Cathie Wood Buying the Dip: She Just Bought 3 Stocks

To be fair, Cathie Wood doesn’t mind the rain. The Ark Invest co-founder, CEO and investor isn’t afraid to add to her positions as stocks fall, she said on Friday.

Wood spent the last trading day of last week aggressively buying stocks that were trading lower on a day when the overall market was down.she increased in Roku (NASDAQ:ROKU), unified software (NYSE:U)and Sophie Technology (NASDAQ:SOFI)all three stocks fell more than the market. Let’s take a closer look at these three stocks to buy.

1. Roku

One of the biggest losers on Wall Street on Friday was Roku.Shares of the company behind the original smart TV operating system Plunged 24% Wood has been aggressively buying more Roku shares across her three funds following consecutive declines in average revenue per user.

Roku’s report is sound on the surface. Revenue growth of 14% beat analyst targets as well as its own guidance. Its revenue outlook for the current quarter also compared with Wall Street forecasts. However, Roku dampening a potential bull run paints a cloudy picture for an uneven recovery in advertising. That’s a problem for a business model that relies almost entirely on the connected TV advertising market to drive its profits.

Friends watch football match on TV.

Image source: Getty Images.

However, there’s no doubting Roku’s popularity. It remains the leading operating system for smart TV connectivity in North America. It has seen double-digit growth in account numbers over the past year and is seeing increased engagement. The average account holder now spends more than four hours a day watching streams on the platform. With all of this in mind, you might think that the average revenue per user would be higher, but that’s not the case.

Roku noted that media and entertainment promotional spending activity is trending downward. There are thousands of apps on Roku, and spend activity is a key part of driving higher average revenue per user. Streaming Service Stocks It more than doubled last year but is now down more than a third since hitting a 52-week high in December. But Roku remains the fourth-largest holding in Ark Invest’s portfolio.

2.Unity software

Unity has also failed to capture the hearts of investors this year. Shares of the game engine developer have fallen 17% so far this year. The company is experiencing some shrinkage, announcing last month that it would lay off about 25% of its workforce.

Unity has posted larger-than-expected quarterly losses over the past year and could see more losses when it reports again next week. Despite a 25% year-over-year revenue increase, Wall Street pros expect the deficit to widen. Profitability challenges have kept the stock in check, and Unity’s chief executive resigned four months ago.

Platforms facing losses often raise fees to boost profits, but this didn’t work out well for Unity last year. It introduced new fees to developers last summer, but had to reverse the move after facing an outcry from customers. Maybe a new CEO isn’t such a bad idea.

3. Sophie Technology

SoFi’s shares are down 16% so far this year, despite soaring 20% ​​on the day the company reported blowout financial results three weeks ago. The fintech provider has posted 11 consecutive quarters of positive adjusted earnings, but last month it finally posted earnings growth. Post it first reporting net profit.

There are now 7.5 million accounts, a 44% increase over the past year. SoFi targets compound annual revenue growth of 20% to 25% over the next three years. Revenue should decelerate this year, but if it can build on its newfound success and become profitable, it could attract the attention of more investors.

Should you invest $1,000 in Roku right now?

Before buying Roku stock, consider the following factors:

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Rick Munariz Have a job in Roku. The Motley Fool has positions and recommendations in Roku and Unity Software. Motley Fool at disclosure policy.

Cathie Wood Buying the Dip: She Just Bought 3 Stocks Originally published by The Motley Fool

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