A Deep Look Into Cathie Wood-s Portfolio (Ark Invest)

Speaker 1: Kathy was you’d have to say she is one of the best investors of the modern era and what I mean by this? Well, the 21st century, it’s really been the decade of technology, the rise of computers, social media, electric cars, artificial intelligence, et cetera. Cathy is an investment manager who focuses on these areas, these pockets of high growth. And she’s done a pretty good job of picking the specific companies and those sectors who have gotten the highest returns.

So what we’re going to do in this video is we’re going to go over her portfolio and buy her portfolio. I mean, the portfolio that she manages with her investment fund invest, which is one point six billion dollars of assets under management. These are the top 10 stocks that she owns. This has rarely been the stock that has made Cathy Woods, the Salmiya famous investor that she is today. The fact that she invested in Tesla early on and it’s still her number one position currently, if we look at our investor portfolio, they are in four hundred two thousand two hundred ninety three Tesla shares with a market value of five hundred seventeen million dollars, making up nine point six three percent of the total portfolio. And Tesla, it’s been one of those stocks that has made any of its early investors a lot of money. If you had invested in Tesla just 10 years ago, you would have made in over 7000 per cent return five years ago and over 500 percent return three years ago, about a 350 percent return. And for those who don’t know, which I’m sure most of you already do, Tesla is the electric car and energy company. The head of the company is probably one of the greatest geniuses of our time, Elon Musk. So Tesla’s goal is to accelerate the world’s transition to sustainable energy. They’re obviously doing this through one selling electric vehicles, which, by the way, they’re not doing a bad job at the Tesla model three was the world’s most popular plug in electric vehicle, with worldwide unit sales of more than 300000 in 2019. And they’re currently ranked then number one, not just electric vehicle company, but vehicle company in the world. Then they’ve also got their energy side of their business, which is looking to power homes sustainably and to develop strong, long lasting batteries. The interesting thing about the energy part of their business is it’s bigger than a lot of people think.

In fact, Elon Musk said that I think long term Tesla energy will be roughly the same size as Tesla Automotive. Essentially, what Tesla stock? You have got a world that is looking to become more sustainable. And Tesla is probably the biggest company that is driving this change, as well as making a lot of money from its. Moving on to Kathy World’s second largest position, it’s a company called Square Square makes up seven point seventy three percent of the portfolio. They own three point three million shares with a total market value of four hundred fifty six million dollars. So square stock, this is one that you might not have heard of before. The Company Square is a business that mainly focuses on helping small businesses. They help small businesses accept credit card payments, track sales and inventory, obtain financing and do payroll and a range of other financial operations. So as of today, more than 64 million businesses use Square for the credit card payment and sales tracking technology. Kathy Wood has some interesting opinions on Square the stock. She said share gains absolutely have taken place and all kinds of innovation. We have learned the hard way that credit cards and debit cards are the most vicious Boris spreaders out there. They’re worse than cash. The move towards digital wallets has taken off and this will be very disruptive for banks, she said. And I quote, square and cars, network effects, banks to attract a customer have been willing to pay hundreds of dollars. Square spends about twenty dollars. These new services providing peer to peer transactions, small business and consumer loans. The Reason Square especially can do this is that it sees every single transaction these small businesses have. Looking at the numbers, the stock has quite a growth story to it’s only in 2016 the stock was selling for ten dollars a share. Today it’s gone up by twelve times in price, selling for just over 120 dollars. What is the largest position is an interesting one. It’s a company by the name of inviter and what they’re focused on is genetic testing. Their mission is a simple one to make genetic information affordable and accessible to everyone who can benefit from it. And I just want to break this down quickly for you. Imagine you take a genetic test, you get the results from this test and it tells you you’ve got high risk of getting skin cancer. You then know, to avoid getting burned by the sun because that’s dangerous for you. OK, so that’s one example of how this company can benefit people. Let’s just say the results tell you the type of food your genetics work best with or what’s going to help you have a good pregnancy. This is essentially what this company is looking to do, which is high potential growth and invest. They own 450 million dollars worth of the stock, which comes in at seven point six percent of their portfolio. The ticker symbol for the stock is NBT. A, if you would like to research it more price wise, it’s currently selling for around 30 dollars per share in the market cap is around three point seven billion. As you can see, they’re currently losing money because they’re using it to invest in their research. So this company definitely holds some risk to its. So you should start noticing by now the pattern with every one of these companies invested in by Woods, and that is they are all in revolutionary high growth fields, CRISPR therapeutics is no difference. They use the technology CRISPR, the gene editing platform, to treat serious human diseases, the likes of cancer, diabetes, diseases. Along those lines, Kathy Woods, she’s gone big with her position in this company with AHC Invest. They have a position valued at three hundred seventy five million dollars, making up six point four percent of the portfolio. And it just shows you how big the portfolio is when you have a position worth three hundred seventy million dollars and it makes up less than 10 percent of your entire portfolio. Well, it’s interesting.

But let’s get on to number five, though. Coming in at the fifth largest possession of the portfolio as a company called Roku can best own two point three million shares, and the company, which gives a total value of three hundred sixty six million dollars, occupies a five point nine per cent of the total portfolio. Now, I’m sure a lot of you will already own a Roku device. You’ll know what it does. Basically, it allows you to stream all of your entertainment directly to your TV. You don’t need any cable equipment or anything like that. You know, essentially, it’s the same as with all of these other companies. They’ve got a better product than the old one. It’s disruptive. It’s looking to take over a big industry, the TV industry. And of course, it’s got high potential with regards to money. Again, Roku is another growth story when it comes to price. And they made their debut to the public market on September 28, 2017, for price of twenty six point fifty. Today, they’re selling for almost a hundred and fifty dollars. Will they keep growing? Well, no one knows for sure, but Cathy seems to think so. That’s why she still owns it. You know, I’ve been wondering for quite some time now when this transition would occur, where education move towards learning through technology, on line to you is one of those companies that are bringing universities to the digital age. They have 70 university partners now. They have 70 plus degree programs as well. And Kathy is investing big in them. Are can best have 272 million dollars worth of the stock, making up four point four percent of the total portfolio. Now, this stock, unlike a lot of Woods, is other stocks, has actually had a poor run. And as you can see, about halfway through 2018, it just started going down, peaked around ninety eight dollars per share, and then it went as low as fourteen dollars. And it just shows you that, yes, a lot of these companies have high potential to gain, but they’re also risky. Proto Labs, another interesting investment by Cathy Woods, essentially what this company does is it uses 3D printing to rapidly manufacture production parts. If we look at the numbers, it’s an interesting one, the selling for around 140 dollars per share with a market cap of around three point seven billion. And the PE ratio is high at 60 because they’re a company projected for high growth. Lending tree, it’s a pretty basic but smart concept, they use the Internet to help people borrow money, so they connect the borrowers with the multiple lenders to see who can give the lowest rates. Kathy words she’s got about three point seven percent of her investment fund and lending tree with a total value of two hundred twenty seven million dollars. Also, as we mentioned before, Proto Labs, the previous stock accounts for four percent of the portfolio, but the total value of 249 million. So I’m sure by now you guys are getting a very good feel for Woods’s investing strategy, the strategy that her fund and invest go by is investing in companies that have, quote, disruptive innovation.

They define disruptive innovation as the introduction of a technologically enabled new product or service that potentially changes the way the world works. And that’s what you kind of see with all of these companies. It’s the same with Cathy Woods ninth largest position, Lumina, what they do as they develop and manufacture life science tools to analyze gene variation and function. Essentially, the goal with this company is to enable personalized medicine. Oh, you have this type of gene variation, then this type of medicine will work best for you and help you recover quicker. It’s a very innovative and smart company. The price of the stock is currently just under four hundred dollars per share. But just a couple of years ago it was only hundred and thirty dollars. The stock makes up three point sixty five percent of the total portfolio. OK, the 10th largest stock and Kathy was lost, Zello, Zello, anyone who’s into real estate and lives in the US will most likely have heard of this SÓLO. They are the online real estate database company. So essentially you go on their website, you look to buy a house and it’s going to give you a whole lot of information on it. Zillow make their money through ads. They make their money through a partnership with Yahoo! And to this day they are the leading real estate market place. This is Arcam best tenth largest stock, which makes up three point four percent of the portfolio. The total value of that position is two hundred eleven point six million dollars. So that is the ten largest and most important positions over Iraq and best portfolio, which is run and managed by Kathy Wood. Now, I do want to leave some closing remarks on the way Kathy Woods invests and her portfolio structure. As you can see, she likes those companies that are looking to make a big difference and disruption in the world, the likes of Tesla Square crisper. All of these are disruptive companies. What this means is that her portfolio has strong potential for high returns. For example, over just the past year, they’ve have made a 49 percent return. That’s nothing to sneeze at. However, this does mean they carry higher risks. Let’s say the stock market enters a bear market. It’s going to be these high growth technology stocks that will be the ones who suffer. So, you know, there’s definite potential for loss with this technology and innovation based portfolio. Nevertheless, Kathy Wood has proven since that she is no dummy when it comes to investing.

And these stock picks have helped her beat the market with a twenty six point seven percent annualized return since her fund’s inception. This is something a lot of portfolio managers cannot say. And so you have to give Kathy Wood props on being a quality investor.

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