It’s fair to say that Cathie Wood doesn’t mind when it rains. The Ark Invest co-founder, CEO, and investor isn’t afraid to add to some of her positions when they dip, and she did that a bit of that on Friday.
Wood spent the final trading day of last week actively buying stocks moving lower on a down day for the overall market. She added to her stakes in Roku (NASDAQ: ROKU), Unity Software (NYSE: U), and SoFi Technologies (NASDAQ: SOFI), three stocks that all fell harder than the market. Let’s take a closer look at these three purchases.
1. Roku
One of Wall Street’s biggest sinkers on Friday was Roku. Shares of the company behind the original smart TV operating system plummeted 24% after a sequential dip in average revenue per user. Wood was actively buying more shares of Roku in three of her funds.
Roku’s report was solid on the surface. Revenue growth of 14% exceeded analyst targets as well as its own guidance. Its top-line outlook for the current quarter also compares favorably with Wall Street projections. However, Roku put a damper on the potential bull parade by painting a cloudy picture on the uneven ad recovery. For a business model that relies almost entirely on the connected TV ad market to drive its bottom-line results, that’s a problem.
Image source: Getty Images.
The popularity of Roku, however, isn’t in question. It remains the leading operating system for smart TV connections across North America. It posted double-digit growth in accounts over the past year, and engagement is getting stronger. The average account holder is now spending more than four hours a day streaming on the platform. Given all that, you’d think average revenue per user whould be heading higher, but it’s not.
Roku points out that media and entertainment promotional spending activity is trending lower. With thousands of apps on Roku, that spending activity is a key part of driving average revenue per user higher. The streaming services stock more than doubled last year, but it’s now down by more than a third since hitting a 52-week high in December. Yet Roku remains the fourth…
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