These are challenging times for Cathie Wood’s style of investing. The co-founder, CEO, and investor at Ark Invest finds her family of aggressive growth exchange-traded funds losing to the market for the third time in four years in 2024. Can she get back on track? She is certainly not standing still.
Ark Invest made plenty of moves on Tuesday, adding to nine of her existing positions. Roku (NASDAQ: ROKU), Blade Air Mobility (NASDAQ: BLDE), and PagerDuty (NYSE: PD) are some of the names on that shopping list. Let’s take a closer look.
1. Roku
It’s not just Roku’s 81.6 million households that are binge viewing on Roku. Wood has added to her position for four consecutive trading days. Is “binge investing” a thing? Ark Invest now owns more than 9% of Roku’s total shares outstanding.
Like many of the stocks that propelled Wood’s funds to market-thumping returns in 2000 and then again in 2023, Roku was a rock star last year. Shares of the streaming video platform more than doubled. This year has been anything but a welcome rerun. Roku has tumbled 40% in 2024, a laggard that’s buffering in an otherwise buoyant market.
Image source: Getty Images.
Roku is still growing. The number of households leaning on Roku’s operating system to fuel their TV streaming has risen 14% over the past year. Engagement is even better, as the hours streamed in its latest quarter soared 23% in its latest quarter.
There are a couple of things holding Roku back. After a brief profitable run, Roku has now rattled nine consecutive quarterly deficits. It has come through with three straight quarters of positive free cash flow — and nine-figure free cash flow, at that — but investors will applaud the moment that Roku returns to actual profitability.
Another thing holding Roku back is the fear that Walmart entering this space after announcing plans to acquire a small Roku rival could prove disruptive. This isn’t ideal, but it doesn’t seem like a game changer. Regulators have yet to approve the deal, and even if it does clear antitrust hurdles it’s not as if Roku isn’t ready. It’s been battling some of…
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