ARK Investment Management, the firm founded by Catherine Wood (Trades, Portfolio), disclosed in a regulatory filing that its top six trades during the fourth quarter of 2022 included boosts to its holdings of Tesla Inc. (TSLA, Financial) and Coinbase Global Inc. (COIN, Financial) and reductions to its positions in Fate Therapeutics Inc. (FATE, Financial), TuSimple Holdings Inc. (TSP, Financial), Nvidia Corp. (NVDA, Financial) and Spotify Technology SA (SPOT, Financial).
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 December 2022, the firm’s $11.54 billion 13F equity portfolio contains 230 stocks with a quarterly turnover ratio of 4%. The top four sectors in terms of weight are health care, technology, communication services and consumer cyclical, representing 37.92%, 36.51%, 10.9% and 9% 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.
Tesla
ARK Invest purchased 544,555 shares of Tesla (TSLA, Financial), boosting the position by 13.34% and its equity portfolio by 0.58%.
While shares of Tesla averaged $189.34 during the fourth quarter, the stock closed at $178.92 on Friday, up 11.82% from the previous close of $160.27. Despite this, the stock remains significantly undervalued based on its price-to-GF Value ratio of 0.41.
On Wednesday, the Austin, Texas-based electric vehicle manufacturer reported fourth-quarter 2022 revenue of $24.32 billion, topping the Refinitiv consensus estimate of $24.16 billion. Adjusted earnings of $1.19 per share outperformed the consensus estimate of $1.13 per share.
Tesla reported total revenue of $81.5 billion for 2022, up 51% from revenue of $53.8 billion for 2021. The company also reported $71.46 billion in automotive revenues, up from approximately $51 billion last year.
Tesla has a GF Score of 77 out of 100 based on a financial strength rank of 8 out of 10, a growth rank of 7 out of 10, a GF Value rank of 4 out of 10 and a rank of 5 out of 10 for momentum and profitability.
Tesla’s financial strength ranks 8 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8 out of 9, a strong Altman Z-score of 11 and an interest coverage ratio that outperforms approximately 83% of global competitors.
Other gurus with holdings in Tesla include Baillie Gifford (Trades, Portfolio) and Ron Baron (Trades, Portfolio)’s Baron Funds.
Coinbase
ARK Invest added 1,472,138 shares of Coinbase (COIN, Financial), boosting the position by 19.08% and its equity portfolio by 0.45%. Shares averaged $52.69 during the fourth quarter.
The Wilmington, Delaware-based company operates one of the largest cryptocurrency exchanges in the U.S. The company has a GF Score of 24 out of 100 based on a rank of 4 out of 10 for financial strength and profitability. Despite this, the company does not have enough data to compute a growth rank, a GF Value rank and a momentum rank and thus, the GF Score may give an incomplete picture of the company’s potential.
Fate Therapeutics
The firm sold 7,440,970 shares of Fate Therapeutics (FATE, Financial), chopping 63.84% of the position and 1.16% of its equity portfolio.
Shares of Fate Therapeutics averaged $18.78 during the fourth quarter; the stock is a possible value trap based on its price-to-GF Value ratio of 0.05 as of Friday.
The San Diego-based clinical stage biotech company has a GF Score of 65 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 and a rank of 2 out of 10 for GF Value and profitability.
TuSimple Holdings
ARK Invest sold 16,099,216 shares of TuSimple Holdings (TSP, Financial), reducing the position to just 132 shares. The transaction trimmed the equity portfolio by 0.85%.
While shares of TuSimple averaged $3.56 during the fourth quarter, the stock traded around $2.10 on Friday.
The San Diego-based autonomous freight network company’s financial strength ranks 6 out of 10 on the back of cash-to-debt and debt-to-equity ratios outperforming more than 92% of global competitors despite having a low Altman Z-score of 1.22.
TuSimple does not have enough data to compute ranks for profitability, growth, GF Value and momentum and thus, its GF Score of 18 out of 100 may give an incomplete picture of the stock’s potential.
Nvidia
The firm sold 859,443 shares of Nvidia (NVDA, Financial), slicing 62.16% of the position and 0.73% of the equity portfolio.
Shares of Nvidia averaged $146.65 during the fourth quarter; the stock is modestly undervalued based on its price-to-GF Value ratio of 0.85 as of Friday.
The Santa Clara, California-based semiconductor company has a GF Score of 99 out of 100 based on a rank of 10 out of 10 for profitability, growth and GF Value and a rank between 7 and 8 out of 10 for momentum and financial strength.
Spotify
ARK Invest sold 778,982 shares of Spotify (SPOT, Financial), chopping 97.34% of the position and 0.47% of its equity portfolio. Shares averaged $80.65 during the fourth quarter.
GuruFocus’ GF Value Line labeled the Swedish music streaming giant a possible value trap due to the company’s low price-to-GF Value ratio of 0.38 and a rank of 5 out of 10 or below for financial strength, profitability and momentum.
Based on these ranks, Spotify’s GF Score is just 69 out of 100.
