out July on a buying spree. The co-founder and CEO of ARK Investment Management was combing through the second-quarter earnings reports of beaten-down stocks last week, and some of her picks might surprise you.

So what did she buy? Wood's exchange-traded funds (ETFs) added to existing stakes in Roku (ROKU 2.94%), Shopify (SHOP 1.26%), and Teladoc (TDOC 2.46%). Let's see if we can figure out what she sees in these former highfliers that have been abandoned by many investors.

Roku

There's no question that streaming video growth has hit a speed bump in recent months, as people headed back out into the world after enduring pandemic-related restrictions. Yet cord-cutting remains at near-epidemic proportions, and viewers will need to get their entertainment fix somewhere, which suggests that the growth of streaming media is far from over. 

Roku has slumped 82% from its all-time high reached in mid-2021. However, the falling stock price doesn't mean its growth streak is over. Roku's revenue rose 18% year over year in its latest quarter, though it swung to a loss, spooking investors. 

Streaming hours and active accounts grew 19% and 14%, respectively, continuing Roku's unbroken growth streak. Overlooked by investors was the company's average revenue per user (ARPU), which climbed 21%. This means Roku is making more from each successive viewer and suggests that once growth inevitably accelerates, profitability will surge.

Roku is the industry leader in a growing market, and while it has fallen on tough times, the future remains bright, which likely contributed to Wood's decision to buy shares even as the stock slid.

Shopify

Another stock that's been left for dead by investors is Shopify. Investors have convinced themselves that e-commerce growth has peaked, sending Shopify shares down roughly 77% from its high hit late last year.

Yet even as Shopify stock has plunged, growth has trudged higher. In Q2, revenue climbed 16% year over year, even in the face of tough comps, though expenses weighed on the bottom line. Shopify announced a series of cost-cutting measures -- including lay-offs -- that should help it return to profitability. 

While online retail growth has hit a speed bump, it's far from over. In fact, in the 10 years prior to the pandemic, e-commerce sales more than doubled, growing from roughly 4% of total retail to nearly 10%. This suggests the pause in digital sales growth is merely temporary. 

As the leading provider of tools that help merchants join the e-commerce revolution, Shopify is well positioned to benefit from this ongoing trend, which is why Wood continues to buy shares.

Teladoc

There's no doubt that the adoption of telehealth has slowed, weighing on Teladoc's stock price in the process, which is now down 76% from its peak reached early last year. That doesn't mean its growth is over, which is why Wood has been buying Teladoc shares by the fistful.

Q2 revenue grew 18% year over year, and while its losses mounted, much of that was the result of non-cash goodwill impairment charges related to its purchase of Livongo Health. Perhaps more importantly, total patient visits grew by 31% year over year, while its chronic care patients climbed 13%. 

The ease and convenience of telemedicine hasn't changed, and patients who have used virtual consultations to meet with doctors and other medical professionals will continue to do so, though growth may come at a slower pace. Teladoc expects total visits of roughly 19 million in 2022, resulting in revenue growth of about 21% at the midpoint of its guidance. Given the write-offs, it's doubtful the company will be profitable this year, but that thing they say in the exercise community applies just as well to the investing experience. No pain, no gain! Teladoc will get back to making profits in the long run, so investors should pounce while shares are cheap.