Prominent investor Cathie Wood, chief executive of Ark Investment Management, on Tuesday bought shares of a communications software company and several health-related companies.
All valuations below are as of Tuesday’s close.
Ark funds snatched 51,220 shares of Twilio (TWLO), the San Francisco communications- software company, for $5.4 million. The stock has dropped 59% so far this year.
Wood has said in recent months that declines in disruptive technology stocks this year have created buying opportunities.
Ark Genomic Revolution ETF (ARKG) snagged 224,460 shares of CareDX (CDNA), an organ-transplant-services firm, valued at $5.6 million. The stock has slumped 44% year to date.
Ark Genomic also purchased 90,129 shares of Schrodinger (SDGR), a drug discovery/software company, valued at $2.3 million. The stock has slid 25% this year.
The genomic fund snatched 164,513 shares of Adaptive Biotechnologies (ADPT), valued at $1.3 million. The stock has slumped 72% year to date.
And Ark Genomic snapped up 201,122 shares of Zymergen (ZY), a biotechnology company, valued at $285,593. It was the second straight session in which Ark Genomic bought Zymergen. The stock has given up 77% this year.
Trailing the S&P 500
As Ark funds have tumbled in recent months, Wood has defended herself by noting that she has a five-year investment horizon.
And the five-year track record of Ark Innovation could have given investors comfort until May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled 11.28% through May 31, behind the S&P 500’s 13.38% return.
Ark Innovation has sunk 53% so far this year, as Wood’s tech companies have hit the skids. And it’s down 72% from its February 2021 peak. Raging inflation and soaring interest rates have helped put the kibosh on tech stocks.
Still, Wood’s investors aren’t deserting her. Ark Innovation enjoyed a net inflow of $1.2 billion in the six months through May 27, according to VettaFi, an ETF research firm.
Stagdeflation
Meanwhile, Wood discussed her macroeconomic views in a recent webinar.
While many experts expect a bout of stagflation -- sluggish economic growth combined with rising inflation -- she sees stagdeflation. That’s slow growth combined with falling inflation.
“We are probably going to see more deflationary forces at the end of all this than inflationary forces,” Wood said. “We are in the early stages of seeing this.” Consumer prices soared 8.3% in the 12 months through April.
Naturally, Wood says this will be a good time for her “disruptive” technology stocks: “During tough times, innovation gains traction.”
