Longtime bull Cathie Wood is warning investors of the ‘big problem’ in today’s economy. Here are 3 stocks she likes right now

'We're in a recession': Longtime bull Cathie Wood is warning investors of the 'big problem' in today's economy.  Here are 3 stocks she likes right now

‘We’re in a recession’: Longtime bull Cathie Wood is warning investors of the ‘big problem’ in today’s economy. Here are 3 stocks she likes right now

Official GDP estimates for Q2 won’t be available until later this month, but many experts – including Ark Invest’s Cathie Wood – are calling for a recession.

“We think we are in a recession,” Wood said in a recent CNBC interview. “We think a big problem there is inventory – an increase I have never seen this large in my career. I’ve been there for about 45 years. “

Based on how the market is working, sentiment is definitely falling. To date, the S&P 500 is down 19% year-over-year. Wood’s Ark Innovation ETF (ARKK) has fallen more than 50% in the same period.

But investors don’t give up. CNBC notes Fact Set data shows that ARKK received more than $180 million in June.

“I think the cash flow is happening because our clients have diversified away from broad-based benchmarks like the Nasdaq 100. We are completely dedicated to disruptive innovation,” says Wood. Innovation solves problems. “

For those who share Wood’s vision, here’s a look at the top three holdings in ARKK.

Do not miss

Zoom Video Communications (ZM)

As meetings and classes moved online due to the pandemic, Zoom’s business flourished.

But as the economy reopened and employees began returning to the office, there were concerns about the video media company’s growth potential.

So far, Zoom stock is down 35%.

But Wood continues to see opportunity in stocks. In fact, Zoom is currently the largest holding in ARKK, accounting for 10% of the fund’s weight.

Last month, Ark Invest released a research report showing how Zoom stock could see a glorious resurgence in the not-too-distant future.

Wood’s team writes: “According to ARK’s research and open-source modeling, Zoom’s stock price could reach $1,500, with a 76% compound annual growth rate.”

Since Zoom stock trades at $119 a piece right now, that price target implies a potential upside of more than 1,100%.

Tesla (TSLA)

Tesla has long been an important factor for growth investors. But now, it’s also a name worth considering for contrarian investors – given how much the stock has fallen in price.

Since hitting a closing high of $1,229.91 on November 4, the stock has dropped a staggering 41%.

But the business is still moving in the right direction. In Q1, Model S, Model X, Model 3 and Model Y deliveries totaled 310,048 vehicles, up 68% year-over-year.

Ark Invest also sees an upcoming game-changing product from the company: robotaxi.

Ark analyst Tasha Keeney wrote in an April report: “Tesla’s potential robotaxi business is a key driver, contributing 60% of expected value and more than half of expected EBITDA by year 2026”.

In that report, Ark projected Tesla’s stock price of $4,600 by 2026. That represents a potential increase of more than 530% from today’s stock price.

So it’s no surprise that Tesla is the second largest shareholder in ARKK with an 8.2% share.

Roku (ROKU)

The secular trend of video-on-demand streaming has produced a number of winners in the tech space.

Roku is one of them. Since going public in September 2017, this stock has rebounded more than 200%.

The company’s platform gives users access to streaming services like Youtube, Netflix, and Disney+. Roku also offers its own ad-supported channels with licensed third-party content.

The company added 1.1 million active accounts in Q1, bringing the total number of active accounts to 61.3 million. Revenue increased 28% year over year to $734 million.

Although Roku’s business is growing, the investors has been favored in fast fashion. The stock has dropped a staggering 78% over the past 12 months.

But Ark Invest didn’t give up on Roku. In fact, Roku is still the third largest holding in ARKK, accounting for 8.1% of the fund’s weight.

What to read next?

  • Register for our MoneyWise newsletter for steady flow action ideas from top Wall Street firms.

  • US is just days away from ‘absolute boom’ in inflation – here it is 3 impact resistant zones to help protect your portfolio

  • ‘There’s always a bull market somewhere’: Jim Cramer’s famous quote shows that you can make money at any cost. This is 2 powerful wind coils to take advantage of today

This article is for information only and should not be construed as advice. It is provided without warranty of any kind.

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