Warren Buffett is getting a run for his money — ARK Invest’s Cathie Wood is turning into the stock picker to watch. And she’s making huge bets on a number of stocks Buffett doesn’t own and can’t match — even in the financial sector.
Three stocks that are top 10 holdings in ARK Invest’s family of ETFs including financial Silvergate Capital (SI), health care Pacific Biosciences of California (PACB) and communications services company Sea (SE), at least tripled the return of Warren Buffett’s best U.S.-listed stock in the past 12 months, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Wood, increasingly nicknamed “Queen Cathie” by traders on Reddit, is turning into the new stock market Oracle. More than 30 of the 45 top 10 holdings in ARK Invest’s five active ETFs in the past 12 months beat the performance of the top U.S.-listed gainer in Buffett’s Berkshire Hathaway portfolio: home improvement retailer RH (RH). RH is up 116.8% in 12 months.
Warren Buffett: Make Room For A New Oracle
Wood is turning into a household name with investors. Hundreds of millions of dollars poured into her family of five ETFs this year. ARK has roughly $60 billion in assets now, says ETF.com.
And stocks Wood is buying for ETFs, including the flagship ARK Innovation (ARKK), routinely soar on the news. Meanwhile, the ETF is up 145% in the past 12 months. Shares of Buffett’s Berkshire Hathaway are down 4.3%.
It’s a salient 12 months to compare performance, too, as the past year put both money managers through a 2020 peak, a brutal pandemic-shock bear and powerful recovery.
“I know a lot of folks are fascinated with Cathie Wood’s ARK Innovation ETF which I figure will be up about 250% over one year by quarter-end,” said Dan Wiener, editor of “The Independent Adviser For Vanguard Investors.”
Cathie Wood Showing Buffett The Future Of Financials
Amazingly, Wood seems to be schooling Buffett in his traditionally favorite sector: Financials.
Two of the three ARK Invest’s holdings topping Buffett’s top U.S.-listed stock are in the ARK Fintech Innovation ETF (ARKF). In fact, while Wood is famous for her long-standing bullishness on Tesla (TSLA), her top-performing stock the past 12 months is Silvergate Capital, a financial. It’s up more than 880% in the past 12 months.
And Silvergate, a bank holding company in La Jolla, Calif., is a 4.3% holding in the ARK’s financial ETF. It’s the fourth largest holding in the ETF. The value of the ARK Fintech Innovation ETF is up more than 125% in 12 months.
Buffett’s top-performing financial stock, on the other hand, is credit card company Synchrony (SYF). But it’s up just 17.1% in the past 12 months. Meanwhile, Buffett’s largest financial position, a $34 billion stake in Bank of America (BAC), is up just 2.3% in 12 months. That’s even underperforming the S&P 500’s 16.6% rise in that time.
And that’s not even mentioning Sea, which is the No. 7 holding in the ARK Fintech Innovation ETF at 3.5% of the portfolio. The company powers digital financial services and e-commerce in Asia and Latin America. And it, too, puts all Buffett’s financial plays to shame. Sea shares are up nearly 400% in a year.
Buffett Can’t Match Wood’s Health Care Winner
Buffett is loading up on some health care names. He added to his positions in health care in late 2020. Specifically, Berkshire upped its holdings in Merck (MRK) by 28% and AbbVie (ABBV) by 20%. But they’re hardly standouts. Merck is down 9.2% in 12 months, while AbbVie is up 14%. Should you buy AbbVie stock now?
Meanwhile, look at Pacific Biosciences of California. Shares of the maker of molecule sequencing equipment are up more than 800% in 12 months. Wood must expect big gains in the future not yet apparent to analysts. Wall St. analysts think the company will lose 96 cents a share in 2021, even more than the 62 cents a share it lost in 2020.
Buffett Vs. Wood: Who Wins In The Future?
Never count out Buffett, though.
The S&P 500 is shifting and cyclical stocks are perking up. This could play into Buffett’s hand. Buffett’s No. 1 U.S.-listed stock that’s traded a full year is a home-goods retailer.
Traditional bank stocks are heating up, too, and bringing value stocks with them. Financials account for a quarter of Buffett’s public holdings portfolio. And consumer discretionary stocks make up 5%.
Meanwhile, some of the darling stocks are cooling off, like Tesla. And Tesla is a top 10 holding in three of ARK Invest’s ETFs. Tesla fell 39.68, or 5.1%, to 741.62 on Monday. Tesla, alone, makes up nearly 9% of ARK Innovation. In contrast, Buffett’s No. 1 financial holding, Bank of America, rose 64 cents Monday, or 1.9%, to 35.16. Should you buy Tesla stock now?
But Buffett, too, is highly exposed to hot technology stocks. He lightened up on Apple (AAPL) stock last year, but it’s still the No. 1 holding in his portfolio by far. Technology is now up to 46% of his portfolio, including winning shares of Snowflake (SNOW), which haven’t traded a full year yet.
And it’s always a bad idea to rule out Buffett. He knows how to last through decades of market cycles, which is something ARK Invest still needs to prove.
Top-Performing ARK Invest Stocks
Biggest gainers among top 10 holdings in ARK’s five active ETFs, past 12 months
|Company||Symbol||Top 10 Holding In ARK ETF||12 Month % Ch.||Sector|
|Pacific Biosciences of California||(PACB)||(ARKG)||793.6%||Health Care|
|Sea Limited||(SE)||(ARKF)||387.9%||Communication Services|
|Grayscale Bitcoin Trust||(GBTC)||(ARKW)||326.8%||Financials|
|Twist Bioscience||(TWST)||(ARKG)||315.2%||Health Care|
Sources: ARK, S&P Global Market Intelligence, ARKF=Fintech Innovation, ARKG=Genomic Revolution, ARKW=Next Generation
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