With the stock market selling off in 2022, growth funds have felt a lot of pressure. But no single firm or fund manager has been placed in the spotlight more than Cathie Wood. She famously put a massive price target on electric vehicle company Tesla. In 2020, she voiced her optimism on Musk’s TSLA stock, saying it would reach $7,000 per share in the next five years.
At the time, shares of Tesla were trading around $730 on a pre-split basis. Fast-forward to last year’s fourth quarter, and the EV stock had reached a post-split record high of $1,243.49. That’s roughly $6,217.45 on a pre-split basis. Was Wood that far off from her outlook? Since there’s still time, will the $7,000 target be reached before 2025?
Even in light of growth stocks selling off, retail traders have still followed some of what ARK Invest is up to in 2022. So what about penny stocks?
Believe it or not, among Wood’s portfolio of investment funds, ARK has built positions in several stocks under $5. Today we look at some of these names, which ARK funds hold them, and just how much Cathie Wood is betting on penny stocks right now. I’ll leave the final decision up to you whether these are the best penny stocks to buy or not.
Penny Stocks To Buy [or avoid]
- Joby Aviation Inc. (NYSE: JOBY)
- Compugen (NASDAQ: CGEN)
- Nano Dimension (NASDAQ: NNDM)
- Skillz Inc. (NYSE: SKLZ)
- Surface Oncology (NASDAQ: SURF)
- Quantum-Si (NASDAQ: QSI)
- Archer Aviation Inc. (NYSE: ACHR)
Cathie Wood Penny Stocks to Buy 1. Joby Aviation Inc. (NYSE: JOBY)
Shares of Joby Aviation have been high-flying this week. Thanks to excitement in the EV space and a general appetite for growth recently, the electric aircraft company’s stock has popped after news.
Joby’s flagship 5-seat aircraft can take off and land vertically. This is useful since the company is targeting more of a taxi-like industry. Aerial ridesharing has now become a thing. Its aircraft have a 150-mile range and can reach top speeds of 200 mph. Users can access the service via the Joby app or the Uber app in core U.S. markets.
This week, Joby and SKT Telecom inked a deal to introduce emissions-free aerial ridesharing services to South Korea. “By joining forces with Joby, a global leader in this field, we expect to accelerate our journey towards the era of Urban Air Mobility and lead the way on introducing this exciting new technology,” said Ryu Young-sang, CEO of SKT.
Cathie Wood’s ARK Space Exploration & Innovation ETF (NYSE: ARKX) has a position in JOBY stock as of today’s date. According to documents on the ARKX site, JOBY makes up 1.21% of the ETF, equating to a position of just over 1 million shares.
2. Compugen (NASDAQ: CGEN)
Another one of the “Cathie Wood penny stocks” on this list is Compugen. The company specializes in predictive target discovery finding new drug targets, and developing therapeutics for immunotherapy applications. Its lead candidate is COM701, being studied as a potential treatment for solid tumors. It also has COM902, which is under development for treating solid and hematological tumors. Both are in early phase studies, and the company has license agreements with companies like Bayer and AstraZeneca.
Next week could be an important one if you’ve got CGEN stock on your watch list. On February 16th, the company presents at the SVB Leerink Global Healthcare Conference. This presentation comes just a few weeks after Compugen was awarded a US Patent covering the method of use for COM701 in triple combination use with anti-PD-1 and Anti-TGIT antibodies.
Cathie Wood’s ARK Innovation ETF (NYSE: ARKK) and ARK Genomic Revolution ETF (NYSE: ARKG) have positions in CGEN stock as of today’s date. According to documents on the ETFs’ sites, CGEN makes up 0.14% of the ARKK ETF equating to a position of just over 5.5 million shares. CGEN stock makes up 0.26% of the ARKG ETF equating to a position of roughly 3.27 million shares.
3. Nano Dimension (NASDAQ: NNDM)
Nano Dimension is another one of the penny stocks in multiple Cathie Wood ETFs. The company specializes in technology printing, for lack of a better term. Its DragonFly IV system, for example, allows users to actually print proprietary conductive substances and integrate things like capacitors and antennas along with other electromechanical components to produce high-performance electronic devices. These are used in autonomous vehicles, drones, satellites, smartphones, and even medical devices.
The company recently reported preliminary Q4 and full-year 2021 revenues. Both were substantially higher than the previous year’s results. Fourth-quarter revenues are expected to come in at $7 million, up 255%, and full-year figures are closer to $10 million, up 194%. Next month the company presents at the InPrint Munich conference. Nano Dimension’s Global Inkjet Systems division will give an overview of its latest print application capabilities. If NNDM stock is on your watch list, keep March 15-17th in mind as this is when the conference is happening.
Cathie Wood’s ARK Autonomous Tech & Robotics ETF (NYSE: ARKQ) and ARK Next Generation Internet ETF (NYSE: ARKW) have positions in NNDM stock as of today’s date. According to documents on the ETFs’ sites, NNDM makes up 1.83% of the ARKQ ETF, equating to a position of just over 7.7 million shares. NNDM stock makes up 1.18% of the ARKW ETF, equating to a position of roughly 7.96 million shares.
4. Skillz Inc. (NYSE: SKLZ)
If you’ve followed the growth of esports and online gaming, then you might know a bit about Skillz Inc. The company offers a mobile games platform hosting casual esports competitions and tournaments. But with a slowdown in high-tech momentum as far as the stock market is concerned, it’s been less fun and games for SKLZ stock.
Recently, however, shares have mounted a bit of a comeback. This was after it announced plans for its next earnings report. The company will officially show its performance for the last quarter, toward the end of February. So if SKLZ stock is on your watch list right now, keep February 23rd in mind. In advance of these results, analysts seem to have grown more bullish. Citigroup recently reinstated its Skillz outlook with a Buy rating and a $9 price target.
Cathie Wood’s ARK Next Generation Internet ETF has a smaller position in SKLZ stock as of today’s date. According to documents on the ARKW site, SKLZ makes up 0.02% of the ETF, equating to a position of roughly 96,801 shares.
5. Surface Oncology (NASDAQ: SURF)
Though a lower volume penny stock compared to some of the names on this list, Surface Oncology has also caught the eye of Cathie Wood’s investment funds.
The company has a pipeline of treatment candidates targeting tumor microenvironments to achieve sustained anti-tumor responses in patients. It also has collaborative partnerships with the likes of Novartis (NZV930) and GlaxoSmithKline (GSK4381562, which is the exclusive license of Surf’s SRF813).
Cathie Wood’s ARK Genomic Revolution ETF has a position in SURF stock as of today’s date. According to documents on the ARKG site, SURF makes up 0.48% of the ETF, equating to a position of 5.465 million shares.
6. Quantum-Si (NASDAQ: QSI)
Quantum-Si is another life sciences company on this list of penny stocks Cathie Wood’s funds have a position in. It focuses on developing protein sequencing platforms. Its suite of technologies is based on its semiconductor chip created to allow for digitized proteomics research in drug discovery and diagnostics.
Earlier this year, Quantum-Si established its list prices for the end-to-end protein sequencing platforms expected for pre-order placement in the first half of this year. These included its PlatinumTM Single Molecule Analyzer and CarbonTM automated sample preparation instrument. In response, John Stark, Chief Executive Officer of Quantum-Si, explained that “The Company entered a tremendous growth phase in 2021 enabled by the capital raised taking the company public with expansion of the team across all areas of the Company…We look forward to discussing our progress and building upon our strong momentum as we continue our commercialization path in 2022.”
With earnings coming on February 28th, the market has a near-term date to keep in mind. Meanwhile, Cathie Wood’s ARK Genomic Revolution ETF has already established a position. As of today, the firm shows 11.585 million shares held, which equates to 1.26% of the ETF’s weighting.
7. Archer Aviation Inc. (NYSE: ACHR)
Rounding out this list of Cathie Wood penny stocks is Archer Aviation. The beaten-down name reached fresh 52-week lows at the end of January. Like Joby, Archer focuses on air mobility and has designed its own electric vertical takeoff and landing aircraft. The company came into the spotlight amid allegations of a civil case with Wisk and specific trade secret allegations against Archer.
Last year, Wisk filed a federal lawsuit, which accused Archer of patent infringement and trade-secret misappropriation. The allegations included “brazen theft” of “intellectual property and confidential information” related to a prototype electric vertical takeoff and landing aircraft of Wisk’s. Archer has denied any wrongdoing, but the concern hasn’t helped ACHR stock. Earlier this month, Archer announced that the U.S. Attorney’s Office decided not to bring charges against Archer’s employee and not to continue the investigation.
Archer’s Chief Legal Officer, Andy Missan, said, “We believe the U.S. Attorney’s decision strikes at the very heart of Wisk’s trade secret allegations against Archer and reinforces what we have said all along: that Boeing’s joint venture, Wisk, misused the judicial and criminal justice systems for the sole purpose of stifling innovation. We find these kinds of anti-competitive tactics by big business deeply disturbing.”
Cathie Wood’s ARK Autonomous Tech & Robotics ETF currently has a position in ACHR stock as of today’s date. According to documents on the ARKQ site, ACHR makes up 1.60% of the ETF, equating to a position of just over 8.3 million shares.
Cathie Wood’s Investing Approach: Ark On Steroids
In an interview with CNBC, Wood seemingly upped the ante on her bullish market outlook. She explained that her firm is “testing out a portfolio, but it’s really Ark on steroids.”
“We think the benchmarks are where the big risks are long term, because they are filling up with value traps — those companies that have done very well historically but are going to be disintermediated and disrupted by the massive amount of innovation that’s taking place.”
Though this methodology could be more volatile, according to Wood, she expects that in 5 years, the world “will look nothing like it does today, and we’re invested in all the disruptors, the winners, that are going to disrupt the traditional world order.”
Like penny stocks with insider trading, investment fund purchases can bring their own type of sentiment. The important thing to keep in mind is that different investors buy different stocks for specific reasons. Based on this, it’s always vital to do further research and determine if penny stocks are right for you no matter if people like Cathie Wood are buying them.
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