Cathie Wood Is Selling Tesla and Buying This "Magnificent Seven" Stock Instead
Over the last several years, Cathie Wood of Ark Invest has emerged as one of Wall Street’s most intriguing personalities.
Most portfolio managers emphasize concepts found in textbooks such as valuation multiples or intrinsic value. Wood is different. Ark Invest offers investors access to a host of exchange-traded funds (ETFs), the majority of which are comprised of emerging technology businesses.
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However, to her credit, she balances Ark’s portfolio with some exposure to larger, more established opportunities as well. Among Wood’s blue chip holdings are most of the “Magnificent Seven,” many of which are leading the charge in the artificial intelligence (AI) landscape.
And in that segment of her portfolio, her recent sales of Tesla (NASDAQ: TSLA) and purchases of Amazon (NASDAQ: AMZN) look like a savvy shift.
Generally speaking, portfolio managers do not reveal the precise timing of their trades nor discuss the rationale behind their decisions. Sometimes, hedge fund managers will give interviews on financial news programs and discuss their recent investment moves, but oftentimes these revelations come long after any significant buying or selling was made.
But Wood and the Ark Invest team do things a bit differently. Every evening, Ark Invest sends out an email to its followers that breaks down what stocks the funds bought and sold during that day’s trading session. Moreover, Wood is often featured on CNBC or Yahoo! Finance, and isn’t shy about discussing her high-conviction plays.
For the last two weeks, Wood has consistently been trimming her Tesla position.
|
Category |
Oct. 24 |
Oct. 28 |
Oct. 29 |
Oct. 30 |
Nov. 1 |
Nov. 4 |
Nov. 5 |
Nov. 7 |
|---|---|---|---|---|---|---|---|---|
|
Shares of Tesla sold |
85,500 |
120,000 |
13,900 |
62,200 |
30,600 |
9,900 |
2,300 |
85,000 |
While such consistent sales may give the impression that Wood is running for the hills, there’s more here than meets the eye. Since Tesla reported its third-quarter earnings on Oct. 23, its shares have gained more than 30%.
Wood recently explained during a segment on Yahoo! Finance that she sees now as an appropriate time to take some profits and rebalance the Ark funds. Considering how volatile Tesla stock can be, a sell-off could come out of nowhere.
Throughout the month of October, Wood was taking Tesla profits and reinvesting in its megacap tech cohort, Amazon. Between Oct. 8 and Nov. 7, Ark Invest scooped up over 395,000 shares of Amazon.
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