As a rule of thumb, you want to make market decisions based on a wide range of assessments and not just on the recommendation of a popular investor. That said, if you had to trade with a particular individual, you can do a lot worse than so-called Cathie Wood stocks.
An entrepreneur and a tech visionary, Wood is considered a star stock picker. She’s the founder of ARK Invest, which features around $60 billion worth of assets. Part of the reason for considering the ideas she supports is longevity. Wood has been in the business for a long time. She knows how to navigate various market cycles.
In addition, Wall Street professionals have access to information and resources that average retail investors simply lack. By latching onto Cathie Wood stocks, any market participant can effectively leverage this informational/resource advantage. On that note, below are compelling ideas from Wood’s portfolio to consider.
Palantir (PLTR)
Predictably, big data analytics specialist Palantir (NYSE:PLTR) suffered alongside other tech firms in the market rout on Monday. PLTR stock also suffered heavily in the past five sessions. However, in the afterhours session on Monday, shares gained over 12% of equity value. That’s because the company delivered a robust second-quarter earnings report. In addition, it posted strong guidance, thus encouraging onlookers.
Heading into Tuesday’s open, PLTR stock traded at 24.19X trailing-year sales. That’s a hot premium no matter how you look at it. Further, the past year’s average metric landed at 18.77X. Nevertheless, it’s looking increasingly likely that Palantir will enjoy a standout year in fiscal 2024. On average, analysts believe that the top line will clock in at $2.7 billion, up 21.3% from last year.
However, the high-side estimate stands at $2.8 billion. That seems reasonable, if not understated. Assuming a shares outstanding count of 2.13 billion, PLTR stock trades at 18.33X projected revenue. It’s still not undervalued per se. However, this is one of the Cathie Wood stocks that looks legit.
Shopify (SHOP)
E-commerce giant Shopify (NYSE:SHOP) represents one of the Cathie Wood stocks in which the investor added to her position: ARK Invest increased its stake in SHOP stock by 8.1% in Q2. Fundamentally, the company makes for a great investment due to the popularity of e-commerce. Online transactions have represented a greater share of total retail sales since Q2 2022.
If the trend continues northward, SHOP stock would seem an ideal opportunity. Still, the equity suffered a beatdown in recent sessions. On Monday, it lost 4%. In the trailing week, it slipped almost 13%. And for the month, it’s down over 22%. I’m not the biggest fan of catching a falling knife. Still, Wood’s bullishness on this idea offers prospective investors confidence.
Currently, SHOP stock trades at 9.13X sales. That’s a discount relative to the prior year’s average of 13.53X. Also, during Q4 of last year, the multiple averaged nearly 15X. Enticingly, analysts believe that by the end of fiscal 2024, revenue could land at $11.86 billion. If so, that’s up 22.9% from last year’s tally of $9.65 billion.
That would mean the multiple is even more attractive on a forward basis. So, SHOP is easily one of the Cathie Wood stocks to consider.
Intellia Therapeutics (NTLA)
Operating in the biotechnology space, Intellia Therapeutics (NASDAQ:NTLA) specializes in genome editing, focusing on curative therapeutics. At the moment, it’s spotlighting its research on finding engineered cell therapies to treat various cancers and autoimmune diseases. ARK Invest increased its stake in NTLA stock by 5.5% in Q2.
To be sure, Intellia is about to release its Q2 earnings report shortly. Therefore, conservative investors may want to wait until after the results before moving in. So far, though, the results are relatively encouraging. In the past year since Q1, Intellia posted a loss per share of $1.34. That was better than the expected loss of $1.41, yielding a positive surprise of 5%.
As for the valuation, NTLA stock trades at 38.47X sales. That’s sky high. However, in the past year, the metric stood at 57.66X. In that sense, I suppose one could make the argument that contextually, NTLA may be considered undervalued.
Interestingly, analysts expect fiscal 2024 sales to hit $70.78 million. If so, that would be up 95.1% from last year. Also, the high-side estimate stands at $131 million. It’s one of the Cathie Wood stocks to keep on your radar.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.