What do the most successful investors do when their favorite stocks tank? If you’re Cathie Wood, founder, and CEO of ARK Invest, you keep buying more. Shares of life-science equipment manufacturer…
Berkeley Lights (NASDAQ:BLI) took a hit last week, and two ARK Invest ETFs quickly bought more. Wood also bought two genomics stocks that have tanked this year, Personalis (NASDAQ:PSNL) and Invitae (NYSE:NVTA). Read on to see why she’s confident enough about the outlook for these businesses to go against the grain.
Shares of Berkeley Lights have tumbled 74% from their peak last December, but the dramatic losses haven’t scared Wood away from this pioneer of digital cell biology. Last week, Wood added shares of Berkeley Lights to the ARK Genomics ETF multiple times. After a scathing short-seller’s report began pushing Berkeley Lights stock lower on Wednesday, she bought shares of the embattled stock for the flagship ARK Innovation ETF, too.
Berkeley Lights makes expensive laboratory equipment that can sort individual cells onto a semiconductor plate and monitor their reactions to experimental drugs in real time. This stock’s bears argue that recurring revenue from sales of consumable goods suggests clients aren’t using the company’s equipment once it’s installed.
Fortunately for Berkeley Lights investors, recent earnings results don’t jibe with the main thrust of the bear thesis. Recurring revenue has lagged behind direct equipment sales in the past, but it’s catching up fast. In the first half of 2021, recurring revenue soared 54% year over year to $8.3 million. Over the same period, direct platform sales rose just 33% year over year to $22.5 million.
Diagnostics stocks have performed well for Wood’s ETFs in the past, and she seems confident about this relative newcomer to the space. ARK Invest bought more shares of the cancer genomics specialist for the ARK Genomics ETF every day last week.
Shares of Personalis have fallen by more than…
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