Analyzing 13Fs: ARK Funding Administration (Cathie Wooden) This fall 2022 Replace (NYSEARCA:ARKK)

In at this time’s article, we deliver you the most recent replace in our recurring sequence primarily based on analyzing 13F filings and the most recent strikes of a few of the world’s most famed funds and asset managers. Our authentic article on the matter and the principle thesis behind it may be accessed by this hyperlink.

Quarterly Overview

Cathie Wooden and her ARK Innovation fund have simply turned their backs on their worst yr because the inception of the investing agency. Their US-based property discovered themselves strapped to the working room’s surgical procedure desk for the higher a part of the fourth quarter because the market continued to systematically dissect any leftover enthusiasm within the development and know-how areas. Her flagship fund, the Ark Innovation ETF (NYSEARCA:ARKK), closed the yr down over 60% in 2022, as rising curiosity charges and a hawkish FED crushed most development shares. The results of that is that reported property declined even additional to solely $11.2 billion, in comparison with the $14.3 billion that was reported within the final quarter.

It’s value mentioning once more that Cathie Wooden oversaw the administration of greater than $50 billion in property somewhat greater than a yr in the past, representing a big outflow of capital. The fourth quarter noticed ARK Funding Administration open simply 4 new positions whereas increasing 52 of their already present positions. On the opposite finish, the agency closed 4 positions whereas trimming its place in 134 holdings. The ARK fund’s holdings focus has been a well-stated truth for a very long time, as their high 10 holdings remained at a really excessive 45% of the AUM.

By the tip of the fourth quarter, the funds had solely 4 outsized holdings, every taking on greater than 5% of AUM, as Tesla (TSLA) obtained quietly changed by Precise Sciences (EXAS). The opposite two are Zoom Video Communications (ZM) and Sq. (SQ), taking on 6.4% and 5% of the portfolio, respectively. Cathie Wooden has no points with buying vital possession stakes in excessive conviction price investments, which has led to a 5% or extra possession in 38 firms.

Some examples are Ginkgo Bioworks Holdings (DNA), Intellia Therapeutics (NTLA), and Teladoc Well being (TDOC), amongst others, considerably reflecting her “innovation-oriented” investing model. Apart from her flagship fund, Cathie Wooden oversees the administration of those funds by a number of lesser-known exchange-traded funds, together with ARK Subsequent Era Web (ARKW), ARK Fintech Innovation (ARKF), ARK Autonomous Tech (ARKQ), and ARK Genomic Revolution (ARKG).

New Positions

Prime Medication (PRME): represents the most important addition for the reporting interval. ARK Funding Administration bought 1,639,984 shares of the gene modifying startup between $14 and $22. The agency had its IPO in October of final yr. This quantities to a 1.74% possession stake within the firm however takes up solely 0.27% of the funds AUM. Not like most different IPOs, the corporate nonetheless trades roughly within the vary of its providing value, at the moment being bought at round $17.62 per share.

ARK Funding Administration additionally acquired minor stakes in iShares Russell 1000 Development ETF (IWF), Vanguard Development Index Fund ETF (VUG), and 3iQ CoinShares Bitcoin ETF (BTCQF).

Expanded Positions

Tesla (TSLA): it’s virtually unimaginable to debate Cathie Wooden with out at the least touching with reference to her favourite inventory. After virtually six consecutive quarters of reducing items of their TSLA place, ARK pivoted and entered right into a shopping for spree within the fourth quarter final yr. As the value stored breaking 52-week lows, Cathie used the chance to purchase 544,555 shares, increasing her Tesla place by 13% from the prior 13F submitting. She appears to be on the right aspect of this commerce, provided that the corporate’s inventory has virtually doubled in value year-to-date. Shares of TSLA commerce as soon as once more across the $200 vary.

Coinbase International (COIN): after reducing their publicity to COIN by virtually 13% within the third quarter, ARK had a change of coronary heart and used the fourth quarter to increase their place by roughly 19%. The shares had been purchased wherever within the $32-$78 vary because of the shares risky quarter. That is technically nonetheless a internet lower when it comes to absolute numbers, however the latter shares had been probably purchased for nearly one-half of the value of these within the final quarter. Coinbase was value near $80 billion on the finish of 2021, regardless of famously having no bodily headquarters on the time. COIN at the moment trades at round $60 per share.

Ginkgo Bioworks Holdings: they’ve added as soon as extra to the place they’ve been increase since Q3 of 2021. The place was elevated by 13%, having added 17,565,211 extra shares this quarter. They probably paid between $1.5 and $3.5 a share. As talked about earlier than, ARK holds one of many largest stakes within the firm at greater than 13%. The corporate was buying and selling within the mid-double digits again once they first began shopping for shares. Ginkgo is now buying and selling on the again finish of that spectrum at round $1.66 per share.

Verve Therapeutics Inc (VERV): is one other closely beaten-down inventory that trades for roughly one-half of final yr’s value. Despite the fact that ARK initially entered the place within the $30-$75 vary, they’ve used the current decline to decrease their common value. They added 971,971 shares, rising their place by virtually 29%. Verve has grown to turn into the twenty sixth largest holding inside the agency. The corporate is now buying and selling at round $19.18 per share.

Different notable positions that ARK elevated had been Twilio (TWLO), Schrodinger (SDGR), DraftKings (DKNG), Roku (ROKU), CareDx (CDNA), and Cerus (CERS).

Diminished Positions

Precise Sciences: ARK disposed of 1,521,212 shares of EXAS in the course of the quarter, trimming again the dimensions of their largest holding. The place decreased by 8%. The agency nonetheless holds a significant 9% possession stake within the firm. The agency is at the moment promoting for $64.79 per share.

Zoom Video Communications (ZM): remained the second largest holding of the fund, with Cathie Wooden’s ARK holding a 4.22% stake within the firm. ARK bought some 270,000 of ZM, trimming their publicity by 2.5%. They’ve owned the inventory because the fourth quarter of 2020, and the place has since grown to take up greater than 6% of the portfolio, in comparison with final quarter when the corporate solely took up 5.5%. Shares of ZM are at the moment buying and selling for $73.04 per share.

Block (SQ): is without doubt one of the portfolio’s oldest positions, having been constructed up since 2016, when the corporate was buying and selling for lower than $10 per share. This quarter noticed ARK lower its publicity by 2%, disposing of 188,489 shares within the course of. Not like the earlier two firms, the agency owns “solely” barely greater than 2% of the excellent shares, however it nonetheless constitutes ARK’s fourth largest holding. SQ at the moment trades at round $72.61 per share.

Teladoc Well being (TDOC): is one other main portfolio holding that was skimmed within the fourth quarter. The agency disposed of 1,929,862 shares reducing its place by 9%. The place itself is value round half a billion {dollars} given at this time’s costs and ARK owns 11% of the corporate. Shares of Teladoc can as soon as once more be purchased at round $29.

ARK Funding Administration additionally lower its stakes in UiPath (PATH), Shopify (SHOP), Intellia Therapeutics (NTLA), Beam Therapeutics (BEAM), CRISPR Therapeutics (CRSP), Unity Software program (U), PagerDuty (PD), and Robinhood Markets (HOOD), amongst others, much less notable trimmings.

Closed Positions

Signify Well being (SGFY) is probably going probably the most fascinating place that was fully closed out within the fourth quarter. SGFY introduced that the healthcare large CVS Well being (CVS) will purchase it in a deal valued at $8 billion, paying $30.50 per share. Merger arbitrageurs pumped the value close to sufficient to the deal value for Cathie Wooden to shut her personal place, locking in some truthful good points. Signify at the moment sells for $28.72 per share.

Zymergen was equally closed out because it was taken over by the beforehand mentioned Ginkgo. Cathie additionally bought out of IronSource Ltd, Hyperfine (HYPR), in addition to Alleima AB (OTC:SAMHF), amongst different, much less notable positions.

Remaining Overview

Tech shares simply bid farewell to an especially tough and unsure investing yr that noticed many traders’ favourite tech picks lose as much as three-quarters of their market cap. Cathie Wooden and her ARK funds felt virtually the complete ache of this course of, provided that the overwhelming majority of her investments had been primarily based inside the sector. Nevertheless, nonetheless undeterred by the market selloff, Cathie discovered room within the fourth quarter to double down on her “disruptive innovation” and development shares, predicting that deflationary tendencies will proceed properly into subsequent yr. In spite of everything, the agency can nonetheless boast its annualized return of simply shy of 10% since its inception again in 2014. Cathie Wooden firmly believes that she is utilizing the strain as a possibility to reconstruct her portfolio and lean extra on her “highest conviction performs” whereas being assured that after the financial hardship introduced on by rising inflation and the Federal Reserve’s price hikes, her fund will as soon as once more beat the market.

Editor’s Be aware: This text discusses a number of securities that don’t commerce on a significant U.S. trade. Please concentrate on the dangers related to these shares.