Cathie Wood’s latest picks: 2 stocks she just bought
Fund manager Cathie Wood, founder and CEO of ARK Invest, has carved out a reputation for herself as one of Wall Street’s top stock pickers. And this reputation is well deserved. Over the past one, three and five years, ARK’s flagship product Innovation ETFs has crushed the market at large.
Given this impressive track record, savvy investors may want to keep an eye on what Wood is buying and selling. Recently she added shares of Pager (NYSE: PD) and UiPath (NYSE: PATH) at ARK’s flagship ETF. Here’s what you need to know about these tech stocks.
1. Pager service
PagerDuty is the central nervous system of modern business. Its platform sits at the center of a company’s digital ecosystem, collecting data from virtually all systems and devices. Then, by combining those signals with artificial intelligence, PagerDuty helps its customers predict and prevent downtime of critical services and technologies.
For example, the PagerDuty platform captures data from application performance monitoring tools such as Datadog, IT operations centers such as Service now, public clouds such as Microsoft Azure, customer service software such as Salesforce.com, and communication platforms such as Zoom. And when issues are identified, PagerDuty triggers an automatic fix or alerts the right people, helping them quickly resolve incidents like website crashes or system failures.
As a pioneer in this industry, PagerDuty has 12 years of data and more than 14,100 customers, which make the company’s artificial intelligence models more efficient. And as new customers join the platform, PagerDuty’s data repository will continue to grow, further reinforcing this advantage.
Financially, the company has shown solid revenue growth over the past two years. Last 12-month revenue grew from $ 142.7 million in the second quarter of 2020 to $ 244.2 million in the second quarter of 2022, which ended July 31, with a growth rate annual compound (CAGR) of 31%.
Investors should note that PagerDuty is still not profitable on a GAAP basis and the company has generated negative free cash flow of $ 6.4 million in the past 12 months. However, PagerDuty is only in the early stages of growing its business and management believes the company has seized less than 1% of its market opportunities.
Here’s the bottom line: In an increasingly digital world, delivering a high-quality customer experience isn’t an option, it’s a necessity. And PagerDuty capitalizes on this fact, helping customers keep their digital ecosystems up and running at all times. Given Wood’s focus on innovative technologies like artificial intelligence, I’m not surprised to see her adding stocks of this tech stock to ARK’s portfolio.
UiPath’s mission is to bring automation to every business. To this end, its platform combines three cutting-edge technologies – artificial intelligence, low-code development, and robotic process automation – helping customers build, deploy and manage software robots capable of automating various processes. instead of human employees.
To do this, UiPath’s robots rely on several types of artificial intelligence, including computer vision, natural language processing and machine learning. Together, these technologies give robots the ability to read and understand language, mimic human behavior, and make decisions. In turn, this allows them to automate simple and complex tasks, such as reviewing emails, filling out forms, and extracting data from documents.
One of the biggest advantages of UiPath is its ecosystem of partners. The company offers pre-built integrations with hundreds of popular technologies, including Amazon Web Services, Microsoft 365, and Salesforce, which means customers can quickly automate workflows on these platforms.
Due to the breadth of the company’s mission and its value proposition to customers, UiPath has grown its revenue at an impressive rate. Its 12-month revenue increased from $ 451.2 million in the second quarter of 2021 to $ 736.9 million in the second quarter of 2022, which ended July 31, for a CAGR of 63%.
Like PagerDuty, UiPath is currently unprofitable under GAAP and has negative free cash flow. But the company has established itself as the industry leader, according to Forrester Research, and it makes sense to reinforce this advantage by investing aggressively in growth. This is exactly what management is doing.
Here’s the bottom line: Automation boosts efficiency and productivity by freeing up human employees to devote their time to more important tasks, which would benefit virtually every business in the world. And UiPath has the best product on the market. That’s why I’m not surprised to see Wood doubling that tech stock.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.