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Cathie Wood is Dumping These 15 Stocks

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·12 min read
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In this article, we discuss the 15 stocks Cathie Wood is dumping. If you want to skip our detailed analysis of these stocks, go directly to Cathie Wood is Dumping These 5 Stocks.

The portfolio value of ARK Investment Management, the New York-based hedge fund managed by Cathie Wood, has increased from over $50 billion at the end of the first quarter of 2021 to more than $53 billion at the end of the second quarter, according to the latest 13F filings. Wood, who has had a mixed year so far after posting a record one last year - her fund posted a 740% gain in 2020, growing from $3 billion in value to over $34 billion. The top ten holdings of the fund presently account for 35% of the portfolio.

Wood has made new purchases in 18 stocks, acquired additional stakes in 111 equities, and reduced holdings in 154 stocks between March and June this year. The fund has assets of more than 280 clients under management. Wood has a net worth of more than $250 million and pioneers an investment strategy that places a focus on “disruptive innovation” that has earned the ire of many top Wall Street experts in recent weeks, including legendary short-seller Michael Burry, who has a multi-million dollar short position on the flagship ARK Innovation ETF.

Some of the top holdings in the investment portfolio of ARK Investment Management at the end of the second quarter of 2021 were Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), among others. Over the years, the success of Wood has been a stand-out in the hedge fund universe that is broadly struggling amid tech-related pressures and the rise of fintech and crypto that are transforming society and finance.

Cathie Wood is Dumping These 15 Stocks
Cathie Wood is Dumping These 15 Stocks

Cathie Wood of ARK Investment Management

The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.

Our Methodology

With this context in mind, here is our list of the 15 stocks that Cathie Wood is dumping. These were ranked according to the investment portfolio of ARK Investment Management at the end of the second quarter of 2021.

Only those stocks were selected that the hedge fund sold off entirely in the second quarter of 2021.

The analyst ratings of each company are also discussed to provide readers with some more context about their investment decisions.

The hedge fund sentiment around each stock was gauged using the data of 873 hedge funds tracked by Insider Monkey. The stocks are arranged according to the number of hedge fund holders in each company.

Cathie Wood is Dumping These Stocks

15. Workhorse Group Inc. (NASDAQ: WKHS)

Number of Hedge Fund Holders: 13

Workhorse Group Inc. (NASDAQ: WKHS) is an Ohio-based technology company that makes and sells battery electric vehicles and aircraft. It is placed fifteenth on our list of 15 stocks that Cathie Wood is dumping.

On July 29, investment advisory B Riley maintained a Buy rating on Workhorse Group Inc. (NASDAQ: WKHS) stock with a price target of $16, noting that the appointment of a new CEO at the firm was a “nice fit”.

At the end of the second quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $60 million in Workhorse Group Inc. (NASDAQ: WKHS), down from 16 in the preceding quarter worth $96 million.

14. Syros Pharmaceuticals, Inc. (NASDAQ: SYRS)

Number of Hedge Fund Holders: 17

Syros Pharmaceuticals, Inc. (NASDAQ: SYRS) is ranked fourteenth on our list of 15 stocks that Cathie Wood is dumping. The firm makes and sells biopharma products for cancer treatment and operates from Cambridge.

On May 6, investment advisory Piper Sandler maintained an Overweight rating on Syros Pharmaceuticals, Inc. (NASDAQ: SYRS) stock with a price target of $18, underlining that the pullback in the share price was a buying opportunity for investors.

Out of the hedge funds being tracked by Insider Monkey, California-based investment firm Samsara BioCapital is a leading shareholder in Syros Pharmaceuticals, Inc. (NASDAQ: SYRS) with 2.1 million shares worth more than $10.5 million.

13. Agora, Inc. (NASDAQ: API)

Number of Hedge Fund Holders: 17

Agora, Inc. (NASDAQ: API) is placed thirteenth on our list of 15 stocks that Cathie Wood is dumping. The firm markets real-time engagement software services for business clients and is headquartered in China.

On May 19, investment advisory Macquarie kept an Outperform rating on Agora, Inc. (NASDAQ: API) stock but lowered the price target to $60 from $80, citing lower comp valuations in the ratings update issued by John Wang.

At the end of the second quarter of 2021, 17 hedge funds in the database of Insider Monkey held stakes worth $564 million in Agora, Inc. (NASDAQ: API), the same as in the preceding quarter worth $739 million.

12. Virgin Galactic Holdings, Inc. (NYSE: SPCE)

Number of Hedge Fund Holders: 18

Virgin Galactic Holdings, Inc. (NYSE: SPCE) is a New Mexico-based integrated aerospace and human spaceflight company. It is ranked twelfth on our list of 15 stocks that Cathie Wood is dumping.

On August 31, investment advisory Jefferies initiated coverage of Virgin Galactic Holdings, Inc. (NYSE: SPCE) stock with a Buy rating and a price target of $33. Greg Konrad, an analyst at the firm, issued the ratings update.

Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Virgin Galactic Holdings, Inc. (NYSE: SPCE) with 4.5 million shares worth more than $209 million.

11. Fastly, Inc. (NYSE: FSLY)

Number of Hedge Fund Holders: 24

Fastly, Inc. (NYSE: FSLY) is a California-based company that owns and manages a cloud platform for customer management. It is placed eleventh on our list of 15 stocks that Cathie Wood is dumping.

On August 9, investment advisory Raymond James initiated coverage of Fastly, Inc. (NYSE: FSLY) stock with a Market Perform rating, noting that updated guidance numbers indicated a slowed return to growth.

At the end of the second quarter of 2021, 24 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Fastly, Inc. (NYSE: FSLY), down from 26 in the preceding quarter worth $1.3 billion.

Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Fastly, Inc. (NYSE: FSLY) is one of the stocks Cathie Wood has been selling.

10. Guidewire Software, Inc. (NYSE: GWRE)

Number of Hedge Fund Holders: 27

Guidewire Software, Inc. (NYSE: GWRE) is ranked tenth on our list of 15 stocks that Cathie Wood is dumping. The company provides software products for the insurance industry and is headquartered in California.

On September 3, investment advisory JPMorgan maintained an Overweight rating on Guidewire Software, Inc. (NYSE: GWRE) stock and raised the price target to $160 from $145, noting that the firm had posted a big quarter for cloud activity.

At the end of the second quarter of 2021, 27 hedge funds in the database of Insider Monkey held stakes worth $1.8 billion in Guidewire Software, Inc. (NYSE: GWRE), down from 33 the preceding quarter worth $1.5 billion.

In its Q1 2021 investor letter, Wasatch Global Investors, an asset management firm, highlighted a few stocks and Guidewire Software, Inc. (NYSE: GWRE) was one of them. Here is what the fund said:

“Guidewire Software, Inc. (GWRE) was another large detractor. The company provides enterprise software for the property and casualty insurance industry. The software supports collaborative workflow, cooperation with external partners and rule-based decision making—all of which characterize modern underwriting and claims operations. Guidewire’s InsuranceSuite platform allows insurance-industry customers to manage claims, policies and billing functions. Other modules can be added to assist in data management, analytics and digital engagement. We believe Guidewire will eventually be well-positioned to benefit as insurance companies increasingly replace their core (usually on-premises) legacy software with centralized, cloud-based offerings. In the shortterm, however, Guidewire has seen some challenges with its move to the cloud. We think these challenges, along with the broad correction among technology names, accounted for the stock-price decline.”

9. Lightspeed Commerce Inc. (NYSE: LSPD)

Number of Hedge Fund Holders: 29

Lightspeed Commerce Inc. (NYSE: LSPD) is placed ninth on our list of 15 stocks that Cathie Wood is dumping. The company provides ecommerce solutions for small and mid-sized businesses across the world.

On August 6, investment advisory BMO Capital maintained an Outperform rating on Lightspeed Commerce Inc. (NYSE: LSPD) stock and raised the price target to C$110 from C$100. Thanos Moschopoulos, an analyst at the firm, issued the ratings update.

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Echo Street Capital Management is a leading shareholder in Lightspeed Commerce Inc. (NYSE: LSPD) with 1.7 million shares worth more than $145 million.

8. MarketAxess Holdings Inc. (NASDAQ: MKTX)

Number of Hedge Fund Holders: 31

MarketAxess Holdings Inc. (NASDAQ: MKTX) is a New York-based firm that owns and operates an electronic trading platform. It is ranked eighth on our list of 15 stocks that Cathie Wood is dumping.

On July 22, investment advisory Deutsche Bank reiterated a Hold rating on MarketAxess Holdings Inc. (NASDAQ: MKTX) stock and lowered the price target to $427 from $430. The ratings update was issued following mixed quarterly results posted by the firm.

At the end of the second quarter of 2021, 31 hedge funds in the database of Insider Monkey held stakes worth $605 million in MarketAxess Holdings Inc. (NASDAQ: MKTX), down from 34 in the previous quarter worth $672 million.

In its Q2 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and MarketAxess Holdings Inc. (NASDAQ: MKTX) was one of them. Here is what the fund said:

“MarketAxess Holdings Inc. operates the leading electronic platform for corporate bond trading. Shares fell because of a slowdown in bond trading activity, particularly against last year’s pandemic-driven spike. Market conditions were unfavorable as a result of lower volatility and narrower credit spreads. MarketAxess continued to increase its market share, but its share gains are typically more modest during periods of low market volatility. We continue to believe that MarketAxess will be the prime beneficiary of an ongoing secular shift to electronic trading in the corporate bond market.”

7. Interactive Brokers Group, Inc. (NASDAQ: IBKR)

Number of Hedge Fund Holders: 36

Interactive Brokers Group, Inc. (NASDAQ: IBKR) is a Connecticut-based automated electronic broker. It is placed seventh on our list of 15 stocks that Cathie Wood is dumping.

In April, investment advisory Credit Suisse reiterated an Outperform rating on Interactive Brokers Group, Inc. (NASDAQ: IBKR) stock and raised the price target to $110 from $92, noting the firm would continue to benefit from increasing global footprint.

At the end of the second quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes worth $1.48 billion in Interactive Brokers Group, Inc. (NASDAQ: IBKR), up from 31 in the previous quarter worth $1.45 billion.

Unlike Tesla, Inc. (NASDAQ: TSLA), Twitter, Inc. (NYSE: TWTR), Square, Inc. (NYSE: SQ), Roku, Inc. (NASDAQ: ROKU), and Shopify Inc. (NYSE: SHOP), Brokers Group, Inc. (NASDAQ: IBKR) is one of the stocks Cathie Wood has been removing from her portfolio.

6. Verisk Analytics, Inc. (NASDAQ: VRSK)

Number of Hedge Fund Holders: 36

Verisk Analytics, Inc. (NASDAQ: VRSK) is ranked sixth on our list of 15 stocks that Cathie Wood is dumping. The company markets data analytics solutions for business clients and is headquartered in New Jersey.

On August 9, investment advisory Raymond James maintained an Outperform rating on Verisk Analytics, Inc. (NASDAQ: VRSK) stock and raised the price target to $210 from $190, appreciating the second quarter earnings beat of the firm.

At the end of the second quarter of 2021, 36 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Verisk Analytics, Inc. (NASDAQ: VRSK), up from 34 in the preceding quarter worth $1.5 billion.

In its Q1 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Verisk Analytics, Inc. (NASDAQ: VRSK) was one of them. Here is what the fund said:

“We ended our campaign in Verisk Analytics. Verisk Analytics is a data analytics provider to customers in insurance, energy markets and financial services. While the company’s core insurance business (~70% of revenue) remains on solid fundamental footing, we expect energy and financial services acquisitions made in recent years—an effort to diversify its business mix—to weigh on profit growth. We believe this will be further amplified as COVID cost savings reverse in 2021 and as the company invests in new products. With better growth opportunities in our pipeline, we exited our position.”

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Disclosure. None. Cathie Wood is Dumping These 15 Stocks is originally published on Insider Monkey.