These 3 stocks of Cathie Wood are said to rip 40% (or more) higher.
Markets lately have been a mix of earnings and volatility and sometimes it is difficult for investors to make sense of it. At times like these, it makes sense to turn to the experts. Cathie Wood is one such expert, an investor whose stock picks have consistently outperformed overall markets. Market guru Wood, a protégé of famed economist Arthur Laffer, built her reputation on her clear view of the markets. Their company is Ark Invest, whose innovation ETF has assets under management of over $ 52 billion, making them one of the largest institutional investors on the scene. Better still, Wood’s stock pick paid off during the “corona year”. The ETF’s total return in 2020 was a staggering 170%. With returns like this, it’s clear that Cathie Wood knows what she’s talking about when she picks a stock. So let’s take a look at three of their stock picks, all of which are from their company’s “top 10” holdings by percentage weight within the portfolio. Using the TipRanks platform, we’ve found that, according to some street analysts, everyone has at least 40% upside potential for the year ahead. Let’s get the overview. Teladoc Health, Inc. (TDOC) The first stock on our list, Teladoc, was an early adopter of telemedicine, providing remote medical care for non-urgent issues. Patients can use Teladoc to provide advice on ear, nose and throat questions, laboratory referrals, basic diagnosis and medical advice, and prescription refills for non-addictive substances. Teladoc offers its service as a home visit from general practitioners. Despite the obvious benefits of Teladoc’s service during the pandemic year and its steadily increasing sales, the company’s stock has lagged broader markets over the past 12 months. A look at the latest quarterly report – for the first quarter of 21 – will shed some light. The company reported sales of $ 453.6 million, an impressive 150% year-over-year increase. However, the result told a different story. At $ 199.6 million, the net loss for the first quarter was much lower than the loss of $ 29.6 million for the year-ago quarter. The loss per share was $ 1.31 compared to just 40 cents a year ago. The losses weighed on investors, but the company’s guidelines were more worrying. Management predicts that paid membership will remain unchanged in 2021. The stock fell 10% after the earnings release. However, Cathie Wood began buying stocks and took advantage of the fall in prices to increase her holdings in TDOC. Her company purchased more than 716,000 shares valued at over $ 122 million at the time of purchase. Teladoc is Ark’s number 2 and accounts for over 6% of the fund’s portfolio. While BTIG analyst David Larsen takes note of investor concerns, he believes the long-term outlook for the company remains positive. “The problem that could weigh on the stock is that the membership forecast for 2021 was unchanged from 52 to 54 million (+ 2% yoy),” said Larsen. “Despite this headwind, we still like the company and the stock. Management emphasized that the “Membership Pipeline” has increased more than 50% year over year, higher than what is reported in 4Q: 20, and many of these deals are moving forward. TDOC also won a major BCBS plan in the Northeast because of the “whole person” model, and this is a competitive take-away. We believe management’s comments on the membership pipeline are very calculated and we would expect membership growth in 2022 to be far better than the growth rate in 2021. ”Consistent with his comments, Larsen rates TDOC as a buy, and its target price of $ 300 implies an 83% uptrend for the coming year. (To see Larsen’s track record, click here.) Overall, Teladoc received a moderate buy from analyst consensus, a rating derived from 23 ratings, including 14 to buy and 9 to hold. The shares have a price of $ 163.21 and an average target price of $ 243.68, which is a one-year uptrend of a robust 49%. (See Teladoc’s stock analysis at TipRanks.) Zoom Video Communications, Inc. (ZM) Next, there’s no need to introduce Zoom. This technology-based video communications company had a low profile in 2019, but Zoom came of age in the 2020 corona crisis. The company has seen tremendous expansion in terms of usage and user base, peaking in November 2020 at well over $ 500 per share. It has declined since then – but even after that decline, ZM shares are still showing a year-long gain of 121%. The decline in price on Zoom can best be viewed as the temporary volatility of a stock that is otherwise solid. Zoom went public in April 2019 and has seen sequential sales and earnings gains each quarter since then – with gains accelerating over the past year. For the fourth quarter of fiscal 2021, most recently reported, Zoom reported $ 882.5 million in its top spot, up 13.5% from the previous quarter and a whopping 368% year over year. The EPS was 87 cents in the last quarter; This corresponds to only 5 cents per share in the previous year. Zoom reported free cash flow of $ 377.9 million for the fourth quarter of 21 compared to $ 26.6 million a year earlier. Zoom also saw strong growth in customer metrics. The company had more than 467,000 customers with 10+ employees, up approximately 470% year over year, and 1,644 customers who paid more than $ 100,000 in the last 12 months, up 156% year over year. Believing Zoom will continue to grow, Cathie Wood says, “I think it will take over much of the old telecommunications infrastructure.” Two of Woods Ark funds own Zoom stocks, totaling over 2.4 million stocks. Zoom makes up around 3.40% of the Ark portfolio. Merrill Lynch’s 5-star analyst Daniel Bartus also likes ZM shares and writes about the company model: “In our view, Zoom’s superior video experience has cemented its position as a post-COVID meeting platform. As the pandemic continues and companies employ a more flexible workforce, we believe 2021 will be another good year for Zoom. After the pandemic, we believe that Zoom remains well positioned as the new communication standard. The upsell of Zoom Phone, Rooms and additional functions in the 467,000 customer base offsets the risk of churn among smaller customers. “Bartus gives the share a buy rating. A target price of $ 480 indicates a potential increase of 52% for the coming year. (To see Bartus’ track record, click here.) Wall Street views of Zoom offer a bit of a mystery. The analyst consensus here is a hold based on ratings that include 6 to buy, 10 to hold and 2 to sell. On the other hand, the stock’s average target price of $ 444.40 implies an upward trend of 41% over the one-year horizon. (See Zoom’s stock analysis at TipRanks.) Shopify, Inc. (SHOP) Shopify is a Canada-based ecommerce giant that doesn’t need to be introduced. Shopify has been around for 15 years and was an early leader in delivering ecommerce platforms to third parties. The company’s services include payment processing, marketing, shipping and customer loyalty. Shopify had revenue of $ 2.93 billion last year and had sequential revenue growth for the last four quarters. While the stock has found more of a slog in 2021, it’s still up 77% over the past 12 months, well outperforming the S&P 500’s 47% one-year profit. As of 2021, Shopify saw revenue grow 110% year over year in the first quarter, with revenue hitting $ 988.7 million. The company’s earnings per share for the first quarter of $ 9.94 per share were increased by unrealized gains on an equity interest, making comparison difficult. However, in late March, the company also reported cash holdings of $ 7.87 billion, compared to $ 6.39 billion in late December. The solid increases 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 monthly active users. And the company does good word of mouth; 45,800 of his “partners” referred another trader to the service in the last 12 months, an increase of 73% over the previous year. With all of this, Cathie Wood believes that we may see the beginning of the “next Amazon”. She points to the company’s position in the market and its growth prospects: “Shopify doesn’t care who wins. It will deal with many, if not most, of the websites that will be driving the trade. “Your Ark funds are gobbling up SHOP stocks – they own over 690,000, which is valued at over $ 754 million at the current valuation. Colin Sebastian, 5-star analyst at Baird, agrees Shopify is a stock to buy. He writes, “We see higher spending as supporting the huge e-commerce market opportunity, maintaining a high level of innovation in platform services, and maintaining a high level of scalability. As such, we would be buyers of stocks on withdrawals related to margin comments. We believe that Shopify will continue to be a major beneficiary of the migration to multi-channel e-commerce as companies leverage and integrate a wide range of customer contact. Points to increase sales – including traditional offline, online, in-store, mobile, kiosk and call centers. “Sebastian’s target price here, $ 1,550, indicates an upward movement of 42% over the next 12 months. Its valuation is outperform (i.e. a buy). (To see Sebastian’s track record, click here.) High-profile tech companies often draw a lot of attention, and Shopify has received no fewer than 30 analyst reviews in the past few weeks. These are broken down into 16 buys, 13 holds, and just a single sell, making the analyst consensus a moderate buy. The stock price is $ 1,092.01, and the average target price of $ 1,482.21 implies they have room to gain 36% this year. (See Shopify’s Stock Analysis at TipRanks.) To find great ideas for trading stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts featured. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.