Cathie Wood's Bargain Hunting: 3 Stocks She Just Bought

Cathie Wood, the renowned investor and CEO of Ark Invest, has been actively buying stocks in recent days, focusing on companies with strong fundamentals and growth potential. By examining the fundamentals of the three stocks she recently purchased—Amazon (AMZN), MercadoLibre (MELI), and CRISPR Therapeutics (CRSP)—we can gain insights into her investment strategy.
1. Amazon (AMZN): Wood increased her stake in Amazon, despite the stock's recent rise. This move suggests she believes the company's fundamentals remain robust. Amazon's third-quarter results showed a 11% increase in net sales, driven by strong growth in both domestic and international e-commerce, as well as its thriving AWS cloud-hosting business. The company also reported a 52% increase in earnings per share, demonstrating its ability to widen margins and overcome modest top-line gains. Amazon's guidance for the holiday quarter, although lower than the previous outlook, still indicates strong bottom-line growth potential.
2. MercadoLibre (MELI): Wood bought shares of MercadoLibre, the Latin American e-commerce and fintech giant, despite a recent dip in the stock price following disappointing financial results. MercadoLibre's revenue rose 35% in U.S. dollars, in line with expectations, but its bottom line only increased by 11%. Despite the earnings miss, Wood likely sees the company's long-term potential, as it has historically rewarded investors who buy on dips. MercadoLibre's e-commerce platform and Mercado Pago fintech solution have driven growth, and the company's cash-rich balance sheet provides a solid foundation for future expansion.
3. CRISPR Therapeutics (CRSP): Wood added to her stake in CRISPR Therapeutics, a leading gene-editing company, two days after it posted mixed quarterly results. Although CRISPR missed revenue expectations, it managed to narrow its losses. Wood's investment in CRISPR is likely driven by the company's potential in gene editing, as it works on clinical trials for oncology, autoimmune, diabetes, and cardiovascular solutions. CRISPR's cash-rich balance sheet and the long-term potential of its gene-editing technology make it an attractive investment for Wood, despite short-term setbacks.
In summary, Cathie Wood's decision to buy these three stocks is supported by their strong fundamentals, growth potential, and attractive entry points. By focusing on companies with robust business models, solid management, and favorable market trends, Wood demonstrates her commitment to identifying undervalued opportunities with significant upside potential. As the market continues to fluctuate, investors can learn from Wood's contrarian approach and consider adding these stocks to their portfolios.