Cathie Wood, chief executive of Ark Investment Management, moved in opposite directions on two of her biggest holdings Friday.
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Ark funds bought 575,814 shares of UiPath (PATH), which makes robotic process automation software. The stake was valued at $9.9 million as of Friday’s close.
UiPath reported a revenue increase of 18%, to $290 million, in its fiscal first quarter ended April 30 from a year earlier. The company posted a net loss of $31.9 million, shrinking from $122.6 million last year.
Ark has bought shares of UiPath numerous times since last October. It’s the fourth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK). The stock has jumped 39% so far this year, but is still down 6% over the past 12 months.
On the selling side Friday, Ark funds unloaded 171,303 shares of e-commerce host Shopify (SHOP), valued at $10.5 million. Shopify is the eighth biggest position in Ark Innovation.
The company’s stock has soared 39% 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 surged 85% year to date and the same amount over the past 12 months.
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 73% from its February 2021 peak.
Nonetheless, the fund has bounced back 38% so far this year, as tech stocks have rebounded in general. The tech-heavy Nasdaq Composite has climbed 28%.
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 billion-asset Ark Innovation was negative 0.17% through June 9, compared with positive 11.04% 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 $120 million during the five days through June 9, and $226 million over the last year, according to ETF research firm VettaFi.
What Draws Investors to Wood
You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.
Wood does have her detractors. Morningstar analyst Robby Greengold offered a harsh critique of Ark Innovation in March. “Its dubious ability to successfully navigate the challenging territory it explores earns a rating of negative,” he wrote.
Wood, of course, begs to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said last year in an interview with Magnifi Media by Tifin.
