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These 3 Cathie Wood Stocks Are Set To Increase By 40% (Or More)
The markets of late are a mix of earnings and volatility, and it’s hard for investors to understand at times. At times like these, it makes sense to turn to the experts. Cathie Wood is one of those experts, an investor whose stock options have consistently outperformed the markets in general. Sheltered from famed economist Arthur Laffer, market guru Wood has built her reputation on her clear vision of the markets. His firm is Ark Invest, whose innovation ETF has more than $ 52 billion in assets under management, making him one of the largest institutional investors on the scene. Better yet, Wood’s stock options paid off during the ‘crown year’; The overall performance of the ETF in 2020 was a staggering 170%. With returns like that, it’s clear Cathie Wood knows what she’s talking about when she chooses a stock. So, we’re taking a look at three of your stock options, all of the ‘Top 10’ of your company’s holdings, by weight percentage within the portfolio. Using the TipRanks platform, we have found that according to some Street analysts, each has at least 40% upside potential for the next year. Let’s get the truth. Teladoc Health, Inc. (TDOC) The top stock on our list, Teladoc, was one of the ‘pioneers’ in the telehealth industry, offering remote healthcare for non-emergency problems. Patients can use Teladoc to consult on ear, nose and throat issues, laboratory referrals, basic diagnostics and medical advice, and non-addictive substance prescription refills. Teladoc bills its service as offering remote home visits by primary care physicians. Despite the obvious benefits of Teladoc’s service during the pandemic year and steadily rising revenue, the company’s stock has underperformed the markets overall over the past 12 months. A look at the most recent quarterly report, for 1Q21, will shed some light. The company reported $ 453.6 million on the top line, an impressive 150% year-over-year. However, the earnings told a different story. At $ 199.6 million, the net loss in the first quarter was much deeper than the loss of $ 29.6 million in the prior-year quarter. Per share, the loss was $ 1.31, compared to just 40 cents a year earlier. Losses weighed on investors’ minds, but the company’s orientation was more worrying. Management predicts that paid membership will be flat year-on-year in 2021. The shares fell 10% after the earnings release. Cathie Wood, however, began buying shares, taking advantage of the price drop to increase her TDOC holdings. His company purchased more than 716,000 shares, worth more than $ 122 million at the time of purchase. Teladoc is Ark’s No. 2 holding and represents more than 6% of the fund’s portfolio. While BTIG analyst David Larsen notes investor concerns, he believes the long-term outlook for the company remains positive. “The issue that may weigh on stocks is that the 2021 membership guidance of 52 to 54 million (+ 2% YoY) was unchanged,” Larsen said. “Despite this headwind, we still like the company and the stocks. Management noted that the ‘membership pipeline’ has now risen more than 50% YoY, which is higher than what was reported in Q4: 20, and many of these deals are progressing. TDOC also won a great BCBS plan in the Northeast because of the “whole person” model, and it is a competitive advantage. We believe that management feedback on the membership base is highly calculated, and we would expect membership growth in 2022 to be much better than the growth rate in 2021 ”. Based on your feedback, Larsen rates TDOC as a Buy, and its $ 300 price target implies an 83% increase for next year. (To view Larsen’s history, click here.) Overall, Teladoc achieves a Moderate Buy from analyst consensus, a rating derived from 23 reviews including 14 for Buy and 9 for Hold. The stock is priced at $ 163.21 with a median price target of $ 243.68, making the one-year gain a solid 49%. (See Teladoc’s stock analysis on TipRanks.) Zoom Video Communications, Inc. (ZM) The next step, Zoom, needs no introduction. This technology-based video communications company had a low profile in 2019, but in the 2020 corona crisis, Zoom came of age. The company underwent a huge expansion, in usage and user base, and its shares peaked in November 2020 with a price well above $ 500 per share. It has since declined, but even after that decline, ZM shares still show a 121% one-year gain. The stock price drop on Zoom can best be viewed as temporary volatility on an otherwise solid stock. Zoom went public in April 2019 and has reported sequential revenue and earnings gains in each quarter since then, with earnings accelerating last year. For the fourth quarter of fiscal 2021, the latest reported, Zoom reported $ 882.5 million on the top line, an increase of 13.5% sequentially and a whopping 368% year-over-year. EPS in the last quarter was 87 cents; this compares to just 5 cents a share the previous year. Zoom reported $ 377.9 million in free cash flow for 4Q21, compared to $ 26.6 million a year earlier. In customer metrics, Zoom reported equally strong growth. It had more than 467,000 customers with more than 10 employees, a growth of 470% year-over-year, and 1,644 customers who paid more than $ 100,000 in the last 12 months, an increase of 156% year-on-year. As for Cathie Wood, she believes Zoom will continue to grow, saying, “I think it’s going to usurp a lot of the old telecommunications infrastructure.” Two of Wood’s Ark’s funds own Zoom shares, more than 2.4 million shares in total, Zoom represents approximately 3.40% of Ark’s portfolio. Five-star Merrill Lynch analyst Daniel Bartus also likes ZM’s stock and writes about the company’s model: “In our opinion, Zoom’s superior video experience has solidified its position as the ZM meeting platform. referral after COVID. As the pandemic persists and businesses embrace more flexible workforces, we believe 2021 will be another good year for Zoom. In the aftermath of the pandemic, we believe Zoom remains well positioned as the new communications standard and the upselling of Zoom Phones, Rooms and additional features in the 467k customer base offsets the churn risk for smaller customers. “Bartus puts a Buy rating on the stock, with a $ 480 price target suggesting a potential upside of 52% next year. (To view Bartus’s history, click here.) Wall Street’s views on Zoom offer A bit of a conundrum. The analyst consensus here is a hold, based on reviews that include 6 for Buy, 10 for Hold, and 2 for Sell. On the other hand, the average target price of $ 444.40 per share implies a 41% rise over the one-year horizon. (See Zoom’s stock analysis on TipRanks.) Shopify, Inc. (SHOP) Last on our list of Wood’s picks, Shopify is an e-commerce giant based in Canada what e needs no introduction. Shopify has been around for 15 years and was one of the first leaders to provide third party ecommerce platforms. The company’s services include payment processing, marketing, shipping, and customer engagement. Shopify raised $ 2.93 billion last year and has seen sequential revenue gains in each of the last four quarters. While the stock has been slower in 2021, it is still up 77% over the past 12 months, comfortably outpacing the S&P 500’s 47% one-year gain. As of 2021, Shopify reported revenue growth of 110% year-over-year for the first quarter, with the top line reaching $ 988.7 million. The company’s first-quarter earnings per share, $ 9.94 per share, was inflated by unrealized earnings from an equity investment, making comparison difficult, but the company also reported $ 7.87 billion in Cash holdings at the end of March, compared to $ 6.39 billion at the end of December. Strong earnings and cash holding gains are supported by a growing user base. Shopify’s mobile app Shop now has more than 107 million registered users, of which 24 million are monthly active users. And the company has good word of mouth publicity; 45,800 of its ‘partners’ referred a merchant to the service in the previous 12 months, a 73% year-on-year gain. By looking at all of this, Cathie Wood believes that we may be seeing the beginning of the “next Amazon.” She says, referring to the company’s position in the market and its growth prospects, “Shopify doesn’t care who wins. He’s going to be involved with many, if not most, of all the sites that are going to drive trading. “His Ark funds are gobbling up SHOP stock – they own over 690K, worth over $ 754 million to current valuation. Colin Sebastian, Baird’s five-star analyst, agrees that Shopify is a buy-in. He writes: high level of innovation in platform services and maintain a high level of scalability. As such, we would be share buyers on any pullback related to margin comment … We believe Shopify will continue to be a key beneficiary of the migration to commerce multi-channel electronic as businesses leverage and integrate a wide range of consumer touch points to drive sales, including traditional offline, online nea, in-store, mobile devices, kiosks and call centers. ” Sebastian’s price target here, $ 1,550, suggests a 42% rise for the next 12 months. Your rating is Best Performance (that is, a Buy). (To see Sebastian’s track record, click here.) High-profile tech companies tend to attract a lot of attention, and Shopify has received no fewer than 30 analyst reviews in recent weeks. These are divided into 16 buys, 13 holds, and only one sale, making the analyst consensus a moderate buy. The shares are priced at $ 1,092.01 and the average price target of $ 1,482.21 implies that they have room to gain 36% this year. (See the Shopify stock analysis on TipRanks.) To find good ideas for trading stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a recently launched tool that ties together all of TipRanks’ equity perceptions. Disclaimer: The opinions expressed in this article are solely those of prominent analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.