“We’re all about finding the next big thing.”-Cathie Wood
As the Founder, CEO, and CIO of ARK Investment Management, Cathie Wood has posted one of the most impressive track records on Wall Street - taking all 5 of her actively managed ETFs and producing monstrous returns for investors last year.
In fact, out of all the funds, the worst performing ARK Autonomous Technology & Robotics ETF (ARKQ) returned a whopping 106.73%, while the top performing ARK Genomic Revolution ETF (ARKG) returned a stunning 180.51% in 2020.
You see, ARK’s strategy is to capture long-term growth and capital appreciation created by disruptive innovations.
The company’s ETFs are built around companies in some of the most promising and exciting areas of the economy - like next generation internet, DNA sequencing, automation, energy storage, and blockchain technology, just to name a few.
But this doesn’t mean they necessarily invest in the so-called “leaders” of each emerging technology.
In fact, the funds invest across sectors, geographies, and market caps, seeking to identify companies missed by traditional sector-based strategies.
In other words, while you’ll often hear that Cathie Wood is a huge Tesla bull, there are numerous other companies that she’s loading up on that may not be talked about at all.
In this article, we profile 3 of ARK Invest’s top conviction stocks that are still relatively unheard of at the moment. They are:
Let’s dive in.
Formerly known as Trimble Navigation Limited, Trimble Inc. provides location-based solutions that are used in global positioning systems (GPS), laser, optical, and inertial technologies. The company produces a wide range of specialized hardware and software products including 3D laser scanning, flow and application control systems, monitoring systems, water management, navigation infrastructure, Global Navigation Satellite System (GNSS) receivers, scanners, laser rangefinders, unmanned aerial vehicles (UAVs), inertial navigation systems, and software processing tools.
With these products, Trimble serves a wide array of industries including agriculture, construction, forestry, geospatial, government, military and defense, oil & gas, rail, transportation, and utilities.
TRMB is the largest holding in the ARK Space Exploration And Innovation ETF (ARKX) and the second largest holding in the ARK Autonomous Technology & Robotics ETF (ARKQ).
While there are a number of medical genetics stocks you can buy today, Invitae is probably one of the most exciting.
The company is in the molecular diagnostics space and its mission is to bring comprehensive genetic information into mainstream medicine by aggregating the world's genetic tests into a single service with higher quality, faster turnaround time, and lower prices. Invitae’s genetic tests include multiple genes associated with hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders, metabolic disorders and other hereditary conditions.
Cathie Wood recently went on CNBC to single out Invitae as one of the most underappreciated stocks in her ETFs at the moment. She pointed to the investments that the company was making into next generation testing as one of the most misunderstood aspects about the business.
Invitae is held in ARK’s Innovation ETF (ARKK) and their ARK Genomic Revolution ETF (ARKG).
Silvergate Capital is a bank holding company but with one key distinction - they operate in the cryptocurrency space.
You see, Silvergate was early to the game. Recognizing digital currency’s potential during the sector’s infancy, the company built relationships with pioneers who were turned away by traditional banks. It now runs the Silvergate Exchange Network which allows "institutional investors to move U.S. dollars to digital currency exchanges and trading partners (like institutional investors) 24/7 in real time at no extra cost."
The volume on this network has an annual run-rate of nearly a quarter trillion dollars and it’s growing fast. The company has even been called “The go-to bank for the cryptocurrency industry.” Silvergate is held in the ARK Fintech Innovation ETF (ARKF) and the ARK Next Generation Internet ETF (ARKW).