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Tesla stock remains the biggest position in Cathie Wood’s ARK Innovation ETF.
Courtesy of ARK
Cathie Wood’s
ARK Innovation ETF
sold about 22,000
Tesla
shares Thursday, according to her firm’s daily trading activity email.
Selling
Tesla
stock (ticker: TSLA) can generate headlines for Wood and the electric-vehicle pioneer, but looking over a longer period, Wood seems as bullish as ever on shares of the electric vehicle leader.
Tesla is still the largest position in the ARK ETF (ARKK), representing about 10% of ETF assets. Tesla stock has represented about 10% of the portfolio, plus or minus a couple of percentage points, for the past three years.
Holding Tesla was a positive for the Innovation ETF in the first quarter of 2022. Tesla avoided the first quarter sell-off, gaining about 2%. Still, the ETF struggled overall. ARK Innovation dropped almost 30% in the first quarter, worse than the 5% drop of the
Rising interest rates and inflation have hurt all growth stocks. The
Nasdaq Composite
lagged behind the S&P 500 too, dropping about 9% in the first quarter. Wood tends to own the fastest-growing stocks. Those were hurt even more than Nasdaq stocks in the market downdraft.
Tesla, in fact, was the only one of the trillion-dollar megacapitalization stocks in the S&P 500 to end the quarter with a gain. Shares of
Alphabet
(GOOGL) and
Amazon.com
(AMZN) dropped about 4% and 2%, respectively.
Microsoft
(MSFT) and
Apple
(AAPL) dropped about 8% and 2%, respectively.
Tesla might have beaten those peers because its growth was better than expected. The company, back in early January, reported delivering about 309,000 vehicles in the fourth quarter. That was far better than the roughly 275,000 Wall Street projected. Tesla followed up the delivery performance with better-than-expected earnings later in January.
Tesla stock ended the quarter higher, but still had its share of volatility. Shares hit an intra-quarter low of $700 on Feb. 24, down about 34% for the year. They rallied more than 50% from there into the end of March to notch a remarkable recovery.
How Tesla stock performs in the second quarter of 2022 will partly depend on first-quarter deliveries from Tesla. That data is due out any day now, most likely on Saturday, April 2. Wall Street projects roughly 312,000 vehicles will be delivered, up a little from the fourth quarter of 2021.
Parts shortages, such as a lack of semiconductors, has constrained automotive production for more than a year; Tesla has been affected, too. Showing growth from the fourth quarter of 2021 into the first quarter of 2022 should be good enough for the stock.
Wood probably hopes that’s the case. Tesla is still the largest position in her Innovation ETF.
Write to Al Root at [email protected]
Source: https://www.barrons.com/articles/cathie-wood-ark-tesla-stock-51648819254?siteid=yhoof2&yptr=yahoo