Stock picker and hedge manager Cathie Wood made some serious waves last year, when her ARK Innovation ETF outperformed the S&P 500 by an order of magnitude. From the pandemic trough in March to the end of 2020, the S&P gained 68%, while Wood’s flagship fund surged ahead by 153%. It was an astounding performance.
Wood made smart choices last year, targeting tech companies, remote connections, and telehealth for investment. All of those segments saw big gains in business during the lockdown phases of the pandemic response, but have slipped back as we’ve shifted more toward ‘normal.’
Looking ahead, as 2021 fades into 2022, and the ongoing corona crisis continues to evolve, Wood is focusing more and more on innovation. “Our primary message is that innovation solves problems and is expected to transform human lives at an accelerated rate during the next five to ten years,” she says – outlining the basic case for buying into the innovators, and making a prescription for stock investing as a long-term proposition.
“After correcting for nearly 11 months, innovation stocks seem to have entered deep value territory, their valuations a fraction of peak levels,” Wood added.
With this in mind, we wanted to take a closer look at three innovation stocks that Wood’s ARK Investment Management picked up recently. Running the tickers through TipRanks’ database, we learned that each one boasts a “Strong Buy” consensus rating from the analyst community. In fact, the analysts see these stocks gaining 60% or better in the year ahead, a return that would definitely point ARK in the right direction.
TuSimple Holdings (TSP)
The first ‘Wood-pick’ we’ll look at is TuSimple, an AI company neck-deep in the autonomous vehicle niche. TuSimple is developing technology optimized for autonomous trucking, and important segment in the future automotive industry. Autonomous trucking promises greater efficiencies and improved safety for long-haul routes, and TuSimple is working on AI tech to meet those needs. The company’s chief product, under development, is a LiDAR sensor system to allow perception in all weathers up to 1000 meters from the vehicle.
TuSimple went public earlier this year, one of many companies that took advantage of the market’s general upward trend to raise capital. The IPO brought in over $1.08 billion in gross capital. While the stock has been volatile since then, TSP still boasts a market cap exceeding $6.9 billion.
Last month, the company released its 3Q21 earnings, its third such report as a public company. While it does not yet have a regular revenue stream based on a production-level platform, the company did report meeting some important milestones. It expanded a partnership with the delivery company UPS, and reported logging over 160,000 cumulative autonomous miles in test vehicles. The program with UPS also…
Read More: Cathie Wood Pours Money Into 3 “Strong Buy” Innovation Stocks