It’s tough to follow anyone’s lead in investing in the stock market these days. Many top stock pickers, including Cathie Wood of ARK Invest, have had a terrible year in the equity markets. Cathie Wood focuses on higher-risk high-return growth stocks. These stocks did very well during the post-pandemic boom through 2021. However, this year, many of these companies have fallen out of favor with investors.
That said, this environment also provides an opportunity for investors to pick up plenty of cheap Cathie Wood stocks at a hefty discount right now.
A strong track record in the past does not guarantee future success, especially in today’s unpredictable stock market. However, it’s always a great idea to keep tabs on what the biggest names in investing are doing, especially trailblazers such as Cathie Wood.
She’s had an incredible track record of picking stocks that have proven to be wealth compounders. Though the current market situation is challenging for everyone, following maverick stock pickers such as Wood is probably the right call. Moreover, most of the stocks in her portfolio have shed a ton of value, which significantly adds to their attractiveness in terms of risk-reward right now.
| SHOP | Shopify | $27.21 |
| XMTR | Xometry | $59.01 |
| EXAS | Exact Sciences | $33.82 |
Shopify (SHOP)
As far as Cathie Wood stocks are concerned, Canadian e-commerce platform Shopify (NYSE:SHOP) is one of the first companies that comes to mind. This is because SHOP stock is one of the top holdings in Wood’s ARK Fintech Innovation ETF (NYSEARCA:ARKF).
Shopify has shed a ton of value since the beginning of the year, and currently trades at multi-year lows. The company’s top-line growth rate has normalized for the business in the post-pandemic world as consumers have pivoted toward normal spending patterns. Moreover, operating cash flows and profitability have taken a major hit in recent quarters.
At this point, though, it seems like the market is overreacting to a temporary slump. Shopify is likely to experience financial pain ahead as consumers continue to adapt their spending patterns away from the e-commerce space. Nevertheless, Shopify provides a robust platform that should facilitate multichannel commerce for several years to come.
Despite what could be a few challenging upcoming quarters, I think investors who can withstand this near-term volatility should consider holding SHOP stock for the long haul.
Xometry (XMTR)
Xometry (NASDAQ:XMTR) is an online platform that facilitates the sourcing of on-demand product manufacturing needs. This company is also the largest holding of ARK’s Printing ETF (BATS:PRNT).
Xometry’s management team states that the company is the largest in its sector in terms of sales, and has effectively connected more than 5,000 unique manufacturer sellers with over 43,000 unique buyers. Consequently, the company’s performance is what many growth investors like, with Xometry posting double-digit growth on its top line in recent years.
Overall, Xometry’s recently-released financial results paint a very nice picture for long-term investors. The company’s sales rose 89% over the prior year, driven by accelerating growth in marketplace and supplier services. Moreover, the company also reported robust gross margins driven by AI-based pricing and supplier selection along with additional supplier services. Its gross profit was up over 200% on a year-over-year basis, with a 40% bump in active buyers.
Moving forward, a research report published by Grand View Research showed that the “smart manufacturing” market could grow at an amazing 13.4% CAGR from 2022 to 2030, which points to a massive growth runway for XMTR stock.
Exact Sciences (EXAS)
Exact Sciences (NASDAQ:EXAS) is one of the top biotech holdings in the ARK Genomic Revolution ETF (BATS:ARKG). This company focuses on producing products that detect early-stage colorectal cancer. So far, Exact’s products have proven extremely important for healthcare providers and patients, with its top product being its test for colorectal cancer, called Cologuard.
Regular screenings are recommended for people aged 45 and above, but according to the firm, 46 million people in the U.S. remain unscreened. Hence, the company’s management team sees a massive $18 billion opportunity in this market. Moreover, the company is also working on the development of a multi-cancer early-detection test. Exact Sciences sees another $25 billion opportunity in the niche. If Exact is able to capture only a fraction of its overall addressable market, it should help significantly grow its revenue base over the long-term.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.