Let's not try to jinx things by calling attention to this, but Cathie Wood's on a roll this year. The largest of the exchange-traded funds she runs at Ark Investment Management is up nearly 23% this month. Momentum is back after a punishing last two years.
Ark publishes its daily buys and sells, and it did a little shopping on Thursday. Wood added to her existing stakes in Pinterest (PINS +0.00%), CareDx (CDNA 4.39%), and Teladoc Health (TDOC 2.23%) yesterday. Let's take a closer look.
NYSE: PINS
Key Data Points
1. Pinterest
Pinterest went from initial pandemic hero to a reopening play zero, but it's clawing its way back these days. The visual search engine that helped users with recipes and room design tips as they hunkered down in 2020 is now trading closer to its 52-week high than its low.
Pinterest's revenue surged 48% in 2020 when many consumer-facing businesses went the other way, accelerating to 52% in 2021. Growth has decelerated sharply since then, chiming in with single-digit growth in back-to-back quarters. Analysts are bracing for even lower single-digit growth when it reports its fourth-quarter results in two weeks.
Image source: Getty Images.
It's not standing still. As a free social platform, Pinterest has always been at the mercy of the advertising market. It's a dangerous place to be in an iffy economy, but Pinterest has another card up its sleeve. The platform is hoping to cash in on e-commerce, and as an imagination swizzle stick it's a strategy that makes sense. If folks are bookmarking posts on fashion, decor, and travel there's an e-commerce monetization opportunity waiting to happen.
Pinterest will need more than just a new ecosystem to mine. Active users peaked two years ago. It will need to keep attracting folks to the platform to turn its moneymaking dreams into a reality.
NASDAQ: CDNA
Key Data Points
2. CareDx
CareDx was another Wood buy on Thursday. The healthcare solutions provider serves pre- and post-transplant patients, an important market where demand perpetually outweighs supply. It's also the leading provider of genomics-based information for transplant patients. Its long-term plan is to address the needs of total addressable market that weighs in at a $12 billion opportunity.
It posted mixed preliminary financial results earlier this month. The $81.9 million to $82.2 million it expects to officially report in revenue through the final three months of last year skated past the $81.5 million analysts were expecting. However, its first look at fiscal 2023 finds top-line guidance checking in between $321.3 million and $321.6 million. Wall Street pros were parked at $347.7 million.
CareDx is currently posting losses, but it has a healthy cash-rich balance sheet with no long-term debt. It's ready to ride things out.
NYSE: TDOC
Key Data Points
3. Teladoc Health
Let's start by debunking the myth that Teladoc is fading in popularity. The provider of virtual consultations may not be growing as briskly as it did a couple of years ago when folks had no choice but to videoconference with their doctors and wellness specialists, but it's still moving in the right direction. Revenue rose 17% in its latest quarter, and 20% through the first nine months of last year.
Competition is getting fierce, and mounting losses find Teladoc paring back after years of expansion. Just last week it turned heads by announcing it would be laying off 6% of its employees.
The stock has taken a beating -- down 91% since peaking two years ago -- but there's still a heartbeat here. Analysts see double-digit growth for the next few years, and they see losses continuing to narrow before turning a profit in three years. There aren't too many investors sharing Wood's enthusiasm for Teladoc, but its long-term prognosis is better than the current sentiment. The doctor may literally be in now, but telemedicine stocks aren't going away.
