Cathie Wood Goes Shopping: 3 Stocks She Just Bought

Cathie Wood is rocking and rolling these days. The climate is kind for the co-founder, CEO, and ace stock picker of the Ark Invest family of growth-oriented exchange-traded funds. Her largest ETF is up a hearty 80%. She publishes the transactions across all of her ETFs at the end of every trading day.

Ark was active on Monday. It made a single trade on Tuesday. Ark only bought three stocks on Wednesday, increasing its stakes in Robinhood Markets (NASDAQ: HOOD), Netflix (NASDAQ: NFLX), and Arcturus Therapeutics Holdings (NASDAQ: ARCT). Let's take a closer look at what she might be seeing in the three stocks.

1. Robinhood Markets

It's been feast or famine for Robinhood Markets investors. The next-gen trading platform was flying high four years ago when its active user base peaked at 24.1 million in May of 2021. Two years later, Robinhood's trader base would be cut in half.

Things are rosier these days. Robinhood had a record 26.7 million funded customers at the end of August. Total platform assets have doubled to $304 billion, as a 43% jump in net deposit growth rate and appreciation for its often aggressive and volatile traders have combined to make Robinhood a rock star again.

Soaring crypto prices, a good run of gains for options trading, and a rebound in meme stock speculation are helping. Robinhood's net revenue rose 45% to $989 million in its latest quarter. The company that initially wooed small and young stock investors with its commission-free trades is leaning heavily on other asset classes.

Image source: Getty Images.

Its transaction-based revenue did most of the heavy lifting, soaring 65% over the past year. It now accounts for more than half of the top-line mix. More than half of that revenue came from options trades. Faster-growing crypto trading revenue comes next, not a surprise with the pop in digital currencies over the past year. The stock trades that put Robinhood on the map now account for just 12% of its transaction-based revenue.

Net income doubled to $0.42 a share, its third consecutive quarter of at least a double-digit percentage beat on the bottom line. This success hasn't happened in the shade. Robinhood stock has more than quadrupled over the past year, and it's been a 12-bagger over the past three years.

Robinhood isn't just a haven for speculators. Its Robinhood Gold program -- where subscribers pay for access to high yields on savings along with other perks -- is now a bigger revenue slice than stock-based transaction revenue. However, future gains will continue to be spearheaded by innovation. The recent push to offer investments based on sporting event outcomes is another way to keep its audience widening and its asset base growing.

2. Netflix

Shares of Netflix slipped 10% after posting poorly received financial results. The earnings season report wasn't as bad as it may initially appear. It was a rare earnings miss for the streaming service stocks leader, but that was the handiwork of one-time expenses related to a Brazilian tax dispute.

Guidance for the fourth quarter may seem soft, sequentially, but it's a seasonal thing. Profitability typically takes a step back during the holiday quarter as Netflix ramps up its marketing and big-budget releases. Last year, Netflix attracted half of its roughly 40 million net new subscribers during the fourth quarter. It doesn't report its subscriber metric anymore, but it's historically what has happened. On a year-over-year basis, the outlook calls for 17% revenue growth and a bigger increase on the bottom line.

Netflix continues to be the undisputed top dog in premium streaming. Wednesday's sell-off appears to be an overreaction. Wood is making the most of the opportunity.

3. Arcturus Therapeutics

Wood has a thing for biotechnology stocks, a sector that has started heating up lately after languishing for a bit. Arcturus is leaning on messenger RNA tech to develop therapies for rare respiratory and liver diseases. Despite a modest market cap just north of $300 million -- one of the smallest companies across Ark investments -- this is already a commercial-stage company.

It generated more than $200 million in revenue in 2022, but revenue has been declining for the third consecutive year. Analysts see Arcturus starting to grow again, turning profitable in 2027. They are targeting a profit of $4.79 a share on $374 million in revenue by 2028. These are lofty growth expectations, pricing the stock at less than three times that year's potential earnings and revenue above its current market cap.

A lot can happen in the next three years, and investors saw that happen on Wednesday. Arcturus stock was cut in half on Wednesday, as it announced disappointing interim trial results for a once-promising treatment. Guggenheim would go on to downgrade the stock, but Wood is a believer.

Rick Munarriz has positions in Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.