There never seems to be a bad time for Cathie Wood to reshape her portfolios. The founder, CEO, and main stock-picker for the Ark Invest family of exchange-traded funds has been busy adding to some of her positions this week. She has also been pruning some of her holdings, but let's talk about the buys.
Wood added to existing positions in Meta Platforms (META 0.43%), Recursion Pharmaceuticals (RXRX 3.57%), and Ginkgo Bioworks (DNA 10.60%) this week. Let's take a closer look.
1. Meta Platforms
One of last year's biggest winners was Facebook parent Meta Platforms. The stock nearly tripled last year, up 194%. I know I wasn't the only investor who shook my head when Facebook changed its corporate moniker to Meta in the fall of 2021. I guess CEO Mark Zuckerberg is getting the last laugh now.
The social media giant's dream of embracing the virtual realm of the metaverse hasn't exactly been fulfilled. The Meta Quest virtual reality headset remains a niche product. However, its family of apps that includes Facebook, Instagram, and WhatsApp remains ridiculously magnetic, attracting 3.96 million monthly active users.
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Revenue rose 21% to a whopping $34.2 billion in constant currency in its latest quarter. A 31% jump in ad impressions across its offerings was the biggest driver, even if the average revenue per ad took a 6% dip.
Despite the stock's surge since bottoming out in late 2022, Wood believes that it can keep going higher. Why else would she have bought more shares of Meta on Monday? She wasn't the only one feeling more bullish about Meta. Citi raised its price target on the shares a day later.
Citi analyst Ronald Josey is bumping the stock's price target from $425 to $440, naturally sticking to a bullish buy rating. Josey's read is that the online advertising market got stronger in the fourth quarter, and that bodes well heading into Meta's financial update next week. The successful monetization of Facebook's Reels, promising new ad products, and its overall sticky engagement make the stock Citi's top internet stock for 2024.
2. Recursion Pharmaceuticals
If you follow Wood's daily market transactions it's obvious that she's warming to Recursion Pharmaceuticals in a major way. She has added to her position for 12 consecutive trading days through Wednesday of this week. Unlike Meta -- a household name and one of just six stocks with market caps north of $1 trillion -- Recursion is a small stock with a $2.2 billion market cap.
Recursion is a clinical stage techbio company. It offers an operating system that leverages machine learning algorithms and searchable biology and chemistry relationships to help speed up the development of potential treatments. It has just $47 million in trailing revenue, and it's understandably years away from profitability. However, it's been striking deals to expand the reach of its Recursion OS platform and beef up its artificial intelligence goals. Wood's fresh purchases now find her owning more than 10% of Recursion's outstanding shares.
3. Ginkgo Bioworks
Many of Wood's stock purchases have been in the biotech space. She has now added to her Ginkgo Bioworks stake for six straight trading days. The biosecurity and biofoundry specialist posted mixed financial results in its latest quarter, but it comforted investors earlier this month by announcing preliminary financial results for fiscal 2023.
It continues to expect to report between $250 million and $260 million in revenue for all of last year, based on preliminary unaudited estimates. Ginkgo Bioworks is encouraged by its strong performance in cell engineering revenue and cash-rich balance sheet. Wood is a believer. She now owns nearly 11% of the stock's total shares.
