Its latest 13F filing to the US Securities & Exchange Commission revealed that the investment fund has taken new positions in online trading firm Robinhood [HOOD], and added to positions in DraftKings [DKNG], Teladoc [TDOC], Coinbase [COIN], Unity Software [U] and UiPath [PATH]. It has sold out of Chinese ecommerce group Alibaba [BABA], Slack Technologies [WORK] and General Electric [GE], and reduced positions in others such as Tesla [TSLA] and Roku [ROKU].
Alibaba —Share price of the Chinese ecommerce giant has plunged around 50% since mid-February because of the Chinese government’s crackdown on technology firms’ business models and data privacy. Ark’s sell-out has been well-flagged, with a number of publications reporting that the exit had been made by early September. Ark has also pared back its investment in Alibaba rival JD.com [JD], whose shares have dropped 16% since mid-February.
General Electric — The conglomerate’s share price has dropped 12% since the end of May. The main reason behind that and, perhaps, Wood’s decision to pull the plug is GE’s intention to break itself up into three separate divisions — aviation, healthcare and energy. It aims to spin-off its healthcare unit by early 2023 and the energy unit by early 2024. The GE brand will remain with the aviation unit.
“By creating three industry-leading, global public companies, each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth,” said Lawrence Culp, CEO of General Electric.
Roku — The video streaming company’s share price has plunged by 45% since the end of July to 26 November. Its Q3 revenues rose 51% year-over-year to $680m, but missed analysts’ expectations. Active accounts were up by 1.3 million; however, this was a slowdown from the 1.5 million rise in the previous quarter. Its management blamed supply chain disruptions in the sales of televisions in the US as a headwind, rather than customers moving away from the streaming habits they acquired in lockdown.
According to Market Screener, 25 analysts have a consensus ‘buy’ rating on the stock and a $403.36 target price.
Robinhood — The online broker has had a tough period since its IPO in July. Its share price rose from its initial float price of $38 to as high as $85 in August, boosted by millennial investors and cryptocurrency demand. However, it has now slipped to around $28 to date, as of 24 November. It has been hit by a series of incidents, from a cyber-hack which put the personal data of around 7 million people at risk, to threats from the US Securities & Exchange Commission to ban payment for order flow, which account for around 80% of the non-commission broker’s revenue.
“Wood and her firm frequently say that they have at least a five-year investment horizon and acknowledge that the disruptive companies they target are often volatile,” reported Bloomberg.
According to Market Screener, analysts share some of the Ark nerve and confidence. They have a consensus rating of outperform on the stock and a target price of $42.67.
Teladoc Health — The virtual care group had a strong pandemic as people sought medical advice during lockdown. However, since society has opened up again — including doctors’ surgeries — its shares have plunged from around $292 in mid-February this year to $106 as of the close on 24 November. Some laud the Teladoc model as the future, with McKinsey & Company suggesting that up to $250bn of current US healthcare spend could potentially be virtualised. It recently revealed that 40% of people would continue to use telehealth services going forward, up from 11% of consumers using telehealth prior to COVID-19. But there are concerns over the often-impersonal nature of the technology and how it could impact the traditional doctor/patient relationship. McKinsey also highlighted the need for better integration of virtual health into day-to-day workflows of clinicians to combine online and in-person care delivery.
According to Market Screener, analysts are bullish, holding a consensus outperform rating and a target price of $167.36.
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The investment universe is changing beyond all recognition, and with a thematic focus, investors can capitalise on this wholesale disruption. From Genomics to Artificial Intelligence, disruptive innovation empowers companies to displace industry incumbents, and secure majority market share. Opto exists to identify those businesses, and help investors to invest in the next big idea.