Cathie Wood is one of the most influential institutional investors today. The founder and CEO of the investment management company ARK Invest gained popularity after her firm had a breakout year in 2020. The ETF firm grew to $34.5 billion in assets under management at the end of 2020 from $3.1 billion in 2019, and five of the firm’s six ETFs, including its flagship fund, ARK Innovation ETF (ARKK), have gained in triple-digits over last year.
Wood, who believes in investing in companies that can potentially be disruptive innovators in their fields and sustain long-term growth, recently stated that her stocks seem to be in the ‘deep-value’ category and should generate hefty returns over the next five years. ARKK has gained 6.9% over the past five days, outperforming the broader SPDR S&P 500 ETF Trust’s (SPY) 1.7% gains over the same period.
Hence, we think the stocks of Regeneron Pharmaceuticals, Inc. (REGN), Vertex Pharmaceuticals Incorporated (VRTX), and Trimble Inc. (TRMB), in which Cathie Wood has invested, might be solid bets on their dips.
Regeneron Pharmaceuticals, Inc. (REGN)
REGN operates as a biotechnology company that provides medicines for treating myriad diseases like eye diseases, inflammatory and hematologic conditions, and infectious diseases like Ebola and COVID-19. REGN has a 0.14% weighting and is ranked #96 across all funds of ARK Invest.
On December 13, REGN and pharmaceutical company Sanofi (SNY) announced detailed positive Phase 3 results for Dupixent® (dupilumab) in greatly reducing itch in infants and children between the ages of six months and five years. These results will form the basis of regulatory submissions in the United States this year and in the United Kingdom in early 2022. And the treatment might add to the company’s revenue stream in the future.
On November 12, the company declared a share repurchase program of up to $3 million of its outstanding common stock. The program is expected to become a part of a broader capital allocation strategy and facilitate investment opportunities.
For its fiscal third quarter, ended September 30, REGN’s revenues increased 50.5% year-over-year to $3.45 billion. Its income from operations rose 75.4% from the prior-year quarter to $1.85 billion. Its non-GAAP net income and non-GAAP net income per share improved 84.4% and 83.9%, respectively, to $1.77 billion and $15.37.
A $18.47 consensus EPS estimate for the current quarter (ending December 2021) indicates a 93.8% year-over-year increase. And the $4.34 billion consensus revenue estimate for the current quarter reflects a 79% rise from the prior-year quarter. Furthermore, REGN has an impressive surprise earnings history; it has topped consensus EPS estimates in each of the trailing four quarters.
The stock has gained 26% in price over the past year but declined 2.3% over the past five days to close yesterday’s trading session at $617.48. It is currently trading 10.1% below its 52-week high of $686.62.
REGN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
REGN has a Value and Sentiment grade of A and a Growth and Quality grade of B. In the 469-stock Biotech industry, it is ranked #5.
Click here to see the additional POWR Ratings for REGN (Momentum and Stability).
Vertex Pharmaceuticals Incorporated (VRTX)
Boston-based VRTX develops and commercializes therapies for treating cystic fibrosis, a condition that causes persistent lung infections. The company’s offerings include SYMDEKO/SYMKEVI, ORKAMBI, and KALYDECO therapies for treating patients with the disease. VRTX has a weighting of 0.71% and is ranked #35 across all the funds of Ark Invest
On December 1, VRTX announced positive Phase 2 proof-of-concept (POC) results from its study of VX-147. Based on these results, the company plans to advance the treatment into pivotal development in APOL-1 kidney disease in the first quarter of 2022.
On November 19, the company announced the Spanish government’s approval for national reimbursement of KAFTRIO® (ivacaftor/tezacaftor/elexacaftor) in a combination regimen for treating cystic fibrosis in patients aged 12 years and older. This should prove to be profitable for VRTX.
VRTX’s non-GAAP total revenues increased 29.2% year-over-year to $1.98 billion in its fiscal third quarter, ended September 30. Its non-GAAP net income and non-GAAP net income per common share came in at $925.76 million and $3.56, respectively, up 32.8% and 34.8% from the prior-year quarter. Its non-GAAP operating income rose 39.1% from the same period last year to $1.19 billion.
Analysts expect VRTX’s EPS to increase 31.5% year-over-year to $3.30 in the current quarter (ending December 2021). The Street expects its revenue to improve 23.2% from the prior-year quarter to $2.01 billion in the current quarter. In addition, VRTX has topped consensus EPS estimates in three out of the trailing four quarters.
VRTX’s shares have gained 22.7% in price over the past month to close yesterday’s trading session at $222.77. It has gained 1.9% intra-day. The stock is currently trading 8.3% below its 52-week high of $242.99.
It is no surprise that VRTX has an overall A rating, which translates to Strong Buy in our POWR Rating system.
VRTX has an A grade for Quality and a B grade for Growth, Value, and Sentiment. It is ranked #2 in the Biotech industry.
To see the additional POWR Ratings for Momentum and Stability for VRTX, click here.
Trimble Inc. (TRMB)
TRMB, which is headquartered in Sunnyvale, Calif., empowers field mobile workers and professionals to transform and improve their work processes. The company operates worldwide through three segments: Buildings and Infrastructure; Geospatial Resources and Utilities; and Transportation. TRMB is ranked #23 across all funds of ARK Invest and has a 1.22% weighting.
On December 21, TRMB announced that the French railway authority, SNCF Réseau, selected its software to serve as the central system within its Enterprise Common Data Environment (CDE) for Building Information Modeling (BIM) models for the next three years. The integration of TRMB’s software is expected to enable planners and construction teams to share workflows and streamline data flows.
On December 15, TRMB announced that it has acquired infrastructure asset management software provider, AgileAssets. The acquisition is expected to increase the company’s operational capability.
For its fiscal third quarter, ended October 1, TRMB’s non-GAAP revenues increased 13.7% year-over-year to $901.40 million. Its non-GAAP gross margin rose 13.4% from the same period last year to $529.20 million. Its non-GAAP net income and non-GAAP net income per share, attributable to TRMB, stood at $168.60 million and $0.66, respectively, up 10.3% and 10% from the prior-year quarter.
The Street’s $0.63 EPS estimate for the current quarter (ending December 2021) reflects a 3.3% increase year-over-year. And the Street’s $895.56 revenue estimate for the current quarter indicates a 7.9% improvement from the same period last year. TRMB has beaten consensus EPS estimates in each of the trailing four quarters.
Over the past year, the stock has gained 29.8% in price to close yesterday’s trading session at $85.88. However, it has declined 1.2% over the past month. It is currently trading 11% below its 52-week high of $96.49.
TRMB’s promising prospects are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.
TRMB has a Value and Sentiment grade of B. It is ranked #13 out of the 45 stocks in the Technology – Electronics industry.
In addition to the POWR Rating grades we have stated above, one can see TRMB’s ratings for Growth, Momentum, Stability, and Quality here.
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REGN shares were trading at $624.78 per share on Thursday afternoon, up $7.30 (+1.18%). Year-to-date, REGN has gained 29.32%, versus a 27.79% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. More...
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