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Cathie Wood Watch: Ark Buys Big Into Biotech

by WOOWinvest
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Cathie Wood Watch: Ark Buys Big Into Biotech

Ark Investment Management CEO Cathie Wood, a prominent investor, bought a lot of biotech stocks on Monday.

All valuations below are as of Monday’s close.

Ark Fund to buy 860,480 shares of Ginkgo Bio (DNA) , a biotech company valued at $2.6 million. The stock is down 65% so far this year.

Ark Genome Revolution ETF (ARKG) – Get the ARK Genome Revolution ETF report Snapped up 604,154 shares of Butterfly Network (BFLY) – Get Butterfly Network Inc. Class A Report, an ultrasound equipment company valued at $2.2 million. The stock is down 46% so far this year.

Ark Fund snaps up 320,227 shares in Exact Sciences (EXAS) – Get Exact Sciences Corporation Report, a cancer diagnostics company valued at $14.5 million. The stock has fallen 42% so far this year.

Ark Genomic acquires 260,247 shares of Zymergen (ZY) – Get Zymergen Inc. Report, a biotech company valued at $439,817. The stock has given up three-quarters of its market value so far.

Ark Gene acquires 67,384 shares of Atai Life Sciences (ATAI) – Get ATAI Life Sciences NV Report, valued at $284,360. Atai is a Berlin-based biopharmaceutical company developing mental health treatments.

The percentage of U.S. adults showing symptoms of depression and anxiety nearly quadrupled from 11% in 2019 to 42% by the end of 2020, the company said on its website.

Shares in Atai have fallen 47% year to date.

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On the sell side, Ark Funds dumped 193,902 shares of Compugen (CGEN) – Get Compugen Ltd. report, an Israeli biotech company valued at $407,194. The stock is down 54% so far this year.

Track the S&P 500

As the Ark Fund has tumbled in recent months, Wood has defended her strategy, pointing to a five-year horizon for her investments.

and the five-year track record of Wood’s flagship Ark Innovations ETF (ARKK) – Get the ARK Innovation ETF report Until May 9th, that could indeed take comfort in investors. Before that, the fund’s five-year return had outperformed the S&P 500.

But Ark Innovation’s five-year annualized return totaled 10.26% through July 11, lagging the S&P 500’s return of 11.69%, according to Morningstar.

Ark Innovation has fallen 54% so far this year as Wood’s tech company has struggled. It is down 73% from its February 2021 peak. Raging inflation and soaring interest rates have helped put Kibosh on tech stocks.

Many of Wood’s investors don’t seem too concerned about the underperformance. Ark Innovations had a net inflow of $2.04 billion in the six months ended July 8, according to ETF research firm VettaFi.

“I think inflows are happening because our clients have been moving away from broad-based benchmarks like the Nasdaq 100,” Wood said. “We are fully committed to disruptive innovation. Innovation solves problems.”

Deflation risk

Meanwhile, Wood said she sees deflation as a bigger risk than inflation. Price indicators such as the consumer price index are lagging indicators, she said. In the 12 months through May, the CPI surged 8.6%.

Wood prefers statistics like the price of gold, which is down 4% from a year ago, while the dollar has risen sharply.

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