Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

Motley Fool
2024-10-22
  • Cathie Wood added to her positions in Amazon, 3D Systems, and CRISPR on Monday.
  • Amazon reports quarterly results next week. The stock initially tumbled in its previous report, but now it's closing in on another all-time high.
  • 3D Systems and CRISPR are down 53% and 23% respectively in 2024. Wood seems to think they're bargains here.

There's never a dull moment if you're a fan of Cathie Wood. The aggressive growth investor is the co-founder, CEO, and stock picker at Ark Invest. She publishes her daily transactions at the end of every trading day, and she added to a couple of her existing positions to kick off the new trading week.

The fund manager boosted her positions in Amazon (AMZN 0.33%), 3D Systems (DDD -1.67%), and CRISPR Technologies (CRSP -1.15%) on Monday. Let's take a closer look at her three latest reinvestments.

1. Amazon

The leading online retailer is the only one of the three stocks in this column that moved higher on Monday. Amazon is now trading 6% away from revisiting the all-time highs it hit in July.

Wood is adding to her stake ahead of next week's third-quarter report. Amazon delivers fresh financials after the market close on Halloween. She's expecting fewer tricks and more treats than one might imagine.

Buying in ahead of earnings didn't pay off last time. Shares of Amazon tumbled 9% the day after posting poorly received second-quarter results in late July. Revenue rose a weaker-than-expected 10% in the company's summertime report. A strong 19% increase for its Amazon Web Services segment wasn't enough to lift a 7% uptick internationally and the 9% gain for its stateside e-commerce business.

Image source: Getty Images.

Guidance also proved disappointing. Amazon was modeling 8% to 11% top-line growth for the third quarter that it will report next week. Analysts at the time were perched at the high end of that range. Despite the problematic outlook, Wall Street pros still see net sales rising 11% to hit $157.2 billion.

Analysts are a bit more ambitious on the bottom line. They are eyeing a 33% jump in earnings per share. This might seem ambitious, but it's been the easiest hurdle for Amazon to clear lately. Its profitability nearly doubled last time, and Amazon has come through with double-digit percentage earnings beats in its last four quarters.

With the stock closing in on its all-time highs, Wood is obviously hoping that this isn't a rerun of how earnings season played out for Amazon three months ago. Despite the slow top-line growth -- this is shaping up to be the third year in a row with net sales failing to top 12% -- Amazon's been coming through on the bottom line with its high-margin Amazon Web Services cloud computing business.

2. 3D Systems

3D Systems is one of this year's bigger disappointments. The 3D printing pioneer has seen its stock cut by more than half in 2024. Revenue is declining for the third consecutive year. The market doesn't expect a return to profitability anytime soon.

The once-undisputed leader of 3D printing stocks has fallen out of favor, but 3D Systems isn't throwing in the towel on what is possible in the field of additive manufacturing. Just last month, it received FDA clearance for a jetted denture solution and a total ankle prosthesis.

However, the buzz is still gone in the portfolios of investors. 3D Systems will likely remain that way until top-line growth returns. Revenue peaked in 2018, and it's clocking in at roughly a third of that now. It slashed its revenue guidance again over the summer. Analysts see a return to positive revenue gains next year, but they've been burned by their enthusiasm for a turnaround before.

Therapeutics" current_price="47.95" daily_high="48.42" daily_low="47.82" default_period="OneYear" dividend_yield="N/A" exchange="NASDAQ" fifty_two_week_high="91.10" fifty_two_week_low="38.16" gross_margin="31.46" logo="https://g.foolcdn.com/art/companylogos/mark/CRSP.png" market_cap="$4B" pe_ratio="-15.03" percent_change="-1.15" symbol="CRSP" volume="375,910">

3. CRISPR Therapeutics

There are few fields as promising as gene editing, and Wood has positions in several of the country's leading gene-editing stocks. CRISPR is a leading player in drumming up next-gen solutions to combat genetic diseases. It finally got its first approval last year with a potential treatment for sickle cell disease and transfusion-dependent beta-thalassemia. Now it's time to see if it can break through into the larger oncology and cardiovascular markets.

Time is on CRISPR's side. Despite a market cap north of $4 billion, nearly half of that is backed by the liquidity in its cash-rich balance sheet. With the stock still trading more than 20% lower this year, Wood likely sees an opportunity to add to a dynamic company at a discount to the otherwise rising stock market.

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