Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

Cathy Wood has no dimmer switch. The co-founder and CEO of Ark Invest is either fully illuminated or blinded. The highly regarded growth investor has shined in 2020 and 2023, but underperformed in 2021 and 2022, and she's off to a challenging start in 2024.

She didn't stop there. Ark bought on ThursdayRoblox (New York Stock Exchange)Stock Code::RBLX ),Roku (NASDAQ resonance code: ROKU)(math.) andSoFi Technologies (NASDAQ: SOFI)Wood added to her existing position by buying shares of the same stock. Let's take a closer look at the three stocks Wood is now buying.

1. Robot World

Although Roblox has seen its share price rise over the last year, it is still a broken IPO stock. The online game platform developer has found itself trading below its IPO price of $45 three years ago. At the end of 2021, Roblox shares were trading at $141.60, but are now 74% below that high.

But that doesn't mean Roblox isn't growing at the moment. The platform's popularity is growing again after stagnating a year ago, with revenue up 30% in the most recent quarter, driven by a 25% surge in bookings. Revenue grew by 30% in the most recent quarter, driven by a 25% spike in bookings, and Roblox continues to attract users as average daily active users grew by 22% to 71.5 million over the past year, and total aggregate time spent on the platform grew by 21%, in line with the growth trend. Average monthly unique paying users grew by 18%, but this did not affect sales.

Naturally, investors can't take growth for granted, and Roblox, which caters primarily to younger users, will need to continue to ensure that it still resonates with historically fickle users. The company's top-line guidance for 2024 is strong, but the bottom line remains a pressure point.

Roblox expects losses to widen this year. Analysts believe the open platform won't achieve adjusted profitability until 2027. Naturally, a lot can happen in the next three years. It's had a lot of ups and downs in the first three years of trading. Roblox is the eighth largest fund held by Ark.

2. Roku

Roku's stock more than doubled this year, but 2024 is a different story. After a poor financial update and a new competitor, the company's stock has fallen by more than a third this year.

The global center of original streaming media services continues to expand its reach. By the end of last year, it had a record 80 million active accounts, an increase of $141T. Engagement remains strong, but monetization is a stumbling block behind the stock's sizzling 2023 rate. Investors have been blindsided by the successive declines in average revenue per user. One of its much smaller competitors has also agreed to be acquired by the country's largest retailer, making this small player even more important in the coming years.

Wood has been adding to this volatile stock since the start of the sell-off in streaming services. It's her fourth-largest position in Ark.

3. SoFi Technologies

Like Roku, SoFi shares have more than doubled over the last year. 2024 year-to-date, the digital banking and fintech provider is down double digits, just like Roku and Roblox. This is Ark Invest's 30th largest position.

SoFi achieved its first quarterly profit in the most recent quarter. The number of people with SoFi accounts has jumped by 44% over the past year, and SoFi is looking to achieve compound annual revenue growth of 20% to 25% over the next three years. The problem now is that economists believe the Fed won't make the inevitable rate cut until later this year, which could trigger a surge in lending activity, cooling the rebound momentum that fintech stocks enjoyed last year.

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Rick Munarriz has a position in Roku. the Motley Fool has recommended Roblox and Roku. the Motley Fool has a disclosure policy.

Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool.