Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

After four trading days of selling -- outside of getting in on last week's record-setting initial public offering (IPO) -- Ark Invest co-founder, CEO, and Chief Investment Officer Cathie Wood started buying again on Wednesday. She added to several existing positions.

Some of her more intriguing buys this week include Eli Lilly (NYSE: LLY), Block (NYSE: XYZ), and Coinbase Global (NASDAQ: COIN). All three stocks moved slightly lower on Wednesday. Wood tends to build up her positions on down days, so that's not a surprise. Let's take a closer look.

Image source: Getty Images.

1. Eli Lilly

Eli Lilly stock may have ticked lower on Wednesday, but it's not a laggard. The pharmaceutical giant is beating the market with its 40% jump over the past year. Eli Lilly briefly topped $1 trillion in market cap when its shares hit an all-time high earlier this month.

You don't have to look hard for a catalyst. The GLP-1 boom has benefited the duopoly championing the weight-loss and diabetes-tackling injectables. Eli Lilly's Mounjaro and Zepbound are posting monster growth. Now that its oral weight-loss medication Foundayo cleared U.S. Food and Drug Administration approval in April, another growth driver has emerged for shareholders.

Growth was impressive in Eli Lilly's latest report. Revenue soared 56% to $19.8 billion for the first quarter of this year. Net income more than doubled. Both ends of the income statement breezed past expectations, and there's more where that came from.

Eli Lilly boosted its earlier full-year guidance. It now sees $82 billion to $85 billion in revenue this year, a 26% to 30% increase. The $35.50 to $37 in adjusted earnings per share that it's now targeting for 2026 represents a 47% to 53% gain.

Eli Lilly is a big pharma giant with many drugs and treatments on the market. However, even with its massive portfolio, Mounjaro and Zepbound accounted for 56% of last year's revenue. With average global prices for its star injectables likely heading lower, it will need Foundayo and other promising products in its pipeline to come through to sustain the lofty valuation. Eli Lilly is trading for just over 30 times this year's adjusted earnings, at the midpoint of its updated guidance.

2. Block

Unlike Eli Lilly, Block stock isn't beating the market. The fintech pioneer, formerly known as Square, has traded flat over the past year. Despite its strong portfolio of apps -- point-of-sale processor Square; buy now, pay later specialist Afterpay; consumer digital wallet CashApp; and many crypto platforms -- Wall Street isn't impressed.

It's not just the stock that's flat. Revenue rose a mere 0.3% last year. The good news is that year-over-year top-line growth has accelerated sequentially for four consecutive quarters. The bad news is that it's just a 4.9% revenue increase at the end of that streak.

Thankfully, the revenue growth should continue to accelerate. With Block shares trading at a forward earnings multiple in the high teens, it's not a bad entry point if it can continue its modest but well-trending acceleration.

3. Coinbase

Coinbase stock has the ugliest one-year chart of the three. The leading online trading platform for digital currencies has seen its shares plummet 37% over the past year. The appetite for Bitcoin and other cryptocurrencies has meandered lately. Bitcoin's value has declined 39% over the past year.

The lack of trading enthusiasm for crypto is understandably weighing on Coinbase financials. After several quarters of growth, the top line has declined 22% and 31% in the last two reports. Profitability is expected to fall sharply for the second consecutive year.

A rally for digital currencies can help turn its fortunes around. Coinbase can also diversify to avoid leaning too heavily on its digital currency traders. The latter isn't likely to happen, so don't let Coinbase down again, Bitcoin.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Block, and Eli Lilly. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.