Momentum is starting to roll Cathie Wood’s way. The Ark Invest co-founder, CEO, and chief investment officer is losing to the market for the third time and has had a couple of choppy years since her breakout performance in 2020, but her portfolio is bouncing back now. Not one to coast, Wood is making moves across her aggressive growth exchange-traded funds.
Ark Invest added to existing positions in The Trade Desk(NASDAQ: TTD), Pacific Biosciences of California(NASDAQ: PACB), and Guardant Health (NASDAQ: GH) on Thursday. Let’s take a closer look at some of Wood’s latest investments.
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Sometimes a blowout quarter isn’t enough. Shares of The Trade Desk slumped 6% on Friday last week, despite delivering a “beat and raise” performance. The stock fell despite at least eight analysts raising their price targets on the programmatic advertising leader following the third-quarter update.
Let’s make sense of the slide. For starters, the stock has been racing higher lately. The Trade Desk has soared 80% this year, and most of those gains have happened in just the last three months. When the shares sold off on Friday they still closed higher than they did just two days earlier. The Trade Desk is moving sharply higher for the fourth month in a row. With big upticks come the expectation of big beats.
Image source: Getty Images.
The Trade Desk’s third quarter was still applause-worthy. Revenue rose 27% to $628 million. Wall Street pros were looking for top-line growth of nearly 26%. This is The Trade Desk’s second strongest year-over-year quarterly revenue growth in the last two years. It was also a beat on the bottom line. Adjusted earnings climbed 24% to $0.41 a share, comfortably ahead of the 18% gain that analysts were expecting. This isn’t a surprise. The Trade Desk has topped market profit targets in each of this year’s first three quarters.
Guidance calls for the adtech leader to grow its revenue by at least 25% for the seasonally potent fourth quarter. This would be decelerating growth, but The Trade Desk has a history of lowballing with its analyst-facing outlooks.
The Trade Desk continues to thrive as the leader in the future of advertising. It continues to gain market share, and it’s a leader in connected TV and other ad platforms that are growing in popularity. It continues to check in with a customer retention rate of at least 95%, something that has been the case over the past decade. The Trade Desk is helping marketers get their messages heard by a wide audience, and that’s usually a good business to stand behind as an investor.
Wood has several bets on the future of medical solutions. One investment she added to is Pacific Biosciences of California, or PacBio for short. It’s a leader in long-read gene sequencing, arming scientists and clinical researchers with sequencing technologies to improve on current biology and health solutions.
PacBio also reported quarterly results last week, but it wasn’t as impressive as the The Trade Desk’s showing. Revenue rose a mere 2% to $40 million, short of analyst estimates. Its quarterly loss was in line with expectations.
Unlike The Trade Desk, shares of PacBio are trading sharply lower this year. However, the shares have more than doubled since bottoming out this summer. Analysts see revenue growth picking up next year and its losses narrowing significantly. It’s still a couple of years away from achieving actual profitability, but it’s taking steps in the right direction.
Finally, there’s Guardant Health, a developer of oncological tests. It also put out fresh financials late last week, and of the three reports it’s the one the market liked the best. Shares of Guardant Health soared 13% on Thursday last week following its third-quarter numbers.
Revenue rose 34% to $191.5 million for the three months ending in September, blasting through the $170 million that analysts were modeling. Guardant Health also posted a much smaller loss than its shareholders were expecting. It also boosted its full-year guidance. With a balance sheet flush with cash and a promising pipeline of clinical or biopharmaceutical tests, Guardant Health has time to play out for its investors.
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Rick Munarriz has positions in The Trade Desk. The Motley Fool has positions in and recommends Guardant Health, Pacific Biosciences Of California, and The Trade Desk. The Motley Fool has a disclosure policy.
