Much has been written and discussed about the incredible success and then failure of Cathie Woods and the phenomenal ARK Innovation exchange-traded fund, which exploded in 2020, only to implode in the fall of 2021 and trade sideways for most of 2022. The huge parabolic move in 2020 and 2021 saw the ARK Innovation ETF rise a stunning 313% between March 15, 2020, and February 7, 2021. Investors that were late to the party then saw the fund crash and burn, from a $156.58 all-time high to a $30.97 closing low on December 19, 2022, a massive round-trip decline.
So, the question for investors is whether Woods’s investing style is all show and no real place for anybody to invest, or is her desire to own companies that will excel and prosper in the future the right place to be, especially now with the price of the ARK funds sitting just $10 above the low printed last December. While some would say no, for investors with a long-term outlook and big-time risk tolerance, the time may indeed be now.
For those not wanting to own the entire basket of stocks in the fund, we screened the holdings looking for the five companies that are almost guaranteed winners now and in the future. Though these stocks are rated Buy across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
We listed the stocks by the size of their weighting in the ARK portfolio.
Tesla
Elon Musk has captured lightning in a bottle more than once, and this is his biggest success. Tesla Inc. (NASDAQ: TSLA) designs, develops, manufactures, leases and sells electric vehicles and energy generation and storage systems in the United States, China and elsewhere.
Its Automotive segment offers electric vehicles, as well as sells automotive regulatory credits. It offers non-warranty after-sales vehicles, used vehicles, retail merchandise and vehicle insurance services. This segment also provides sedans and sport utility vehicles through direct and used vehicle sales, a network of Tesla Superchargers, and in-app upgrades; purchase financing and leasing services; services for electric vehicles through its company-owned service locations and Tesla mobile service technicians; and vehicle limited warranties and extended service plans.
The Energy Generation and Storage segment engages in the design, manufacture, installation, sale and leasing of solar energy generation and energy storage products and related services to residential, commercial and industrial customers and utilities through its website, stores and galleries, as well as through a network of channel partners. It offers provision of service and repairs to its energy product customers, including under warranty, as well as various financing options to its solar customers.
Tesla stock is Woods’s top holding, with a whopping 12.4% weighting, and she added more shares when the stock got hit earlier this year. Royal Bank of Canada has a Wall Street high $305 target price. The consensus target is just $194.84, well below Friday’s close at $256.60.
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