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Cathie Wood Watch: Ark Buys a Sagging Health-Care Stock

Renowned investor Cathie Wood, chief executive of Ark Investment Management, did more selling than buying on April 29, including the sale of a personalized-health-care-benefits provider for companies.

All valuations below are as of Friday’s close

On the buying side, Ark Genomic Revolution ETF  (ARKG) – Get ARK Genomic Revolution ETF Report purchased 1,549,803 shares of Seattle health-care-benefits provider Accolade  (ACCD) , valued at $8.6 million.

Accolade stock dropped 50% Friday, after the company said it lost its biggest customer, Comcast  (CMCSA) – Get Comcast Corporation Class A Report. Wood frequently buys stocks after they drop.

Ark Genomic snagged 33,601 shares of biotechnology company Quantum-Si  (QSI)  valued at $147,172.

As for the selling, Ark Fintech Innovation ETF  (ARKF) – Get ARK Fintech Innovation ETF Report unloaded shares of Discovery, a South African insurance and financial services company.

Ark Fintech apparently sold the shares on the Johannesburg Stock Exchange. Discovery has a thinly traded ADR trading in the U.S. under the ticker DCYHY.

Ark Genomic dumped 24,485 shares of Vertex Pharmaceuticals  (VRTX) – Get Vertex Pharmaceuticals Incorporated Report, valued at $6.7 million. 

Ark Fintech sold 100 shares of online loan marketplace LendingClub  (LC) – Get LendingClub Corp Report, valued at $1,525. That eliminated the fund’s position in the stock.

Ark Fintech also unloaded 18,100 shares of Silvergate Capital  (SI) – Get Silvergate Capital Corp. Class A Report, the La Jolla, Calif., bank-holding company, valued at $2.1 million.

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Performance, Inflow

Meanwhile, Wood’s flagship Ark Innovation ETF  (ARKK) – Get ARK Innovation ETF Report has dropped 50% so far this year amid the slump for technology stocks and is down 70% from its February 2021 peak.

Wood has brushed off the declines, saying her investment focus is five years. And indeed, Ark Innovation has outperformed the S&P 500 over the past five years. 

As of April 29, the ETF had an annualized total return of 15.5% during that period, compared with 13.7% for the S&P 500, according to Morningstar.

Investors apparently haven’t given up on Wood. Ark Innovation saw an investment inflow of $790 million year to date as of April 29, according to Bloomberg.

Morningstar’s View

On March 29, Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation.

“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.

“Since its meteoric rise in 2020, the strategy has been one of the worst-performing U.S.-sold funds.… Wood’s reliance on her instincts to construct the portfolio is a liability.”

Wood countered Greengold’s points in a recent interview with Magnifi Media by Tifin. “I do know there are companies like that one [Morningstar] that do not understand what we’re doing,” she said.

“We do not fit into their style boxes. And I think style boxes will become a thing of the past, as technology blurs the lines between and among sectors.”

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