Cathie Wood Watch: Ark Buys Zoom, Sells Tesla

Cathie Wood, chief executive of Ark Investment Management, bought and sold some of her top names Friday.

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Ark funds purchased 53,958 shares of Zoom Video Communications  (ZM) - Get Free Report, the video-conferencing service. That stash was valued at $3.8 million as of Friday’s close. It represented Wood’s first purchase of Zoom since May 23.

The company reported a 3% revenue gain in the quarter ended April 30, but an 86% plunge in total net income. The stock has tumbled 36% over the last year, but has firmed 3% so far this year. Zoom is the third biggest holding in Wood’s flagship Ark Innovation ETF  (ARKK) - Get Free Report.

Meanwhile, Ark funds unloaded 73,113 shares of electric vehicle colossus Tesla  (TSLA) - Get Free Report, valued at $19 million as of Friday’s close.

The sale likely represents profit-taking, as Wood is a long-time evangelist for Tesla and its founder Elon Musk. The company remains far and away the biggest holding in Ark Innovation ETF.

Wood has a five-year price target of $2,000 for the stock. It recently traded at $261. Tesla shares have soared 112% so far this year and have gained 20% over the past year. The company continues to benefit from the global transition to electric cars.

Shopify and Teladoc Trades

Also Friday, Ark funds shed 86,776 shares of e-commerce host Shopify  (SHOP) - Get Free Report, valued at $5.6 million as of Friday’s close.

The company’s stock has jumped 40% since May 3, after it announced a sale of most of its logistics business and laid off 20% of its workforce. Shopify dumped the logistics stake to focus on its core e-commerce platform business.

Its stock has leaped 86% year to date and 104% over the past 12 months, and it’s the eighth largest holding in Ark Innovation.

Finally, Ark funds snapped up 142,786 shares of Teladoc Health  (TDOC) - Get Free Report, the phone/video healthcare provider, valued at $3.6 million. It was Wood’s first acquisition of the stock since May 2.

The company reported an 11% revenue increase in the first quarter from a year earlier, and its net loss was little changed at 42 cents a share compared to 41.58 cents a year ago.

Teladoc shares have dropped 19% over the last 12 months, but are up 5% year to date. It’s the 14th largest holding in Ark Innovation.

Wood’s Lagging Returns

Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past couple years, as her young technology stocks have slumped. Ark Innovation has descended 72% from its February 2021 peak.

Nonetheless, the fund has bounced back 42% so far this year, as tech stocks have rebounded in general. The tech-heavy Nasdaq Composite has risen 31%.

Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $8.2 billion-asset Ark Innovation was negative 0.08% through June 16, compared with positive 11.6% for the S&P 500, according to Morningstar.

The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.

Ark Innovation suffered a net investment outflow of $89 million during the five days through June 16, and $193 million over the last year, according to ETF research firm VettaFi.