Cathie Wood didn't make a lot of moves on Thursday, but she certainly made them count. The CEO, co-founder, and ace stock picker for the Ark Investment family of exchange-traded funds (ETFs) loaded up on a market darling that sold off despite posting better-than-expected financial results. She also added to a pair of gene-targeting upstarts.
Wood added to her stakes in CrowdStrike (CRWD -0.12%), Prime Medicine (PRME -3.12%), and Adaptive Biotechnologies (ADPT -5.50%) on Thursday. She publishes her transactions at the end of every trading day, making it easy to see what she's buying and selling. Let's take a closer look at her three purchases.
CrowdStrike
CrowdStrike came through with a "beat and raise" performance this week, but it wasn't enough. The provider of cloud-based security solutions for enterprises saw its revenue climb 42% to hit $692.6 million in its latest quarter, matching its 42% increase in annual recurring revenue. Analysts were only holding out for a 39% top-line growth spurt.
Its adjusted quarterly profit of $0.57 a share also blasted through Wall Street's target of $0.51 a share. CrowdStrike also surprised itself with its first positive quarterly earnings on a reported basis as a public company.
CrowdStrike raised its full-year guidance, but roughly by the amount of its first-quarter beat. Its initial read on the current quarter is in line with where analysts are presently perched. At least 10 Wall Street firms would go on to raise their price target on the shares, largely CrowdStrike has been on a tear lately.
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The big run heading into Wednesday afternoon's fresh financials could explain why the stock opened more than 8% lower on Thursday. Wood wasn't the only one drawn to the stock as a buying opportunity following its initial sell-off. The stock made back most of its earlier losses, closing the day with a modest 1.6% decline.
The midpoint of its guidance calls for revenue growth to slow to a 35% clip in the fiscal second quarter. Decelerating on the top line and uninspiring billings growth are problematic given the stock's lofty valuations. However, CrowdStrike has routinely set the bar low when it comes to guidance. It doesn't pay to bet against CrowdStrike.
Prime Medicine
Wood has been adding to her gene-editing stocks these days, and Prime Medicine has been a prime candidate. The pre-revenue upstart is setting its sights on gene-editing technology that it claims could tackle 90% of known disease-causing mutations.
Prime Medicine went public at $17 in late October, often trading north of $20 during its first few weeks of trading. It's a broken IPO now, trading in the low teens and even pre-teens for nearly three months. On the other hand, the early-stage biotech mentioned last month that it has enough liquidity on its books to fund its operating expenses and capital expenditures for the next two years.
Prime Medicine is one of the smallest companies in her portfolio. It clocks in at a market cap of just $1.3 billion, but it's not even the least valuable company that she was buying on Thursday.
Adaptive Biotechnologies
Wood has been adding to Adaptive Biotechnologies -- with a market cap barely above $1 billion -- in recent days. Homing in on immune-system genetic sequencing technology, Adaptive hasn't had a problem generating top-line growth. It has posted revenue growth of 15% or better for at least five consecutive years. Revenue rose 20% last year, but the streak could be in jeopardy. Revenue declined 3% through the first three months of the year.
The Food and Drug Administration accepted an application for an investigational new oncology drug candidate last month. It will take time before it potentially moves move the needle, but with the shares trading lower this year, Wood sees this as a buying opportunity.
She's not the only believer of Adaptive Biotechnologies as it meanders in the single digits. Piper Sandler analyst David Westenberg boosted his price target on the shares to $15 after last month's earnings report. The stock would have to double from current levels to reach the price goal.
