Cathie Wood goes bargain hunting: 3 stocks she just bought

ARK Invest’s chief stock picker just added to some positions that have lost significant value in 2021.

| More on:
3 asx shares represented by investor holding up 3 fingers

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on All figures quoted in US dollars unless otherwise stated.

This has been a tough year for ARK Invest founder and CEO Cathie Wood. Her style of investing has fallen out of favor, and many of her larger holdings have shed more than half of their peak values.

Among her funds' holdings, Twilio (NYSE: TWLO), Zoom Video Communications (NASDAQ: ZM), and Toast (NYSE: TOST) are down by 43%, 56%, and 50%, respectively, from the all-time highs they hit earlier this year. ARK Invest added to all three positions on Wednesday.


The best performer on this list -- relatively speaking, of course -- is Twilio, which has shed more than 40% of its value since peaking in February. It's a pretty dynamic company, providing developers of some of the most popular smartphone apps with in-app communication solutions. 

What does this mean exactly? Well, if you're hailing a ride, it's Twilio helping you communicate with your driver. Twilio can help parties communicate by text or voice without having to leave a business's app or reveal sensitive contact information. Its success is tethered to the success of its active customers, which now number more than 250,000. Its dollar-based net expansion rate of 131% means that its returning developer clients are, on average, spending 31% more with Twilio than they were a year ago. This is a testament to both increased usage volume and the company's ability to "land and expand" with other platform offerings. 

Twilio's revenue soared by 65% in its latest quarter, but acquisitions have typically padded its top line. Organic revenue rose by just 38%, and that result didn't please the market despite it being a healthy rate of year-over-year improvement. Investors are also concerned about larger than expected losses in Twilio's refreshed guidance, but you have to give the company the benefit of the doubt when it comes to investing in its future. 

Zoom Video Communications

Another stock that was doing poorly this year even before its latest financial update sent the shares even lower is Zoom. The videoconferencing giant erupted onto the scene early last year when people found themselves in sudden need of an intuitive videoconferencing solution that would allow them to keep learning, working, and socializing during the early months of the COVID-19 crisis. 

The public isn't as interested in the stock these days, but the irony here is that Zoom is still growing, even as we're now in the third quarter of lapping pandemic-era financials. Its revenue rose 35% in its most recent quarter, beating expectations and signaling that the platform's premium subscriptions are still essential purchases. Management is guiding for growth to decelerate to 19% in the current quarter, and even a recently botched acquisition isn't stopping the company from expanding its offerings to take advantage of its still sizable audience. 


Restaurants are Toast these days, and that capitalization isn't a typo. More than 48,000 restaurants are leaning heavily on Toast, a cloud-based platform that manages everything from incoming orders to inventory management to customer loyalty programs. 

Revenue skyrocketed by 105% through the first nine months of this year, and that was after climbing 24% in 2020 when most eateries were running with scaled-back operations. As we venture out to our favorite restaurants again -- and as Toast helps owners with the tech required to handle the boom in digital take-out and third-party delivery app orders -- Toast is well-positioned as a reopening play. But the stock has shed half of its value since peaking shortly after the company went public in late September.  

Twilio, Zoom, and Toast remain viable growth stocks. They're just a lot cheaper now than they were earlier this year, and ARK Invest's Wood isn't afraid to follow some of her favorite stocks lower. 

This article was originally published on All figures quoted in US dollars unless otherwise stated.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Twilio and Zoom Video Communications. The Motley Fool Australia has recommended Twilio and Zoom Video Communications. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

blue tesla
International Stock News

Investors should wait for these 2 signals before buying Tesla

Tesla's stock price might have fallen, but buying today does not guarantee good returns to investors.

Read more »

woman delivering Amazon Prime parcel
International Stock News

Why the Amazon share price rose today

Positive inflation news bodes well for the e-commerce leader.

Read more »

man happy while driving tesla
International Stock News

Why today’s jump in Tesla shares surprised investors

Musk may be selling shares, but investors aren't reading too much into it.

Read more »

Green arrow with green stock prices symbolising a rising share price.
International Stock News

Why Bitcoin and Ethereum are rising today

New data hinted that inflation may have peaked in July.

Read more »

Purple tech growth chart
International Stock News

Nasdaq surges after inflation data: Why the top tech and growth stocks moved higher

Although inflation is still above 8%, investors are starting to come back to growth stocks. There will be a lot…

Read more »

A man wearing a blue jumper and a hat looks at his laptop with a distressed and fearful look on his face as he reads about the Core Lithium share price falling 30% in a month
International Stock News

Elon Musk just sold US$7 billion worth of Tesla shares. What’s going on?

The enigmatic CEO offloaded shares in his high-profile company. What gives?

Read more »

Downward spike graph
International Stock News

Why Bitcoin, Ethereum, and Shiba Inu are falling today

Cryptocurrencies fell along with tech stocks as investors await key inflation data.

Read more »

Man pumping petrol
International Stock News

Why the Tesla share price sank today

Several bits of news caused these EV stocks to slide today.

Read more »