These 3 Cathie Wood bearings are set to tear higher by 40% (or more)
Markets lately are a mix of gains and volatility, and it is sometimes difficult for investors to make sense. In times like these, it makes sense to turn to the experts. Cathie Wood is such an expert, an investor whose stock choices have consistently surpassed the overall markets. A protégé of the famous economist Arthur Laffer, the market guru Wood has built his reputation on his clear view of the markets. Her company is Ark Invest, whose Innovation ETF has over $ 52 billion in assets under management, making it one of the largest institutional investors on the scene. And even better, Woods stock choice paid off during the ̵
6;corona year’. The ETF’s total return in 2020 was an astonishing 170%. With such returns, it is clear that Cathie Wood knows what she is talking about when choosing a stock. So we look at three of her stock choices, all from the ‘top 10’ of her firm’s portfolio, by weight percentage in the portfolio. Using the TipRanks platform, we have found that according to some Street analysts, each has at least 40% upward potential in the coming year. Let’s get the downturn. Teladoc Health, Inc. (TDOC) The first stock on our list, Teladoc, was one of the ‘early adoption companies’ in the telecommunications healthcare sector, providing external medical care for non-acute issues. Patients can use Teladoc to consult on ear-nose-throat cases, laboratory referrals, basic diagnoses and medical advice and prescription filling of non-addictive drugs. Teladoc bills its service as offering long distance calls from primary care physicians. Despite the obvious benefits of Teladoc’s pandemic service and ever-increasing revenue, the company’s stock has outperformed the broader markets over the past 12 months. A look at the latest quarterly report – for the 1st quarter 21 – will shed light. The company reported $ 453.6 million on the top line, which is an impressive 150% year-over-year. However, earnings told a different story. At $ 199.6 million, net loss in the first quarter was much deeper than the quarter last year of $ 29.6 million. Per share, the loss was $ 1.31 compared to just 40 cents the year before. The losses weighed on investors’ minds, but company guidance was more worrying. Management predicts that paid membership will be flat year after year 2021. The stock fell 10% after the earnings release. However, Cathie Wood began buying stocks by taking advantage of the price drop to increase its holding of TDOC. Her company bought more than 716,000 shares worth over $ 122 million at the time of purchase. Teladoc is Ark’s # 2 portfolio, accounting for over 6% of the fund’s portfolio. While BTIG analyst David Larsen notes investors’ concerns, he believes the long-term outlook for the company remains positive. “The question that can weigh the share is the 2021 membership guide of DKK 52 – 54 million. (+ 2% y / y) remained unchanged, ”said Larsen. “Despite this headwind, we still like the company and the stock. The management emphasized that the ‘pipeline for membership’ has now increased by more than 50% y / y, which is higher than what was reported in 4Q: 20, and many of these offers are progressing. TDOC also won a major BCBS plan in the Northeast because of the “whole person” model, and it is a competitive take-away. We believe that management’s comments about the membership pipeline are very calculated, and we expect that the 2022 membership growth will be far better than 2021’s growth rate. In line with his comments, Larsen rates TDOC as a purchase, and his price target of $ 300 implies an upward position of 83% for the coming year. (To view Larsen’s track record, click here.) Overall, Teladoc gets a moderate buy from the analyst’s consensus, a rating of 23 reviews that includes 14 for Buy and 9 for Hold. The stock is priced at $ 163.21 and has an average price target of $ 243.68, making the one-year uptrend a robust 49%. (See Teladoc’s inventory analysis on TipRanks.) Zoom Video Communications, Inc. (ZM) Zoom up, Zoom, need no introduction. This tech-based video communications company had a low profile in 2019, but in the corona crisis of 2020, Zoom grew. The company experienced a huge expansion, in use and user base, and its stock peaked in November 2020 with a price well over $ 500 per share. Shares. Since then, it has fallen – but even after this fall, ZM shares still show a one-year gain of 121%. The fall in the share price in Zoom can best be seen as temporary volatility in a share that is otherwise healthy. Zoom was announced in April 2019 and has reported continuous revenue and earnings gains in each quarter since – with the gains accelerating last year. In the 4th quarter of fiscal year 2021, Zoom, the most recently reported, reported $ 882.5 million on the top line, an increase of 13.5% in order and a whopping 368% year-over-year. EPS last quarter was 87 cents; this can be compared to only 5 cents per. share income the year before. Zoom reported $ 377.9 million in free cash flow in Q4 21 compared to $ 26.6 million a year earlier. In customer metrics, Zoom reported equally strong growth. It had more than 467,000 customers with more than 10 employees, an increase of about 470% annually and 1,644 customers who paid more than $ 100,000 in the following 12 months, an increase of 156% year. As for Cathie Wood, she believes Zoom will continue to grow, saying, “I think it’s going to overcome a lot of the old telecommunications infrastructure.” Two of Woods Ark funds own shares in Zoom, over 2.4 million shares in total, Zoom makes up approximately 3.40% of Ark’s portfolio. 5-star analyst Daniel Bartus of Merrill Lynch also likes ZM shares and writes about the company’s model, “In our opinion, Zoom’s superior video experience has solidified its position as the go-to platform after COVID. As the pandemic gets stuck and companies adopt more flexible workforces, we believe 2021 will be another good year for Zoom. Post-pandemic, we believe Zoom remains well positioned as the new communications standard and sales of Zoom Phone, Rooms and additional features across 467,000 customer base outweigh the churn risk for smaller customers. Bartus puts a Buy rating on the stock with a price target of $ 480, indicating a potential upside of 52% for the coming year. (To see Bartus’ track record, click here.) Wall Street’s views on Zoom are a bit of a mystery. The analyst’s consensus here is a Team, based on reviews that include 6 for buy, 10 for hold and 2 for sell. On the other hand, the stock’s $ 444.40 average price target represents an upward trend of 41% over a year’s horizon. (See Zoom’s stock analysis on TipRanks.) Shopify, Inc. (SHOP) Last on our list of Woods picks, Shopify, is a Canadian based e-commerce giant that needs no introduction. Shopify has been around for 15 years and was an early leader in the delivery of e-commerce platforms to third parties. The company’s services include payment processing, marketing, shipping and customer engagement. Shopify earned $ 2.93 billion last year and has seen consecutive revenue gains in each of the last four quarters. While the stock has found 2021 more of a beat, it has still increased by 77% over the last 12 months, easily beating the S&P 500s 47% one-year gain. Starting in 2021, Shopify reported 110% growth over the previous year in the first quarter with the top line of $ 988.7 million. Company EPS in Q1, $ 9.94 per share. Share, was inflated by unrealized gains from a stock investment, which made the comparison difficult, but the company also reported 7.87 billion. Dollars in cash at the end of March, compared with 6.39 billion. Dollars in late December. The solid gains in revenue and cash holdings are supported by a growing user base. Shopify’s mobile app, Shop, now has over 107 million registered users, of which 24 million are active users each month. And the company has good word-of-mouth advertising; 45,800 of its ‘partners’ referred a co-dealer to the service in the previous 12 months, an annual gain of 73%. Looking at all of this, Cathie Wood thinks we may be able to see the start of the ‘next Amazon.’ She says, referring to the company’s position in the market and its prospects for growth, “Shopify does not care who wins. It will be involved in many, if not most, of all the sites that come to enable trading. Her Ark funds are collecting SHOP shares – they own more than 690,000 worth more than $ 754 million at the current valuation. Colin Sebastian, a 5-star analyst at Baird, agrees that Shopify is a stock to buy. He writes, “we are seeing higher expenditure levels that support the huge e-commerce market opportunity, maintain a high level of innovation in platform services and maintain a high level of scalability. As such, we would be buyers of shares on any withdrawals related to margin comments … We believe that Shopify will continue to be a key recipient of the migration towards multi-channel e-commerce, as companies exploit and integrate a wide range of consumer touches to increase sales – including traditional offline, online, store, mobile, kiosks and call centers. Sebastian’s price target here, $ 1,550, suggests a 42% increase over the next 12 months. His rating is Outperform (ie a purchase). (To see Sebastian’s track record, click here.) High-profile technology companies tend to attract a lot of attention, and Shopify has received no fewer than 30 analyst reviews in recent weeks. These are divided into 16 Buys, 13 Holds and only a single Sell, making the analyst consensus a moderate buy. The stock is priced at $ 1,092.01 and the average price target of $ 1,482.21 means they have room to win 36% this year. (See Shopify’s stock analysis at TipRanks.) To find great ideas for stocks that are trading at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is for informational purposes only. It is very important to do your own analysis before making an investment.