ARK Investment Management, the firm founded by Catherine Wood (Trades, Portfolio), disclosed in a regulatory filing that its top five trades during the second quarter included boosts to its holdings in Roku Inc. (ROKU, Financial) and Coinbase Global Inc. (COIN, Financial) and reductions to its positions in Shopify Inc. (SHOP, Financial), Spotify Technology SA (SPOT, Financial) and Sea Ltd. (SE, Financial).
Dow tumbles as CPI surges more than 9% in June
On Wednesday, the Dow Jones Industrial Average closed at 30,771.54, down 209.79 points from Tuesday’s close of 30,981.33 despite tumbling more than 466.72 points at the intraday low.
Stocks tumbled as the consumer price index surged 9.1% in June, the highest increase since 1981 and faster than the May growth of 8.6%. For June, Dow Jones economists expected growth of just 8.8%.
Wood said in a June CNBC interview that she was wrong about inflation remaining sustainable as it has been.
Portfolio update
The St. Petersburg, Florida-based firm applies disruptive innovation to its iterative investment process. ARK Invest selects investments using both top-down and bottom-up research while focusing on sectors that benefit from technological innovations like DNA sequencing, robotics and artificial intelligence.
As of June, ARK Invest’s $16.91 billion 13F equity portfolio contains 351 stocks, with four new positions and a quarterly turnover ratio of 8%. The top four sectors in terms of weight are health care, technology and communication services, representing 34.58%, 34.50% and 13.11% of the equity portfolio.
Investors should be aware the 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.
Roku
ARK Invest purchased 1,873,368 shares of Roku (ROKU, Financial), boosting the position by 22.65% and its equity portfolio by 1.05%.
Shares of Roku averaged $97.34 during the second quarter; the stock is significantly undervalued based on Wednesday’s price-to-GF Value ratio of 0.25.
The San Jose, California-based streaming company has a GF Score of 71 out of 100 based on a rank of 8 out of 10 for growth and financial strength, a rank of 4 out of 10 for profitability and momentum and a rank of 2 out of 10 for GF Value.
Other gurus with holdings in Roku include Baillie Gifford (Trades, Portfolio) and Jim Simons (Trades, Portfolio)’ Renaissance Technologies.
Coinbase
ARK Invest added 1,968,476 shares of Coinbase (COIN, Financial), expanding the position by 28.19% and its equity portfolio by 0.91%. Shares averaged $96.68 during the second quarter.
The Wilmington, Delaware-based cryptocurrency company has a GF Score of 25 out of 100 based on a financial strength rank of 6 out of 10 and a profitability rank of 4 out of 10. However, the stock does not have enough data to compute a growth rank, GF Value rank and momentum rank and thus, the GF Score may give an incomplete picture of the stock’s potential.
Shopify
The firm sold 7,817,144 shares of Shopify (SHOP, Financial), slicing 86.56% of the position and 2.21% of its equity portfolio.
Shares of Shopify traded around $43.10 during the second quarter; the stock is significantly undervalued based on Wednesday’s price-to-GF Value ratio of 0.18.
The Ottawa, Ontario-based e-commerce company has a GF Score of 69 out of 100 based on a financial strength rank of 9 out of 10, a growth rank of 7 out of 10, a GF Value rank of 2 out of 10 and a rank of 4 out of 10 for profitability and momentum.
Spotify
The firm sold 2,344,963 shares of Spotify (SPOT, Financial), trimming 53.44% of the position and 1.48% of its equity portfolio.
Shares of Spotify averaged $113.37 during the second quarter; the stock is significantly undervalued based on Wednesday’s price-to-GF Value ratio of 0.38.
The Stockholm, Sweden-based music streaming company has a GF Score of 72 out of 100 based on a growth rank of 7 out of 10, a financial strength rank of 6 out of 10 and a rank of 4 out of 10 for profitability, GF Value and momentum.
Sea
ARK Invest sold 1,761,480 shares of Sea (SE, Financial), curbing 66.98% of the position and 0.88% of its equity portfolio.
Shares of Sea averaged $85.78 during the second quarter. GuruFocus’ GF Value Line labeled the stock as a possible value trap due to its low price-to-GF Value ratio of 0.2.
The Singapore-based e-commerce company has a GF Score of 67 out of 100 based on a growth rank of 8 out of 10, a financial strength rank of 5 out of 10, a momentum rank of 4 out of 10, a profitability rank of 3 out of 10 and a GF Value rank of 2 out of 10.
