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10 Favorite Stocks of Cathie Wood and Ken Fisher

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·14 min read
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  • MELI
  • PFE
  • SHOP
  • JD
  • SQ
  • GOOGL
  • PYPL
  • AMZN

In this article, we discuss the 10 favorite stocks of Cathie Wood and Ken Fisher. If you want to skip our detailed analysis of these stocks, go directly to the 5 Favorite Stocks of Cathie Wood and Ken Fisher.

Cathie Wood and Ken Fisher are seasoned American investors, and are commonly known for their thriving hedge funds, namely ARK Investment Management and Fisher Asset Management.

Cathie Wood is the founder, chief executive officer, and chief investment officer of ARK Investment Management. She holds a Bachelor’s degree in finance and economics from the University of Southern California, and started her career with the Capital Group as an assistant economist in 1977. She switched to Jennison Associates, a New York-based asset management firm in 1980, and worked there for 18 years across multiple roles, including chief economist, analyst, portfolio manager, and managing director.

In 1998, Wood co-founded a hedge fund in New York with Lulu C. Wang, named Tupelo Capital Management. She joined AllianceBernstein in 2001, and remained with the firm for 12 years as the chief investment officer of global thematic strategies. She left AllianceBernstein in 2014 and founded ARK Investment Management, after the firm deemed one of the ideas for an ETF based on disruptive innovation too risky.

At ARK Investment Management, Wood focuses her investments on companies offering disruptive technology, including artificial intelligence, DNA sequencing, CRISPR gene editing, robotics, electric vehicles, energy storage, fintech, 3D printing, cryptocurrency, and blockchain technology.

Ken Fisher is an American investor, a billionaire hedge fund manager, and the founder and chairman of Fisher Asset Management, where his portfolio is valued at almost $161 billion according to the Q3 13F filings. Fisher Asset Management offers a tailored investment approach to portfolio management, financial planning, retirement planning, and annuity conversion. Fisher follows a top-down approach while selecting securities, and the firm’s investment philosophy is rooted in the fundamental beliefs in capitalism and the functionality of free capital markets. Fisher Asset Management’s Q3 portfolio is focused on investments in the information technology, healthcare, finance, consumer discretionary, and communications sector.

Some of the favorite common stocks from Cathie Wood and Ken Fisher’s Q3 portfolios include Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB), among others discussed in detail below.

Our Methodology

We used the Q3 investment portfolios of Cathie Wood and Ken Fisher to select their mutual stocks, ensuring that both hedge fund managers had a substantial stake in the companies. To give readers more context about each stock, we have mentioned the Q3 earnings and analyst ratings.

The list is ranked according to the hedge fund sentiment around each stock, which was gauged out of a total of 867 funds from the third quarter database of Insider Monkey.

Favorite Stocks of Cathie Wood and Ken Fisher

10. JD.com, Inc. (NASDAQ:JD)

Ken Fisher’s Stake Value: $520,441,000

Cathie Wood’s Stake Value: $173,350,000

Number of Hedge Fund Holders: 66

JD.com, Inc. (NASDAQ:JD), a Chinese B2B e-commerce company from Beijing, is one of the favorite stocks of Ken Fisher and Cathie Wood from the third quarter. It was reported on November 11 by Bloomberg that JD.com, Inc. (NASDAQ:JD) saw a "record" 349.1 billion yuan in accumulated orders on Singles' Day.

JD.com, Inc. (NASDAQ:JD), on November 18, announced its Q3 earnings. EPS for the quarter equaled $0.49, beating estimates by $0.18. The third quarter revenue amounted to $34.25 billion, up 29.44% year-over-year, outperforming estimates by $709.63 million.

After the strong Q3 results despite macro headwinds and supply chain challenges, Benchmark analyst Fawne Jiang on November 19 raised the price target on JD.com, Inc. (NASDAQ:JD) to $117 from $102 and kept a Buy rating on the shares. The analyst stated that JD.com, Inc. (NASDAQ:JD) is positioned to benefit from its unique value proposition, and will continue to maintain market share.

Chase Coleman’s Tiger Global Management is the leading JD.com, Inc. (NASDAQ:JD) stakeholder from the third quarter, holding 51.1 million shares worth over $3.6 billion. Overall, 66 funds in the elite database of Insider Monkey were bullish on JD.com, Inc. (NASDAQ:JD), with total stakes amounting to more than $9 billion.

In addition to Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB), JD.com, Inc. (NASDAQ:JD) is one of the top favorite stocks of Cathie Wood and Ken Fisher.

Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:

“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”

9. MercadoLibre, Inc. (NASDAQ:MELI)

Ken Fisher’s Stake Value: $368,752,000

Cathie Wood’s Stake Value: $159,085,000

Number of Hedge Fund Holders: 68

MercadoLibre, Inc. (NASDAQ:MELI) is an Argentine company operating online marketplaces, offering online auctions and e-commerce to Latin American markets. It was reported on November 22 that MercadoLibre, Inc. (NASDAQ:MELI)’s digital payments app MercadoPago will soon allow customers in Brazil to be able to buy, sell and hold cryptocurrencies using their digital wallets. MercadoLibre, Inc. (NASDAQ:MELI), on November 16, announced the pricing of an underwritten public offering of 1,000,000 common shares at a price of $1,550 per share, with Morgan Stanley, JPMorgan, and Goldman Sachs acting as joint book running managers for the offering.

MercadoLibre, Inc. (NASDAQ:MELI) announced its Q3 results on November 4, posting an EPS of $1.92, beating estimates by $0.61. The quarter revenue totaled $1.86 billion, jumping 66.48% from the prior-year quarter, yet missing estimates by $27.79 million.

After the solid Q3 results, Barclays analyst Trevor Young raised the price target on MercadoLibre, Inc. (NASDAQ:MELI) on November 5 to $2,200 from $2,100 and kept an Overweight rating on the shares. He stated that the company is doing well on all fronts.

Of the 68 funds that were bullish on MercadoLibre, Inc. (NASDAQ:MELI) in the third quarter, Alkeon Capital Management is the leading stakeholder of the company with 445,136 shares worth $747.5 million.

Here is what Polen Capital has to say about MercadoLibre, Inc. (NASDAQ:MELI) in its Q2 2021 investor letter:

“Argentina-based MercadoLibre operates Latin America’s leading ecommerce website and digital wallet. Both e-commerce and consumer finance are underpenetrated among the nearly 400 million citizens living in the company’s three largest markets: Brazil, Argentina, and Mexico.

MercadoLibre’s digitally native solution gives more than 70 million users an easy access point for both online shopping and a digital wallet.

From humble beginnings as a third-party marketplace, MercadoLibre’s management built the business over the last twenty years by steadily expanding the platform’s reach with new services to suit both merchants and consumers. Today’s offerings include financing capabilities for buyers and sellers, logistics, loyalty programs, classifieds listings, and grocery items. We think MercadoLibre can compound earnings at a 25% rate for the next five years.”

8. Shopify Inc. (NYSE:SHOP)

Ken Fisher’s Stake Value: $28,024,000

Cathie Wood’s Stake Value: $1,250,853,000

Number of Hedge Fund Holders: 73

Shopify Inc. (NYSE:SHOP), one of the favorite stocks of Cathie Wood and Ken Fisher, is a Canadian multinational ecommerce platform for online businesses and retail point-of-sale systems. After the Black Friday and Cyber Monday sales, Shopify Inc. (NYSE:SHOP) reported that sales volume increased by 23% as compared to last year, and a $6.3 billion revenue was generated.

On October 28, Shopify Inc. (NYSE:SHOP) posted its Q3 results. EPS in the period totaled $0.81, missing estimates by -$0.41. The $1.12 billion revenue gained 46.43% year-over-year, but missed estimates by $22.29 million.

Loop Capital analyst Anthony Chukumba on November 15 downgraded Shopify Inc. (NYSE:SHOP) to Hold from Buy with an unchanged $1,600 price target. He stated that the company remains one of his top stocks in the ecommerce sector, but it is currently trading at 34.1 times his 2022 revenue estimates for the firm.

Ken Fisher and Cathie Wood are fans of growth stocks like Shopify Inc. (NYSE:SHOP), in addition to Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB).

Stephen Mandel’s Lone Pine Capital is the leading Shopify Inc. (NYSE:SHOP) stakeholder in Q3 2021, with 1.43 million shares valued at $1.93 billion. Overall, 73 funds from the database of Insider Monkey’s 867 elite hedge funds were long Shopify Inc. (NYSE:SHOP) in the third quarter, down from 85 funds in the preceding quarter.

ClearBridge Investments mentioned Shopify Inc. (NYSE:SHOP) in its Q2 2021 investor letter. Here is what they said:

“Shopify (is one of the) companies that have become go-to platforms for small and medium size businesses (SMBs) engaged in e-commerce and social media marketing, rebounded strongly in the quarter after being caught in the selloff among high-multiple growth names since Vaccine Monday. These and the portfolio’s other disruptors had thrived through the first part of the pandemic, leading us to trim positions into strength and reallocate cash into more attractively priced evolving opportunities and steady compounders that had been overly punished by lockdowns and a drop in economic activity.”

7. Pfizer Inc. (NYSE:PFE)

Ken Fisher’s Stake Value: $105,129,000

Cathie Wood’s Stake Value: $95,382,000

Number of Hedge Fund Holders: 74

Pfizer Inc. (NYSE:PFE) is one of the leading multinational pharmaceutical and biotech companies from New York that exploded in popularity during 2020, when Pfizer Inc. (NYSE:PFE) vaccines for the COVID-19 pandemic were approved worldwide as one of the best vaccines for international travel and strong immunity. Pfizer Inc. (NYSE:PFE) recently reported that the current version of the vaccine will be sufficient for protection against the COVID-19 Omicron variant.

Pfizer Inc. (NYSE:PFE) reported its Q3 results on November 2, posting an EPS of $1.34, beating estimates by $0.25. The quarterly revenue equaled $24.09 billion, gaining 98.62% year-over-year, exceeding estimates by $1.28 billion.

On November 29, JPMorgan analyst Chris Schott raised the price target on Pfizer Inc. (NYSE:PFE) to $53 from $42 and kept a Neutral rating on the shares. The analyst states that he sees limited upside from Pfizer Inc. (NYSE:PFE)’s core business of internal medicine and clinical trials for immunology, oncology, inflammation, and rare diseases. However, it would not be surprising to see the shares rally in the near-term on Omicron headlines.

Ric Dillon’s Diamond Hill Capital is the leading Pfizer Inc. (NYSE:PFE) stakeholder out of the 74 hedge funds that were bullish on the stock in the third quarter, holding 10.6 million shares valued at $457.8 million.

Here is what ClearBridge Investments has to say about Pfizer Inc. (NYSE:PFE) in its Q1 2021 investor letter:

“Our underweights in health care and staples contributed to relative performance during the period. As we continue to focus the portfolio on high-conviction ideas, we sold Pfizer in late 2020, in the health care sector.”

6. Square, Inc. (NYSE:SQ)

Ken Fisher’s Stake Value: $363,697,000

Cathie Wood’s Stake Value: $1,467,937,000

Number of Hedge Fund Holders: 98

Square, Inc. (NYSE:SQ) is a financial services and digital payments company from California that offers point of sale terminals, a cash app, auxiliary equipment, and debit cards to customers. Ken Fisher holds a $363.6 million stake in Square, Inc. (NYSE:SQ) and Cathie Wood owns a position worth $1.46 billion in the company, making Square, Inc. (NYSE:SQ) a favorite stock of the hedge fund managers from the third quarter.

Square, Inc. (NYSE:SQ) posted its Q3 results on November 4, announcing a $0.37 EPS, missing estimates by -$0.01. The quarterly revenue equaled $3.84 billion, also missing analysts’ consensus estimates by almost $650 million. BofA analyst Jason Kupferberg upgraded Square, Inc. (NYSE:SQ) to Neutral from Underperform with a price target of $221, up from $210 on November 30.

Cathie Wood’s ARK Investment Management purchased 281,400 shares of Square, Inc. (NYSE:SQ) on December 2, making her total stake in the company amount to 6.12 million shares worth $1.46 billion. Of the 98 hedge funds that were bullish on Square, Inc. (NYSE:SQ) in the third quarter, ARK Investment Management is the leading stakeholder of the company.

It was revealed on December 1 that Square, Inc. (NYSE:SQ) is planning to undergo a corporate rebranding, changing the company’s name to Block, since the Square name has become synonymous with the company's Seller business, which offers an integrated ecosystem of commerce solutions, business software, and banking services for sellers, and this rebranding will allow the company to own the Square brand, rather than be recognized solely for one of its business divisions.

In addition to Alphabet Inc. (NASDAQ:GOOG), PayPal Holdings, Inc. (NASDAQ:PYPL), Amazon.com, Inc. (NASDAQ:AMZN), and Meta Platforms, Inc. (NASDAQ:FB), Square, Inc. (NYSE:SQ) is one of the top favorite stocks of Cathie Wood and Ken Fisher.

Here is what RiverPark Large Growth Fund has to say about Square, Inc. (NYSE:SQ) in their Q1 2021 investor letter:

“We established a position in leading Financial Technology provider Square during the quarter. Through one integrated system, SQ is a hybrid of two businesses: its Seller Business (charging small and medium-sized businesses about 3% for transaction payment processing, plus other services such as instant funds access, and software for everything from customer engagement to payroll), and its Cash App (originally for person-to-person cash transfers and now a growing digital financial services provider for consumers).

The combined business has grown gross profit at a 37% CAGR over the past five years to $2.7 billion (due to pass through costs, gross profit is more reflective of top-line growth) and we believe that the company has an enormous long-term runway, as it has less than a 2% share of a more than $160 billion market. It is our view that the company’s Cash App (which has grown from nothing in 2015 to $1.2 billion gross profit last year) has a particularly large opportunity with its powerful ecosystem of digital financial services including digital wallets, direct deposits, stock trading, bitcoin trading, and business and tax services, which are all relatively new. The vast majority of Cash App’s more than 36 million users are younger and, importantly, are willing to replace their bank and other financial services accounts with the app.

We estimate that the company can grow its gross profit more than 30% and EBITDA more than 50% annually for the foreseeable future, and while most of the company’s current profit is from its Seller Business, we believe most of Square’s future value will be from its Cash App business.”

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Disclosure: None. 10 Favorite Stocks of Cathie Wood and Ken Fisher is originally published on Insider Monkey.