Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

The aggressive growth fund investor has slowed her shopper this holiday season, but she still made time to build up some of her existing positions.

Even the perpetually moving Cathie Wood takes a step back over the holidays. The co-founder, CEO, and investment manager for Ark Invest has been slowing the pace of her portfolio moves lately. She bought shares of just three stocks on Monday, but they’re still pretty notable.

Wood increased her existing positions in Amazon (AMZN 1.77%), GitLab (GTLB 0.73%), and 10x Genomics (TXG -0.41%) on Monday. Let’s take a closer look at Wood’s latest purchases for Ark Invest’s family of exchange-traded funds.

1. Amazon

On the eve of Christmas Eve, Wood was buying shares of the country’s leading online retailer, even though Amazon isn’t exactly out of favor these days. The shares hit an all-time high last week. The stock’s 48% jump this year is roughly double the market’s year-to-date performance.

It’s an odd time for Amazon to be within a stone’s throw of its highwater mark. Teamsters are expanding their strike at Amazon shipping and fulfillment centers during the company’s busiest times of the year. 

Image source: Getty Images.

At the same time, this will probably be the third year in a row that net sales fall short of 12% growth, and Amazon’s guidance for the holiday quarter that wraps up next week wasn’t ideal. But don’t let the ho-hum top-line gains dissuade you from considering Amazon as a worthy investment. Net sales did climb 11% higher to $158.9 billion in its latest quarter, but the jumps get bigger as we go down the income statement. Amazon’s operating profit and net income, for example, rose 55% in the same quarter.

Meanwhile, the e-tail bellwether is targeting 7% to 11% in net sales growth. Analysts still see net sales rising 11% in 2025 — once again failing to top 12% growth — but once again, that should be on another large increase in profitability.

Wall Street pros aren’t letting the lackluster upticks this year temper their enthusiasm. Ivan Feinseth at Tigress Financial boosted his price target on Amazon shares from $245 to $290 near the end of last week. He sees Amazon continuing to raise the bar as it leans on generative AI to improve its operations and shopper experience. His new price goal represents a 29% gain in the coming year from Monday’s closing price.

2. GitLab

Not every stock on Wood’s shopping list on Monday is rallying this year. Unlike Amazon, GitLab is trading just below where it was when the year began. The provider of a flexible cloud-based platform that helps an organization’s tech team build, test, and deploy software has earned upticks, but they haven’t come this year.

Revenue is slowing at GitLab, but it still clocked in with respectable 31% year-over-year growth in its latest quarter. It has beaten Wall Street profit targets by at least 44% in each of its past five financial reports. Customers are happy, going by the 124% dollar-based net retention rate. In other words, users of its platform are spending 24% more on GitLab than they were a year ago.

The stock is not cheap at nearly 100 times this fiscal year’s earnings. Its forward earnings multiple of 74 isn’t going to wow value investors, either. However, GitLab’s strong growth and engagement deserve better than a stock that is back to where it was a year ago. Wood apparently sees a bargain here.

3. 10x Genomics

The third of the three purchases on Wood’s shopping list to kick off this holiday-abridged trading week is 10x Genomics. The life sciences company aims to give biology researchers the tools to analyze tissue at the individual cell level, but it’s also one of market’s biggest disappointments of 2024.

The stock is trading 74% lower this year. Just two stocks with market caps larger than 10x Genomics’ $2 billion have suffered steeper downticks. Revenue did decline in its latest quarter. Profitability it also several years away. The life sciences specialist was initially eyeing 8% to 12% growth this year. Its latest outlook calls for a 3% decline at the midpoint for all of 2024. But although this is a stock going in the wrong direction, its differentiated platform does offer long-term promise. Wood thinks the time is right to build up her stake in a stock that has surrendered nearly three-quarters of its value this year.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 10x Genomics, Amazon, and GitLab. The Motley Fool has a disclosure policy.

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