Cathie Wood is one of the most-respected money managers on Wall Street. She’s the co-founder, CEO and Chief Investment Officer of ARK Investment Management, an investment management firm. Over the years, she has guided her clients’ portfolios to significant returns. She has a knack for picking compelling ideas for her exchange-traded funds, making Cathie Wood stocks an enticing proposition.
One of the biggest advantages of betting alongside the Street’s top experts comes from the concept of riding coattails. Unless you’re a professional investor, you probably don’t have time to monitor the market constantly. From what I can tell, Ark Invest has 50 employees. This figure includes a team of analysts pouring over charts, financials, breaking news items, whatever.
That’s a lot of manhours condensed into one idea. So, when the matriarch of Wall Street signals that a particular company is a buy, that assessment didn’t materialize randomly. No, there was serious thought put into the idea. On that note, below are enticing Cathie Wood stocks to consider.
Robinhood (HOOD)
Technically falling under the capital markets space, Robinhood (NASDAQ:HOOD) represents one of the most popular financial technology (fintech) companies. During the Covid-19 crisis, plenty of people exercised their inner Gordon Gekko. Usually, their foray into the equities sector occurred via Robinhood’s trading app. Still, HOOD is an awkward idea for Cathie Wood stocks because she trimmed her position in the first quarter.
From a pricing dynamic point of view, I understand Wood’s position here. In the past five sessions, HOOD stock gained over 8% of equity value. In the trailing month, it’s up almost 11%. And in the year-to-date frameworks, shares just about doubled. It’s smart to take some profits off the table. Still, I believe Robinhood has more room to run.
During the past four quarters, the company impressed with an average earnings per share of 4 cents. The collective consensus view called for a loss of 2 cents per share. Therefore, the underlying performance yielded an earnings surprise of 252.5%.
Even better, analysts project that EPS could hit 53 cents this year, well above last year’s loss of 61 cents. And revenue could shoot up 31.3% to $2.45 billion. It’s one of the Cathie Wood stocks to buy even if Cathie Wood is selling it.
Palantir (PLTR)
A popular but controversial big data analytics specialist, Palantir (NYSE:PLTR) has really been on a strong run. In the past 30 days, PLTR stock gained almost 15%. Since the beginning of this year, shares have rocketed up 73%. It’s not shock, then, that the tech firm ranks among the Cathie Wood stocks and legitimately so. In Q1, she increased her exposure by 16.5%.
That might give confidence to Palantir, particularly for prospective investors who are still unsure about the idea. Right now, Wall Street analysts peg shares a consensus hold. What’s more, their average price target sits at $22.55, implying more than 21% downside risk from Tuesday’s close. Even uglier, the most pessimistic expert calls for a price target of only $9.
However, Palantir is proving itself to investors by inking deals that establish its credibility as an analytics expert. Further, its financials are improving, going from a net-loss entity to one that posted $210 million in net income last year.
Analysts expect the company to continue marching ahead, with fiscal 2024 EPS projected to hit 33 cents, up 32%. Also, revenue could reach $2.7 billion. If so, that would imply a growth rate of 21.3%, making PLTR one of the Cathie Wood stocks to buy.
Roku (ROKU)
An intriguing and speculative idea among Cathie Wood stocks, Roku (NASDAQ:ROKU) operates a television streaming platform. The company breaks down into two main units called Platform and Devices. For the former unit, the underlying streaming service allows users to find and access various desired programming. The latter unit focuses on the sales of streaming players.
Fundamentally, Roku presents a risky narrative because streaming players face a relevancy issue. With smart TVs, the function that a separate system provides has become integrated with the TV itself. Still, Wood increased her exposure to ROKU stock by 31.8% in Q1. It’s difficult to dismiss such confidence.
Financially, Roku posted an average loss per share of $1 in the past four quarters. That’s not great but it was an improvement over the projected loss of $1.13. Therefore, the “earnings” surprise came out to 16.65%. What could be enticing, though, is the valuation. ROKU stock trades at 2.54X trailing-year sales. In the past year, the metric averaged about 3.06X.
For fiscal 2024, analysts anticipate 11.9% growth in the top line to $3.9 billion. Fiscal 2025 could see another 12.1% increase to $4.37 billion.
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.