Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought
Key Points
On Monday, Cathie Wood's Ark Invest bought shares of Meta, Airbnb, and Beam Therapeutics.
Meta has been rallying on the initial success of its Muse agentic AI workload app, but it's still trading lower over the past year.
Airbnb is the only one of the three trading higher over the past year, though its still lower than it was five years ago.
You may have a strong opinion about Cathie Wood, but the aggressive growth investor is used to aggressive opinions. She is relentless in pursuing market opportunities in emerging technologies as the founder and CEO of Ark Invest. She doesn't mind paying a premium for the right companies. She also doesn't mind taking advantage of a markdown to build up her current holdings.
Wood publishes her transactions at the end of every trading day. She did a little buying on Monday, adding to her funds' existing positions in Meta Platforms (NASDAQ: META), Airbnb (NASDAQ: ABNB), and Beam Therapeutics (NASDAQ: BEAM). Let's take a closer look at these three dynamic stocks.
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1. Meta Platforms
Meta is always on the move, even if it looks like it's marching in place sometimes when you zoom out a little. The parent company of Facebook, Instagram, and WhatsApp soared 11% on Monday, its biggest single-day jump in more than a year.
The social media bellwether is on a roll, but don't get too trigger-happy clicking the like button. The stock has soared more than 40% from its summertime low, but Meta stock is still trading 5% lower than it was a year ago.
Meta's Muse app is on a tear since launching just two weeks ago. The free AI app has jumped to the top spot in the App Store's Productivity category, and the initial reviews are glowing. The agentic AI workload app has a 4.9 out of 5 rating, ahead of the 4.7-4.8 ratings of the country's three leading AI platforms (which happen to have the next three slots on the App Store's Productivity group).
The stock is getting noticed. Wells Fargo (NYSE: WFC) raised its price target on Meta from $640 to $796 on Monday, ahead of Meta Connect, scheduled for Wednesday and Thursday this week. With Meta likely to spell out what should be strong early usage stats for Muse, momentum is on Meta's side now. The shares may not seem cheap at 24 times this year's earnings, but Muse has come a long way in just two weeks. This new chapter in the Meta story is just starting to be told.
2. Airbnb
This might seem like an odd time to back a lodging specialist. Travel is becoming more expensive as oil prices rise, making road trips and airline flights more costly. Geopolitical tensions and cross-border spats among politicos are causing international visits to the U.S. to fall for the second year in a row. Specifically regarding the Airbnb model, some neighborhoods, if not entire municipalities, are starting to take a closer look at regulating the short-term property rental marketplace.
Airbnb keeps growing in this less-than-hospitable environment for hospitality. It's on track to post its sixth consecutive year of double-digit revenue growth. The bottom line is growing even faster, making the most of the platform's scalability. Unlike the other two stocks in this article, Airbnb stock is actually trading higher over the past year. It's up 31% from a year earlier, but it's still 24% below the all-time highs it reached in early 2021, shortly after its IPO.
3. Beam Therapeutics
When you invest in biotechs -- or, more specifically, in this case, a gene editing stock -- you live and die by clinical trial data. Investors saw that happen with Beam Therapeutics earlier this month, when it shared fresh data on its BEAM-302 candidate.
BEAM-302's goal is to tackle a serious genetic disease called alpha-1 antitrypsin deficiency, which can damage the liver or lungs. It aims to repair the DNA mutation in vivo with a single IV infusion, rather than a longer treatment that would only address the symptoms.
The stock fell 10% on Sept. 9 -- and almost 20% over three trading days -- after the company announced updated clinical data from the Phase 1/2 trial of BEAM-302. The good news is that the results were encouraging in terms of efficacy. Feedback from the U.S. Food and Drug Administration leaves Beam pursuing an accelerated approval pathway for the treatment. The rub was that the trial results didn't show much numerical improvement, which investors were hoping to see.
This still feels like a good lull for investors. Biotech stocks are generally trading higher this year, but Beam has a 9% decline year-to-date. With clinical success and a pathway potentially opening to get BEAM-302 on the market sooner rather than later, you can't blame Wood for beaming when it comes to Beam.
Wells Fargo is an advertising partner of Motley Fool Money. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Beam Therapeutics, and Meta Platforms. The Motley Fool has a disclosure policy.