Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought
Written by Rick Munarriz for The Motley Fool -> Cathie Wood is trying to get back on track since blowout returns in 2020 that made her one of the most widely followed growth stock investors in the country. It hasn't been easy for the co-founder, CEO, and investor at Ark Invest.
Cathie Wood is trying to get back on track since blowout returns in 2020 that made her one of the most widely followed growth stock investors in the country. It hasn't been easy for the co-founder, CEO, and investor at Ark Invest. Her exchange-traded funds have trailed the market badly in two of the past three years, and she's falling well short in 2024.
Her most popular fund is trading 16% lower year to date, but she's not going down without a fight. She kicked off the new trading week with several portfolio moves on Monday. She added to existing positions in Amazon.com (NASDAQ: AMZN) , Palantir (NYSE: PLTR) , and PagerDuty (NYSE: PD) this week. Let's take a closer look.
The leading online retailer isn't the torrid growth story it was through most of its first two dozen years of public trading. It has posted positive net sales every year since going public in 1997, but the 9% growth it posted in 2022 and the 12% top-line gain it mustered last year are the weakest two years of its 27 years on the market.
Amazon CEO Andy Jassy is trying to make the most of this phase of the e-commerce company 's life cycle. He's improving Amazon's efficiency by cutting costs and trying to find ways to use AI to drive engagement. It's working. Net sales rose a modest 13% in the first quarter of this year, but the bottom line more than tripled .
Amazon is still a beast even in this low-growth environment. It drummed up $48.8 billion in free cash flow over the past four quarters. However, it's not ready to return some of that money to its shareholders in the form of distributions. It's the country largest company by market cap that doesn't currently have a dividend policy in place.
But investors will be fine. They're here for capital appreciation, and the shares are up 47% over the past year.
There are challenges for Amazon to stand out in a more competitive marketplace than in the past. Brick-and-mortar chains are getting better about nailing digital sales. There has also been a surge in popularity of Chinese e-commerce platforms offering ridiculously low prices. Net product sales rose just 7% in the first quarter. It was strength in its Amazon Web Services (AWS) cloud-hosting juggernaut and other services lifting results to double-digit growth.
Amazon is one of Ark Invest's smallest holdings, and that's a shame. The stock is beating the market this year, and it could've helped move the needle if Wood had a larger stake in the popular e-tailer.
