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These 3 stocks of Cathie Wood are set to tear more than 40% (or more)

Markets lately are a mix of gains and volatility, and it is difficult for investors to understand that at times. In times like these, it makes sense to turn to specialists. Cathie Wood is one of those experts, an investor whose stock options have consistently outperformed markets in general. Protected by the famous economist Arthur Laffer, market guru Wood built his reputation on the basis of his clear view of the markets. His company is Ark Invest, whose Innovation ETF has more than $ 52 billion in assets under management, making him one of the largest institutional investors on the scene. Even better, Wood’s stock choices were rewarded during the ‘corona year’; the overall return of the ETF in 2020 was an impressive 170%. With returns like this, it is clear that Cathie Wood knows what she is talking about when she chooses a stock. So, we are taking a look at three of your stock choices, all of the “top 10” of your company’s stakes, by percentage weight within the portfolio. Using the TipRanks platform, we found that, according to some Street analysts, each has at least 40% upside potential for the next year. Let’s see what’s going on. Teladoc Health, Inc. (TDOC) The first stock on our list, Teladoc, was one of the ‘pioneer’ companies in the telehealth sector, providing remote medical care for non-emergency issues. Patients can use Teladoc to consult about ear, nose and throat issues, laboratory references, basic diagnostics and medical advice, and prescription refills for non-addictive substances. Teladoc charges for its service as offering remote home calls by primary care physicians. Despite the obvious benefits of Teladoc’s service during the pandemic year and steadily rising revenues, the company’s shares underperformed the broader markets in the past 12 months. A look at the most recent quarterly report – from 1Q21 – will shed some light. The company recorded $ 453.6 million in revenue, an impressive 150% year-over-year increase. The gains, however, tell a different story. At $ 199.6 million, the net loss in the first quarter was much greater than the loss of $ 29.6 million in the same period last year. Per share, the loss was $ 1.31, compared to just 40 cents a year earlier. The losses weighed heavily on investors’ minds, but the company’s orientation was more worrying. Management expects that paid membership will remain stable in 2021. Shares fell 10% after the results were released. Cathie Wood, however, started buying shares, taking advantage of the drop in price to increase her holdings in TDOC. His company purchased more than 716,000 shares, worth more than $ 122 million at the time of purchase. Teladoc is Ark’s second holding, representing more than 6% of the fund’s portfolio. Although BTIG analyst David Larsen notes investor concerns, he believes the long-term outlook for the company remains positive. “The issue that can weigh on the stock is that the membership guidance for 2021 of 52-54 million (+ 2% y / y) has remained unchanged,” said Larsen. “Despite this headwind, we still like the company and the actions. Management pointed out that the ‘adherence pipeline’ is now over 50% per year, which is greater than what was reported in 4Q: 20, and many of these businesses are progressing. TDOC also won a major BCBS plan in the Northeast due to the “whole person” model, and is a competitive take-away. We believe that the management’s comments on the membership flow are very calculated and we hope that the membership increase in 2022 will be much better than that of 2021 ”. In line with his comments, Larsen classifies TDOC as a purchase and its target price of $ 300 implies an 83% increase for next year. (To view Larsen’s track record, click here.) Overall, Teladoc achieves a Moderate Purchase from the analyst consensus, a rating derived from 23 reviews including 14 for Buy and 9 for Keep. The shares are quoted at $ 163.21 and have an average target price of $ 243.68, making a robust one-year valuation 49%. (See Teladoc’s stock analysis at TipRanks.) Zoom Video Communications, Inc. (ZM) Next, Zoom, needs no introduction. This technology-based video communications company had a low profile in 2019, but in the corona crisis of 2020, Zoom came of age. The company had a huge expansion, in use and user base, and its stock peaked in November 2020 with a price well above $ 500 per share. Since then, it has fallen – but even after that fall, ZM’s shares still show a 121% one-year gain. The decline in Zoom’s stock price can best be seen as temporary volatility in an otherwise solid stock. Zoom went public in April 2019 and has reported sequential gains and gains in all quarters since then – with gains accelerating last year. For the fourth quarter of fiscal year 2021, the last reported, Zoom reported $ 882.5 million in revenue, an increase of 13.5% sequentially and an astonishing 368% year on year. EPS in the last quarter was 87 cents; this compares to just 5 cents of earnings per share in the previous year. Zoom reported US $ 377.9 million in free cash flow in 4Q21, compared to US $ 26.6 million in the previous year. In customer metrics, Zoom reported similarly strong growth. It had more than 467 thousand customers with more than 10 employees, an increase of about 470% in the annual comparison, and 1,644 customers who paid more than US $ 100,000 in the last 12 months, an increase of 156% in the annual comparison. As for Cathie Wood, she thinks Zoom will continue to grow, saying, “I think it will usurp much of the old telecommunications infrastructure.” Two of Wood’s Ark’s funds own Zoom shares, more than 2.4 million shares in total, Zoom represents about 3.40% of Ark’s portfolio. Merrill Lynch, 5-star analyst Daniel Bartus, also likes ZM shares and writes about the company’s model: “In our opinion, Zoom’s superior video experience has solidified its position as a post-COVID meeting platform. As the pandemic persists and companies adopt more flexible workforces, we believe that 2021 will be another good year for Zoom. After the pandemic, we believe that Zoom remains well positioned as the new communication standard and the upsell of Zoom Phone, Rooms and additional features across the 467,000 customer base outweighs the risk of churn in smaller customers. ”Bartus assigns a buy rating to the shares, with a target price of $ 480 suggesting a 52% upside potential for the coming year. (To view Bartus’ background, click here.) Wall Street’s views on Zoom offer a certain enigma. The analyst’s consensus here is a suspension, based on reviews that include 6 to buy, 10 to retain and 2 to sell. On the other hand, the average price target of $ 444.40 per share implies a 41% upside over the year. (See Zoom’s inventory analysis at TipRanks.) Shopify, Inc. (SHOP) Last on our Wood pick list, Shopify is a Canadian based e-commerce giant that needs no introduction. Shopify has been around for 15 years and was one of the first leaders in providing e-commerce platforms to third parties. The company’s services include payment processing, marketing, shipping and customer engagement. Shopify raised $ 2.93 billion last year and has seen sequential revenue gains in each of the past four quarters. Although the stock found 2021 more than a slog, it still rose 77% in the past 12 months, beating the 47% one-year gain of the S&P 500 handily. As of 2021, Shopify reported revenue growth of 110 % year-over-year in the first quarter, with sales reaching US $ 988.7 million. The company’s first quarter earnings per share, $ 9.94 per share, were inflated by unrealized gains from a capital investment, making comparison difficult, but the company also reported $ 7.87 billion in cash at the end of March, compared to $ 6.39 billion at the end of December. The solid gains in revenues and liquidity are supported by a growing user base. Shopify’s mobile app, Shop, now has more than 107 million registered users, of which 24 million are monthly active users. And the company has good word of mouth publicity; 45,800 of his “partners” referred a fellow merchant to the service in the previous 12 months, an annual gain of 73%. Looking at all of this, Cathie Wood thinks that we may be seeing the beginning of the ‘next Amazon’. She says, referring to the company’s position in the market and its growth prospects, “Shopify doesn’t care who wins. You will be involved with many, if not most, of all the sites that will boost trade. ”Ark funds are devouring shares in SHOP – they have more than 690,000, worth more than $ 754 million in the current valuation. Colin Sebastian, 5-star analyst at Baird, agrees that Shopify is an action to buy. He writes, “We see the highest levels of spending supporting the huge opportunity in the e-commerce market, sustaining a high level of innovation in platform services and maintaining a high level of scalability. As such, we would be stock buyers in any setbacks related to margin comments … We believe that Shopify will continue to be one of the main beneficiaries of the migration to multichannel e-commerce, as companies leverage and integrate a wide range of consumer contact points to boost sales – including traditional offline, online, in-store, furniture, kiosks and call centers. ”Sebastian’s target price here, $ 1,550, suggests an increase of 42% for the next 12 months. Its rating is Outperform (ie a purchase). (To see Sebastian’s track record, click here.) High-profile technology companies tend to attract a lot of attention, and Shopify has received no less than 30 reviews from analysts in the past few weeks. They are divided into 16 purchases, 13 retentions and only a single sale, making the analyst’s consensus a moderate purchase. The shares are quoted at $ 1,092.01, and the average target price of $ 1,482.21 implies that they have room for a 36% gain this year. (See Shopify’s stock analysis at TipRanks.) To find good ideas for stock trading with compelling valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all TipRanks stock insights. Disclaimer: The opinions expressed in this article are exclusively those of the analysts presented. The content should be used for informational purposes only. It is very important to do your own analysis before making any investment.

Paula Fonseca