Cathie Wood is one of the easiest growth investors to follow. Every trading day, she posts her daily transactions for the Ark Invest family of aggressive growth exchange-traded funds. She was particularly busy in kicking off the new trading week.
What did Wood buy on Monday? She added to her existing stakes in Tesla Motors (TSLA 4.96%), Pinterest (PINS -0.64%), and Roku (ROKU 1.58%) yesterday. Let's take a closer look.
1. Tesla Motors
The electric-vehicle leader's stock has been moving as fast as its signature cars, but unfortunately sometimes it's stuck in reverse. Tesla stock is trading 57% below last year's all-time high, but it has bounced back in a major way since bottoming out in early January.
Tesla has been resilient. The stock was downgraded ahead of Monday's open, and it still closed higher. Wolfe Research is lowering its rating on the shares from outperform to peer perform, arguing that macro challenges are weighing on big-ticket purchases. Tesla's recent price slash on its cars is a sign that it's not immune from a global economic slowdown.
Image source: Getty Images.
This isn't the only time the stock has bucked in a different direction than the fundamentals. Tesla has been moving higher over the past two months, just as its profit targets are going the other way. Tesla stock has risen 71% since hitting a two-year low in the first week of 2023. In that time, Wall Street pros that were expecting earnings per share of $5.54 this year and $6.85 come 2024 are now forecasting $3.92 and $5.49, respectively.
Analysts have been whittling down their bottom-line projections following price cuts in its key U.S. and Chinese markets. The reductions were initially done in response to meeting pricing requirements for buyer tax credits in the U.S. and gaining market share in China. You don't typically see a stock move higher on margin-thinning price cuts, but it's also cutthroat move in an industry where many of its rivals don't have the same kind of pricing flexibility.
2. Pinterest
Growth has slowed at Pinterest. It has rattled off three consecutive quarters of single-digit revenue growth, decelerating every step of the way. It's a far cry from the 48% and 52% top-line gains it posted in 2020 and 2021, respectively.
The visual search engine is naturally susceptible to the weakening online advertising environment, but it's not helping that profitability is shrinking as expenses continue to rise. Pinterest also revealed last month that its CFO will be stepping down this summer, a move that means all seven of the names executives at the time of its 2019 IPO will no longer have a hand in day-to-day operations.
Pinterest also announced a $500 million share repurchase authorization last month. Pinterest itself thinks that the stock is a bargain, and Wood seems to agree, judging by her buying activity this week.
3. Roku
Roku viewers likely enjoy a good cliffhanger, but investors probably don't feel the same way after a roller-coaster couple of days. The streaming-video pioneer put out a regulatory filing after Friday's market close, alerting shareholders that Roku had $487 million in deposits at the failed Silicon Valley Bank. The stake represents 26% of the cash and equivalents it was reporting in its latest quarter.
Roku and other Silicon Valley Bank accountholders were bailed out over the weekend, and it could be the spark that the out-of-favor leader needed to get back on track. Wolfe Research -- the same firm that downgraded Tesla before Monday's start of trading -- upgraded Roku after the closing bell. Roku stock is going from underperform to peer perform. It's the same rating as Tesla, but one call was an upgrade while the other was a downgrade.
Roku's platform is legit, armed with 70 million active accounts that spend nearly four a day streaming through the operating system on their TVs. It needs to prove that it can overcome its mounting losses. A rebound in the connected TV advertising market also couldn't hurt the bellwether of streaming video stocks .
