Cathie Wood, CEO and founder of Ark Invest, says she invests on a five-year time horizon, betting big on speculative growth names such as Tesla (TSLA), Roku (ROKU), Zoom Video Communications (ZM) and Shopify (SHOP). But in 2022 at least, Ark's 10 biggest holdings are down sharply.
Zoom Video Communications is the biggest holding across Ark Invest's various ETFs as of Nov. 28, followed by Exact Sciences, Tesla, Roku and Square-parent Block (SQ). UiPath (PATH), Teladoc Health (TDOC), Shopify, Intellia Therapeutics (NTLA) and Crispr Therapeutics (CRSP) round out Cathie Wood's 10 largest stock positions.
CRSP stock is the best performer of this big Ark holdings, and it's still down nearly 30%. ROKU stock is the laggard, plunging more than 76% in 2022. Tesla stock is off 48%, better than the average decline of nearly 60%.
Meanwhile, the S&P 500 is down 16.8% so far this year, while the Nasdaq composite is off 29.4%. The Dow Jones Industrial Average has declined just 6.85%.
Teladoc Leads Ark Declines From All-Time Highs
All of Ark Invest's top 10 stocks are down even more from their record highs set in 2020 or 2021. TDOC stock has crashed 91% from its February 2021 peak. Tesla stock is 56% below its November 2021 top, and that's the smallest decline.
On average, these 10 top Ark Invest holdings are off 79% from all-time highs.
Cathie Wood Adds To Losers
Cathie Wood and Ark Invest didn't buy right at the top on all these stocks. She prefers to buy on weakness and sell on strength.
She substantially whittled down Ark Invest's Tesla stake was closer to record highs, though she added back some shares more recently.
Still Tesla stock is the only winning position in Cathie Wood's top 10 holdings. NTLA stock and CRSP stock are the only holdings even close to break-even for Ark Invest.
Over the past year, Wood has added to Roku, UiPath stock and several others in the past year following big sell-offs.
In 2020 and into 2021, word of Cathie Wood taking a new or bigger position in a stock would trigger a big advance the next day. But no longer.
Cathie Wood's 10 largest holdings account for nearly 45% of Ark Invest's total holdings, with ZM stock and Tesla each accounting almost 6%. Ark owns just 0.13% of megacap Tesla stock, but about 11% of TDOC stock and Intellia Therapeutics. Wood also owns more than 9% of EXAS stock, Roku, UiPath and Crispr Therapeutics.
Tesla Profitable, But Many Money-Losing Ark Invest Stocks
Tesla earnings are strong and still growing rapidly, but it's an outlier among Cathie Wood's big Ark Invest holdings. Zoom Video and Square are profitable, though earnings are declining sharply in 2022. Shopify and UiPath are seen reporting slim profits or losses.
Roku, Exact Sciences, Teladoc, Crispr Therapeutics and Intellia Therapeutics are expected to report big losses in 2022 and 2023.
Cathie Wood's flagship ARK Innovation ETF (ARKK) is down 63% in 2022 and 78.1% from its February 2021 top. Earlier this month, ARKK hit a five-year low. The Ark Genomic Revolution ETF (ARKG) hit a two-year low in June while the Ark Fintech Innovation ETF (ARKF) set a record low this month.
Some of these top 10 Ark holdings may mount a comeback, recovering their massive losses and going on to much-higher peaks. But many may not. These companies are in cutting-edge fields, from EVs to automation to telemedicine and gene editing. But that doesn't necessarily mean these particular companies and stocks will lead the way, even on a Cathie Wood-style time horizon.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.