It’s been a difficult period for Cathie Wood, the well-known Wall Street investor. Its flagship fund, Ark Innovation Fund, crashed to $80, which was the lowest level since September 2020. The ARKK stock price has tumbled by almost 50% from its all-time high. As a result, it has underperformed the S&P 500, Dow Jones, and the Nasdaq 100 indices. So, let us look at some of the most oversold stocks in the ARKK Fund.
Teladoc Health (NASDAQ: TDOC) is a disruptive company that is in the healthcare industry. Its idea is simple. Instead of going to a physical hospital, you can get in touch with the leading doctors using its website and applications.
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This business model did well in 2020 as most people spent time at home. As a result, the Teladoc stock price jumped to an all-time high of $307 in 2020. Fundamentally, its business boomed as its revenue crossed the $1 billion milestone.
Today, Teladoc Health is a shadow of its former self. A stock that used to trade at $307 is currently trading at $80. Worse, in 2020, the company acquired Livongo Health in a $16 billion deal. Today, the combined company is worth just $13 billion.
Still, we believe that the Teladoc stock price will bounce back in the long-term even though we don’t see it retesting its all-time high. All it needs is a good quarter and buyers will start streaming back in.
Roku (NASDAQ: ROKU) is the fourth-biggest stock in Cathy Wood’s Ark Innovation Fund. The fund has a stake in the company worth about $800 million. Yet, the Roku stock price has crashed by over 50% from its all-time high, bringing its total market capitalization to over $24 billion.
Roku shares have declined because of the rising competition with the likes of Google and Amazon. It has also lagged because of the fears that its business will lag as the world’s economy reopens. While these facts are correct, we believe that the shares will rebound later this year.
Coinbase (NASDAQ: COIN) is the fifth biggest stock in the ARKK fund. The stock has crashed in the past few months as activity in the cryptocurrency industry has stalled. The falling Bitcoin and altcoins prices has not helped.
Today, Coinbase has a market capitalization of about $48 billion, which is lower than its all-time high of over $60 billion. Still, there is a likelihood that the stock will bounce back. For one, we expect that cryptocurrencies will bounce back in the first quarter. Also, we feel that investors have gotten so pessimistic about the company.
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