These 3 Cathie Wood stocks could rise 40% (or more)
The markets have been a mixture of profit and volatility lately, and it is sometimes difficult for investors to understand this. At times like these, it makes sense to turn to experts. Katie Wood is one such expert, an investor whose stocks have always outperformed the markets as a whole. A protégé of renowned economist Arthur Laffer, market guru Wood has earned a reputation for her clear vision of the markets. Her firm is Ark Invest, whose innovative ETF manages over $ 52 billion in assets, making her one of the largest institutional investors on the scene. Better yet, Wood’s stock paid off during the “year of the crown”; the total return on ETFs in 2020 was an astounding 170%. With such returns, it’s clear that Katie Wood knows what she’s talking about when she picks stocks. So we’re looking at three of her stocks of choice, all of her firm’s “top 10” assets, by portfolio percentage. Using the TipRanks platform, we found that according to some street analysts, each of them has a growth potential of at least 40% in the coming year. Let’s figure it out. Teladoc Health, Inc. (TDOC) Teladoc, the first company on our list, was one of the first companies in the telemedicine sector to make telemedicine services available for non-emergencies. Patients can use Teladoc for ear, nose and throat counseling, laboratory referrals, basic diagnoses and medical advice, and non-addictive prescription supplies. Teladoc exposes its services to remote calls to primary care physicians. Despite the clear benefits of Teladoc’s services in the year of the pandemic and steadily growing earnings, the company’s stock has lagged behind broader markets in the past 12 months. A look at the latest quarterly report – for 1Q21 – will shed some light. The company’s revenue amounted to $ 453.6 million, which is 150% more compared to the same period last year. However, the income speaks for another thing. The net loss in the first quarter was $ 199.6 million, much more than the loss for the last year’s quarter of $ 29.6 million. The loss per share was $ 1.31, up from 40 cents a year earlier. The losses were weighing on the minds of investors, but the company’s forecasts were more worrisome. Management predicts that paid membership in 2021 will remain unchanged from the same period last year. Shares fell 10% after the release of the income statement. Katie Wood, however, started buying shares, taking advantage of the fall in prices to increase her stake in TDOC. Her firm bought back more than 716,000 shares for over $ 122 million at the time of purchase. Teladoc is Ark’s second holding, accounting for over 6% of the fund’s portfolio. While BTIG analyst David Larsen notes investor concerns, he believes the company’s long-term outlook remains positive. “The problem that could put pressure on stocks is that the membership forecast for 2021 of 52-54 million (+ 2% YoY) has remained unchanged,” Larsen said. “Despite this headwind, we still love the company and its stock. Management stressed that the membership pipeline is currently up more than 50% YoY, higher than reported in 4Q20, and many of these deals are moving forward. TDOC also won the BCBS Northeast close-up for the whole-man model, and that’s a competitive takeaway. We believe management comments on the membership pipeline are very calculating and we expect membership growth in 2022 to be much better than growth in 2021. ” In line with his comments, Larsen rates TDOC as a Buy, and his $ 300 target price implies 83% upside potential for the year ahead. (To view Larsen’s track record, click here.) Overall, Teladoc receives a moderate buy based on analyst consensus, a rating based on 23 reviews, including 14 buy and 9 hold. The stock is priced at $ 163.21 and has an average target price of $ 243.68, making it a steady 49% annual upside. (See TipRanks’ Teladoc Stock Analysis.) Zoom Video Communications, Inc. (ZM) Next, Zoom needs no introduction. This high-tech video communications company was not very popular in 2019, but during the 2020 corona crisis, Zoom has come of age. The company saw a tremendous increase in usage and user base, and its stock peaked in November 2020 with a price well above $ 500 per share. It has declined since then, but even after that decline, ZM shares are still up 121% year over year. The decline in Zoom’s stock price can best be seen as temporary stock volatility that is otherwise reliable. Zoom went public in April 2019 and has since reported consistent revenue and earnings increases in each quarter, with growth accelerating in the past year. Zoom’s most recent FY2021 Q4 report revealed Zoom’s revenue was $ 882.5 million, up 13.5% from last year. Earnings per share in the most recent quarter were 87 cents; by comparison, a year earlier, EPS was only 5 cents. Zoom reported free cash flow of $ 377.9 million for Q4 21, up from $ 26.6 million a year earlier. In terms of customer metrics, Zoom reported similarly strong growth. The company had more than 467,000 customers, more than 10 employees, an increase of about 470% over the same period last year, and 1,644 customers who paid more than $ 100,000 in the last 12 months, which is 156% more than a year earlier. … As for Katie Wood, she thinks Zoom will continue to grow, stating, “I think this will usurp a lot of the old telecom infrastructure.” Two Wood’s Ark funds hold over 2.4 million shares in Zoom, Zoom represents approximately 3.40% of the Ark portfolio. 5-star analyst Daniel Bartus of Merrill Lynch also loves ZM stock and writes of the company’s model: “In our view, Zoom’s superior video quality has solidified its position as a post-COVID meeting platform. As the pandemic drags on and businesses move to more flexible workforces, we believe 2021 will be another good year for Zoom. We believe that Zoom is still well positioned following the pandemic as the new communications standard and increased sales of Zoom Phone numbers and additional features for 467,000 customers offset the risk of small customer churn. ” Bartus recommends buying the stock with a target price of $ 480, which implies 52% upside next year. (To view Bartus’s track record, click here.) Wall Street’s views on Zoom are somewhat of a mystery. The analyst consensus here is Hold, based on reviews that include 6 to buy, 10 to hold, and 2 to sell. On the other hand, the target average share price of $ 444.40 implies 41% upside over the one-year horizon. (See TipRanks’ Zoom Stock Analysis.) Shopify, Inc. (SHOP) Last on our pick list, Wood, Shopify, is a Canadian e-commerce giant that needs no introduction. Shopify has been around for 15 years and was one of the earliest leaders in providing ecommerce platforms to third parties. The company’s services include payment processing, marketing, shipping and customer relations. Shopify grossed $ 2.93 billion last year and has grown consistently in each of the past four quarters. Even though the company’s stock turned out to be challenging in 2021, it is still up 77% in the past 12 months, easily surpassing the S&P 500’s 47% year-over-year gain. Beginning in 2021, Shopify reported 110% year over year revenue growth in the first quarter, with revenue reaching $ 988.7 million. The company’s first-quarter net earnings per share were $ 9.94 per share, making comparison difficult and difficult to compare, but the company also reported $ 7.87 billion in cash at the end of March, up from $ 6.39 billion at the end of December. … … Strong growth in income and cash is supported by a growing user base. The Shopify Shop mobile app currently has over 107 million registered users, of which 24 million are monthly active users. Moreover, the company has good word of mouth; Over the previous 12 months, 45,800 of his “partners” were sent to the service department of another seller, which is 73% more than a year earlier. Looking at all of this, Katie Wood thinks we can see the beginning of “the next Amazon.” Speaking of the company’s market position and growth prospects, she says, “Shopify doesn’t care who wins. It will be used on many, if not most, sites that will drive commerce. ” Its Ark funds take over SHOP shares – they own more than 690 thousand, which is currently estimated at more than $ 754 million. Colin Sebastian, 5-star analyst at Baird, agrees Shopify is a stock worth buying. He writes: “We view higher levels of spending as supporting the huge potential of the e-commerce market, maintaining a high level of innovation in platform services, and maintaining a high level of scalability. As such, we will be stock buyers on any pullbacks related to margin comments … We believe Shopify will continue to be the main beneficiary of the move to multi-channel e-commerce as companies leverage and integrate a wide range of consumer contacts. points to increase sales, including traditional offline, online, shops, mobile devices, kiosks and call centers. ” Sebastian’s target price here, $ 1,550, suggests 42% upside over the next 12 months. Its rating is better than the market (ie “Buy”). (To view Sebastian’s track record, click here.) High-end tech companies tend to get a lot of attention, and Shopify has amassed at least 30 analytics reviews in recent weeks. They break down into 16 buys, 13 holds, and only one sell, making the analyst consensus a moderate buy. The stock is priced at $ 1,092.01 and an average target price of $ 1,482.21 suggests it has a 36% chance this year. (See Shopify Stock Analysis on TipRanks.) To find good ideas for trading stocks at attractive valuation, visit TipRanks’ Best Stocks to Buy, a recently launched tool that brings together all TipRanks equity analytics. Disclaimer: The opinions expressed in this article are solely those of the analysts mentioned. The content is for informational purposes only. Before making any investment, it is very important to do your own analysis.