Cathie Wood is always making moves, and the primary decision maker for the Ark Invest family of exchange-traded funds (ETFs) makes it easy to play along. She publishers her firm's purchases and divestitures a couple of hours after the end of the trading day. What is she buying these days?
Wood added to her existing positions in Joby Aviation (JOBY 2.88%), Coinbase Global (COIN 1.54%), and Block (SQ +2.96%) on Monday. Let's look at the stocks she bought earlier this week.
NYSE: JOBY
Key Data Points
Joby Aviation
You might not realize it, but there are at least three publicly traded companies specializing in air-taxi services. Spoiler alert: Wood happens to own all three of the leading players. Joby Aviation is the largest of the players by market cap, commanding more than double the market cap of its two peers combined.
It's not the leader by top-line results. Joby is still a pre-revenue company, winding its way through the certification process and assembling its fleet of small electric aircraft capable of vertical takeoffs and landings (or eVTOLs, for short). It does have a juicy investor in Delta Air Lines (DAL 3.95%), which has poured in at least $60 million.
More importantly, Delta is ready to pair up with Joby when it's ready to give Delta passengers in major markets -- including Los Angeles and New York City -- a new way to get from the airport to the heart of the city in a fraction of the time and a lot more in style points.
Image source: Getty Images.
The Joby story will take time to play out, and not every investor has the patience to see it through. Deutsche Bank (DB 2.67%) downgraded the stock earlier this month from hold to sell, slashing its price target from $6 to $4.
The analyst believes that there are valuation and development risks with Joby. Short flight times between battery charges and weight-management issues remain obstacles to expand the model, but in the right economy, folks won't flinch at paying a premium to get where they want to be faster than before.
NASDAQ: COIN
Key Data Points
Coinbase Global
Shares of Coinbase tumbled 8% on Monday, and that was apparently a dinner bell for Wood to continue buying one of her largest holdings. The catalyst for the sell-off in an otherwise stable trading day was a downgrade by Benjamin Budish at Barclays. The analyst slashed his price target from $86 to $70, barely above where Coinbase stock was heading out of the weekend.
Budish is concerned about the Wells Notice that Coinbase received from the Securities and Exchange Commission last week, alleging violations of federal securities laws. Regulatory risks could naturally hurt Coinbase if it limits its flexibility to offer staking rewards and alt-coin trading. The analyst is sticking to his neutral rating on the shares. Coinbase is the second largest holding across all of Ark Invest's funds.
NYSE: SQ
Key Data Points
Block
Wood is a believer in fintech, and Block has emerged as a leader with a couple of strong platforms. The company was formerly known as Square, named after the transactions-settling platform allowing any merchant to easily accept credit cards for payment. It has also seen big gains for CashApp, its consumer payments app that now serves 51 million monthly transacting actives.
Block stock has been moving higher in 2023 after a pair of off years, but it did receive a pair of cautious Wall Street notes on Tuesday. Analysts at Mizuho and Morgan Stanley are lowering their price targets on the stock.
The shares took a hit last week after noted worrywart Hindenburg Research put out a short report on Block, calling CashApp a hotbed of fraud and fake accounts. It argues that there are a lot fewer unique individuals behind its reported 51 million monthly transacting active accounts.
Time will tell if the allegations are baseless or on target, but analysts are paring back their valuation multiples in light of the uncertainties raised. You know how Wood approaches these situations: She sees the markdowns as an opportunity to buy a leading fintech stock at a discount.
