As investors continue grappling with a volatile stock market, five stocks in Catherine Wood (Trades, Portfolio)’s first-quarter 13F equity portfolio that have high GF Scores and have outperformed the Standard & Poor’s 500 Index year to date are Vertex Pharmaceuticals Inc. (VRTX, Financial), Rada Electronics Industries Ltd. (RADA, Financial), Check Point Software Technologies Ltd. (CHKP, Financial), Incyte Corp. (INCY, Financial) and SolarEdge Technologies Inc. (SEDG, Financial) according to the All-in-One Screener, a Premium feature of GuruFocus.
Dow tumbles despite opening higher as consumer confidence wanes
On Tuesday, the Dow Jones Industrial Average closed at 30,947.99, down 491.27 points from the previous close of 31,438.26 despite hitting an intraday high of 31,885.09 around market open.
Stocks erased early gains on the back of The Conference Board reporting the consumer confidence index declined in June to a reading of 98.7, down from the May reading of 103.2 and missing the Dow Jones estimate of 100. The board also reported that 12-month inflation expectations stood at 8%, its highest level since August 1987.
The ARK Investment CEO said in a CNBC “Squawk Box” interview Tuesday morning that the market is already in a recession, citing a major problem that investors have right now is inflation has been hotter than expected. Wood further said she was wrong about inflation remaining sustainable as it has been: The May consumer price index reading saw inflation increase 8.1% from a year ago, the highest rate since December 1981. The investor further added that consumer sentiment based on the University of Michigan’s consumer survey tumbled to just 50 in June, its lowest level ever.
According to the Aggregated Statistics Chart, a Premium feature of GuruFocus, the mean day’s change for the Standard & Poor’s 500 index stocks is -1.25% with a median of -1.28%.
ARK Investment’s equity portfolio still contains a few stocks outperforming the benchmark
Wood’s St. Petersburg, Florida-based firm applies an iterative investment process that combines top-down and bottom-up research as well as disruptive innovation centered around robotics and artificial intelligence.
Despite the market downturn, ARK Investment’s first-quarter 13F equity portfolio still contains several stocks outperforming the benchmark and have a high stock rank based on the GF Score. GuruFocus’ exclusive grading method, which has found to be closely correlated to stock performance based on backtesting from 2006 to 2021, considers five key aspects: financial strength, profitability, growth, GF Value and momentum. Each individual rank ranges from 0 to 10, with 10 as the highest score. Likewise, the entire score ranges from 0 to 100, with 100 as the highest score.
As of March, ARK Invest’s $23.95 billion equity portfolio contains 352 stocks with a quarterly turnover ratio of 13%. The top three sectors in terms of weight are health care, technology and communication services, representing 35.25%, 32.71% and 14.64% of the equity portfolio.
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Vertex Pharmaceuticals
ARK Investment owns 421,775 shares of Vertex Pharmaceuticals (VRTX, Financial), giving the position 0.46% equity portfolio weight.
Shares of Vertex Pharmaceuticals traded around $276.17, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.84. The stock outperformed the S&P 500 benchmark by 47.20% over the past six months.
The Boston-based biotech company has a GF Score of 87 out of 100 based on a growth rank of 10 out of 10, a financial strength rank of 9 out of 10 and a rank of 7 out of 10 for profitability and GF Value despite momentum ranking just 3 out of 10.
Other gurus with holdings in Vertex Pharmaceuticals include the Vanguard Health Care Fund (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Rada Electronics Industries
ARK Investment owns 264,082 shares of Rada Electronics Industries (RADA, Financial), giving the position 0.02% equity portfolio weight.
Shares of Rada Electronics Industries traded around $10.04, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.81. The stock outperformed the S&P 500 benchmark by approximately 28.34% over the past six months.
The Israeli defense electronics company has a GF Score of 83 out of 100 based on a financial strength rank of 9 out of 10, a growth rank of 8 out of 10, a GF Value rank of 7 out of 10, a momentum rank of 6 out of 10 and a profitability rank of 5 out of 10.
Check Point Software
The firm owns 20,647 shares of Check Point Software (CHKP, Financial), giving the position 0.02% equity portfolio weight.
Shares of Check Point Software traded around $121.70, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.85. The stock outperformed the S&P 500 benchmark by approximately 24.56% over the past six months.
The Israeli cybersecurity software company has a GF Score of 97 out of 100, driven by a rank of 10 out of 10 for profitability, growth and financial strength despite momentum and GF Value ranking between 6 and 7 out of 10.
Incyte
The firm owns 1,261,683 shares of Incyte (INCY, Financial), giving the position 0.42% equity portfolio weight.
Shares of Incyte traded around $75.63, showing the stock is significantly undervalued based on Tuesday’s price-to-GF Value ratio of 0.68. The stock outperformed the S&P 500 benchmark by approximately 22.54% over the past six months.
The Wilmington, Delaware-based drug manufacturer has a GF Score of 84 out of 100 based on a rank of 10 out of 10 for momentum and GF Value and a financial strength rank of 9 out of 10 despite profitability and growth ranking just 6 out of 10.
SolarEdge Technologies
ARK Investment owns 11,420 shares of SolarEdge Technologies (SEDG, Financial), giving the position 0.02% equity portfolio weight.
Shares of SolarEdge traded around $279.24, showing the stock is modestly undervalued based on Tuesday’s price-to-GF Value ratio of 0.88.
The Israeli solar technology company has a GF Score of 92 out of 100 based on a momentum rank of 10 out of 10, a growth rank of 9 out of 10, a GF Value rank of 6 out of 10 and a rank of 8 out of 10 for financial strength and profitability.
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