Growth stocks roared back to life on Monday, and that was a dinner bell for Cathie Wood. The Ark Invest CEO, chief investment officer, and founder publishes her transactions daily across all of her exchange-traded funds. She was an active shopper on the first trading day of October.
The more interesting additions to her portfolio on Monday were Tesla Motors (TSLA 12.06%), Roblox (RBLX -3.66%), and UiPath (PATH 0.77%). Let's look at her latest shopping haul.
Image source: Getty Images.
Tesla Motors
Wood turned heads last year when she was a routine seller of Tesla, one of her rare holdings that moved higher in 2021. In retrospect, the move makes sense. The maker of aspirational electric vehicles was her top holding through most of last year. As the stock moved higher -- up 50% in 2021 -- while most of her other largest holdings fell sharply, selling Tesla was a diversification ploy.
With Tesla being one of the few growth stocks going the wrong way on Monday, it's easy to see her flipping the script and nibbling on the stock again. Tesla shares tumbled 9% after the company announced weaker-than-expected deliveries for the quarter that ended over the weekend. Tesla held up well earlier this year, when its older rivals started to falter. Investors are concerned that it's now proving mortal, and it has a lot to prove in the new quarter.
Roblox
Did Roblox's popularity peak? The online hub is still magnetic to its largely young audience of social gamers, but it's clearly gowing through growing pains. Roblox got a lot of people through the darkest stretches of the pandemic, but after peaking at 54.1 million daily active users in the first quarter of this year, the audience thinned out to 52.2 million three months later.
Bookings that had already dipped sequentially in the first quarter clocked in a 4% year-over-year decline for the second quarter. Average booking per active user has plummeted 21% over the past year. If monetization is a challenge and growth is going the wrong way, can Roblox get its mojo back? It's hard for a platform to bounce back after its fickle audience starts to move on, but as with Tesla, we'll have to see if the recent setback is temporary or a problematic trend.
UiPath
Wood was quiet on the buying front late last week. She only sold stocks on Wednesday. She only added to two different stocks on Thursday, and only added to one of them on Friday. What was the stock? Let's just say that Monday was the third consecutive trading day Ark Invest was buying shares of UiPath.
The provider of enterprise software for companies looking to implement robotics and automation is a broken IPO, just like Roblox. UiPath went public at $56 and traded as high as $90 shortly after going public in the springtime of last year. It's now down to the pre-teens. Growth is decelerating, even if many companies would love be checking in these days with the 24% year-over-year growth UiPath posted in its latest quarter. That would've been a heartier 35% on a constant currency basis. The problem is that it will continue to lean into the brake pedal in the near term. UiPath sees revenue growth for the entire fiscal 2023 year to rise just 12% to 13%, or 22% before currency exchange translations.
There are a few silver linings. Its dollar-based net retention rate is clocking in at a robust 132%, implying that returning customers are spending 32% more over the past year than they did the 12 months before that. UiPath also has a cash-rich and debt-free balance sheet. Recently crossing the $1 billion mark in terms of annualized recurring revenue, UiPath is in the right place as companies look to save on labor costs and produce more efficiently through robotics and automation. It just may not be the right time.
Tesla Motors, Roblox, and UiPath were intriguing additions on Wood's shopping list on Monday. It will be interesting to see if she continues loading up on those out-of-favor growth stocks.
