Shares of the electric vehicle firm have defied gravity, just as how its CEO has defied security and safety regulators. And one in particular is still warning of more potential drawdowns. Yet, not every Cathie Wood stock is signaling that the depths of investor despair have passed. 1 Cathie Wood Stock Warning About More Losses to Come In other words, the early warning stocks of Cathie Wood’s ARK Invest are now suggesting the road to recover has finally begun. Over the past decade, investors buying shares in the quintile of top-performing stocks from the past-three months can outperform by a small margin. The Profit & Protection system finds that momentum effects start to take hold around the three-month mark (and peaks at the 12-month one). And Zoom was an early beneficiary of the work-from-home movement that fell after the initial rush subsided.Īnd in each of these cases, shares of early peaking stocks have stopped falling for at least three months. DraftKings is one of Cathie Wood’s few consumer discretionary stocks – a sector that typically outperforms in early stage recessions, according to research from Fidelity Investments. These stocks represent early peaking companies. 2 holding peaked over a year before the Nasdaq did. The 70% recovery of this consumer discretionary stock points to a a greater willingness by investors to take leaps of faith. The online sports betting platform peaked in March 2021, nine months before the Nasdaq top. Two other Cathie Wood stocks are also pointing to a return of better times. The company now scores an A+ for its Profit & Protection momentum score.
Even Ginkgo Bioworks - a moonshot bet that loses $3.50 for every dollar generated – has rebounded into the mid-$3 range. Since I recommended the stocks, shares of CRISPR have stabilized in the $70-$80 range, while Beam has risen 33%. Today, these stocks are telling a new story. It’s one of the closest thing that equity investors have to a crystal ball. And all three bottomed out in May, a month earlier than the Nasdaq index’s trough. That’s because these companies are some of the earliest-warning signals in the ARK Invest portfolio – shares of BEAM peaked in July 2021, around five months before the Nasdaq hit its all-time high. To borrow a term from the fixed income world, these Cathie Wood picks are “long duration” stocks.įor equity investors, these long-duration stocks matter.
Because profits of these biotech firms are many years into the future, analysts must “discount” those earnings a longer way back to the present. These top Cathie Wood holdings - along with Ginkgo Bioworks (NYSE: DNA) - are the stock market’s canaries in the coalmine. Shares of CRISPR and Beam had both fallen two-thirds from their peak. Fed Chairman Jerome Powell had just raised rates by 75 basis points the month before, and the age of easy money seemed to be long gone. When I recommended shares of CRISPR Therapeutics (NASDAQ: CRSP) and Beam Therapeutics (NASDAQ: BEAM) in July, biotech’s future seemed dim at best. To make sure you don’t miss any of Tom’s picks, subscribe to his mailing list here. This article is excerpted from Tom Yeung’s Profit & Protection newsletter dated Aug.
0 kommentar(er)
