These 3 Cathie Wood shares are expected to increase by 40% (or more)
These days, the markets have been a mixture of gains and volatility, and it is sometimes difficult for investors to understand the meaning. At times like these, it makes sense to turn to the experts. Cathie Wood is one such expert, an investor whose stock choices have consistently outperformed all markets. Protected by the famous economist Arthur Laffer, the market guru Wood has built her reputation on her clear vision of the markets. His firm is called Ark Invest, whose Innovation ETF has more than $ 52 billion in assets under management, making it one of the largest institutional investors in the market. Best of all, Wood’s stock picks were rewarded during the “corona year”; the overall ETF return in 2020 was an incredible 170%. With returns like this, it’s clear that Cathie Wood knows what she’s talking about when she picks an action. We therefore examine three of his stock picks, all from his company’s “top 10” holdings, as a percentage weighting within the portfolio. Using the TipRanks platform, we’ve found that some Street analysts say each has at least 40% upside potential for the coming year. Let’s get the truth. Teladoc Health, Inc. (TDOC) The first title on our list, Teladoc, has been one of the most “to adopt” companies in the telehealth industry, making remote medical care available for non-urgent problems. Patients can use Teladoc to consult on ear-nose-throat issues, lab referrals, basic diagnostics and medical advice, and prescription refills for non-addictive substances. Teladoc bills its service as offering remote home visits by general practitioners. Despite the clear benefits of Teladoc’s service during the pandemic year and steadily increasing revenues, the company’s shares have underperformed broader markets over the past 12 months. A look at the latest quarterly report – for 1Q21 – will shed some light. The company said $ 453.6 million at the top line, an impressive 150% year-over-year increase. The income, however, told a different story. At $ 199.6 million, the net loss in the first quarter was much larger than the loss of $ 29.6 million in the quarter last year. Per share, the loss amounted to $ 1.31, down from just 40 cents a year earlier. The losses weighed on the minds of investors, but the company’s forecast was more worrisome. Management predicts that paid memberships will be stable year-on-year in 2021. The stock is down 10% after the results were released. However, Cathie Wood started buying stocks, taking advantage of falling prices to increase her holdings in TDOC. His company has purchased more than 716,000 shares, worth more than $ 122 million at the time of purchase. Teladoc is Ark’s second stake, representing more than 6% of the fund’s portfolio. Although BTIG analyst David Larsen notes investor concerns, he believes the company’s long-term outlook remains positive. “The problem that could weigh on the action is that the membership forecast for 2021 of 52-54 million (+ 2% y / y) has remained unchanged,” Larsen said. “Despite this headwind, we still love the company and the title. Management pointed out that the “membership pipeline” is now up more than 50% year-on-year, which is higher than what was reported in 4Q: 20, and that many of these deals are progressing. TDOC also won an extensive BCBC plan in the northeast using the whole person model, and that’s a competitive result. We believe that management’s comments regarding membership numbers are very calculated and we expect membership growth in 2022 to be much better than the growth rate of 2021. ”Consistent with his comments, Larsen rates TDOC as one buy, and his price target of $ 300 implies an 83% hike for the coming year. (To see Larsen’s track record, click here.) Overall, Teladoc gets an analyst consensus moderate buy, a derived rating of 23 reviews with 14 to buy and 9 to hold. The shares are priced at $ 163.21 and have an average price target of $ 243.68, making the one-year gain a solid 49%. (See Teladoc’s market analysis on TipRanks.) Zoom Video Communications, Inc. (ZM) Next, Zoom, does not need to be introduced. This tech-based video communications company had a low profile in 2019, but during the corona crisis of 2020, Zoom came of age. The company has seen tremendous expansion, in terms of usage and user base, and its share peaked in November 2020 with a price tag well over $ 500 per share. It has since declined – but even after that decline, ZM shares are still showing a one-year gain of 121%. The fall in the Zoom share price can best be seen as temporary volatility in an otherwise healthy stock. Zoom went public in April 2019 and has reported sequential earnings and earnings gains every quarter since – with gains accelerating last year. For the fourth quarter of fiscal 2021, the latest report released, Zoom reported $ 882.5 million at the top of the page, up 13.5% sequentially and 368% year-on-year. EPS in the last quarter was 87 cents; this compares to just 5 cents of income per share the year before. Zoom reported $ 377.9 million in free cash flow for 4Q21, up from $ 26.6 million a year earlier. As far as customer indicators are concerned, Zoom recorded equally strong growth. It had over 467,000 customers with more than 10 employees, growing approximately 470% year-on-year and 1,644 customers who paid more than $ 100,000 in the past 12 months, up 156% year-on-year . As for Cathie Wood, she believes Zoom will continue to grow, saying, “I think this is going to usurp a lot of the old telecommunications infrastructure.” Two of the Wood’s Ark funds own Zoom shares, more than 2.4 million shares in total, Zoom represents approximately 3.40% of Ark’s portfolio. 5-star analyst Daniel Bartus, of Merrill Lynch, also likes ZM stocks and writes of the company’s model: “In our opinion, Zoom’s superior video experience has solidified its position as a platform. baseline meetings after COVID. As the pandemic persists and businesses embrace more flexible workforces, we believe 2021 will be another good year for Zoom. After the pandemic, we believe Zoom remains well positioned as a new communications standard, and the up-selling of Zoom Phone, rooms and additional features based on 467,000 customers offsets the risk of unsubscribing among smaller customers. Bartus gives the stock a buy rating, with a price target of $ 480 suggesting upside potential of 52% for the coming year. (To look at Bartus’ track record, click here.) Wall Street’s Zoom views offer a bit of a conundrum. The analyst consensus here is a Hold, based on reviews that include 6 to buy, 10 to hold, and 2 to sell. On the other hand, the average share price target of $ 444.40 implies a 41% increase over the one year horizon. (See Zoom’s stock analysis on TipRanks.) Shopify, Inc. (SHOP) Last on our list of choices from Wood, Shopify is a Canada-based e-commerce giant that doesn’t need to be introduced. . Shopify has been around for 15 years and was an early leader in providing e-commerce platforms to third parties. The company’s services include payment processing, marketing, shipping, and customer engagement. Shopify grossed $ 2.93 billion last year and has seen sequential revenue gains in each of the past four quarters. While the stock found 2021 to be more difficult, it’s still up 77% over the past 12 months, easily beating the S&P 500’s 47% year-on-year gain. As of 2021, Shopify has seen growth of 110% year over year revenue for the first quarter, revenue reaching $ 988.7 million. The company’s first-quarter EPS of $ 9.94 per share was inflated by unrealized gains from an equity investment, making it difficult to compare, but the company also said $ 7.87 billion. in cash at the end of March, compared to $ 6.39 billion at the end of December. . The strong earnings and cash gains are supported by a growing user base. Shopify’s mobile app, Shop, now has over 107 million registered users, of which 24 million are monthly active users. And, the company has good word of mouth publicity; 45,800 of its “partners” referred a fellow merchant to the service during the previous 12 months, an annual gain of 73%. Looking at all of this, Cathie Wood thinks we may be witnessing the start of the “next Amazon”. She says, referring to the company’s position in the market and its prospects for growth, “Shopify doesn’t care who wins. He will be involved in most, if not most, of all the sites that will boost the business. His Ark funds are gobbling up shares of SHOP – they hold over 690K, worth over $ 754 million at current valuation. Colin Sebastian, 5-star analyst at Baird, agrees that Shopify is a stock to buy. He writes: “We believe that higher spending levels support the huge opportunity in the e-commerce market, support a high level of innovation in platform services, and maintain a high level of scalability. As such, we would be equity buyers on any pullbacks related to margin feedback … We believe Shopify will continue to be a key beneficiary of the migration to multi-channel ecommerce as companies leverage and integrate a wide range contacts with consumers. points to drive sales, including traditional offline, online, in-store, mobile, kiosk and call center points. Sebastian’s price target here, $ 1,550, suggests a rise of 42% for the next 12 months. His rating is outperformance (ie a buy). (To see Sebastian’s track record, click here.) Top-tier tech companies tend to get a lot of attention, and Shopify has garnered no less than 30 reviews from analysts in recent weeks. These break down into 16 buys, 13 holds and a single sell, making analyst consensus a moderate buy. The shares are priced at $ 1,092.01, and the average price target of $ 1,482.21 implies that they have the potential to gain 36% this year. (See Shopify’s stock analysis on TipRanks.) To find great ideas for stocks traded at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks. . Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.