Investing guru Cathie Wood still attracts a large following. Although the founder of the Ark Invest family of exchange-traded funds (ETFs) is trailing the market by a wide margin in 2024. Cathie Wood stocks are also known to trounce the S&P 500 by like amounts, too.
That’s because Wood likes to make big bets on her big ideas. Each year the millionaire investor lays out her thoughts on what she believes will be transformational investments in her “Big Ideas” thesis. Whether it is genomics, precision therapeutics or artificial intelligence, her ETFs typically reflect those concepts.
Naturally, because they represent such paradigm shifts, these investments will take time to grow and become mainstream. Wood sees the opportunity to generate phenomenal returns by buying representative stocks early and watching them evolve. It means some of them will lag until they eventually gain critical mass.
That gives investors an excellent chance to buy Cathie Wood stocks at a discount and see them grow. Patience may be required but the following three companies are top stocks to buy now.
Block (SQ)
Small-merchant point-of-sale (POS) technology leader Block (NYSE:SQ) has long been the industry innovator. Increasingly, the fintech is adding other services to its platform to meet the needs of micro merchants, which are typically ignored by larger financial institutions.
With founder Jack Dorsey once again giving Block its full attention to improve profitability, the business is growing. Revenue and gross payment volume (GPV) grew 11% and 9%, respectively, in the first quarter, though down slightly sequentially. Importantly, the Cash App business remained strong for the period with revenue 23% higher.
Block does face competitive pressures and Fiserv’s (NYSE:FI) Clover platform is outperforming Block in GPV growth. Annualized GPV at Block’s rival is up 17% to $313 billion, according to PYMNTS. Yet Block is committed to shoring up the business and adjusted operating income soared from $51 million last year to $364 million this year.
One area of arguable concern is Dorsey’s obsession with Bitcoin (BTC-USD). He even started off his shareholder’s letter with a question he often receives, “Why the hell are you all spending so much time on Bitcoin?” His belief is that cryptocurrency will become the internet’s native currency and he is poised to pounce. He does note that Bitcoin-related projects account for less than 3% of Block’s total resources.
Wood is a believer and owns 8.1 million shares of Block. Excluding Bitcoin, which will be volatile, Block’s merchant business and Cash App are strong reasons to consider this option in Cathie Wood stocks.
CRISPR Therapeutics (CRSP)
Gene-editing pure-play CRISPR Therapeutics (NASDAQ:CRSP) is the second Cathie Wood stock to consider. It fits neatly into her precision therapies vision for curing disease efficiently and at lower cost.
CRISPR’s proprietary platform allows for precision slicing of DNA to modify genes to treat disease. Called Clustered Regularly Interspaced Short Palindromic Repeats, or CRISPR, it directs programmable enzyme Cas9 to meticulously cleave DNA in virtually any organism.
Its first approved product was developed with Vertex Therapeutics (NASDAQ:VRTX) for the treatment of transfusion-dependent beta-thalassemia (TDT) and sickle cell disease (SCD). It has billion-dollar blockbuster potential.
The gene-editing stock possesses a significant portfolio of therapies in early-stage clinical trials that it will seek to develop and commercialize. Because they are still in the very early stages they are not something to consider at the moment but as they pass through the various trial phases they will become more relevant to its future growth.
Wood owns 7.5 million shares of CRISPR Therapeutics. The biotech’s CRISPR/Cas9 platform will be a powerful tool going forward and buying its stock now gets you in early on what will likely be dramatic growth later.
Trade Desk (TTD)
After having sold off her position in Trade Desk (NASDAQ:TTD) in 2021, Wood began buying fistful’s of the advertising technology platform late last year. She now owns nearly 1.8 million shares. There is good reason to believe this was a smart bet.
Trade Desk is an agnostic platform for advertisers and ad agencies to purchase advertising from publishers and content creators. Because it is independent, unlike larger rivals like Amazon (NASDAQ:AMZN) selling ads for their own verticals, buyers have developed substantial trust for its platform to help them manage their programmatic ad buying. Trade Desk has a 95% customer retention rate.
First-quarter revenue jumped 28% year-over-year to $491 million while adjusted EBITDA surged 48% to $162 million. It has also grown its client list sharply over the past few years. At the end of the quarter, it stood at over 1,100, up 34% from 2020. Revenue per client over that period has risen 127%.
Trade Desk stock is up 28% in 2024 but as digital advertising continues rebounding, its positioning will improve further. It is investing heavily in UID2.0, an encrypted user identifier, that several media companies have adopted. It also has a strong presence in connected television and will enjoy significant benefits from the initiatives.
On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.