We may have lost an hour to daylight savings time over the weekend, but Cathie Wood isn’t wasting any time. The Ark Invest co-founder, CEO, and ace stock picker added to 10 of her existing growth stocks on Tuesday. Investors know this because Wood publishes Ark’s buys and sells for her exchange-traded funds (ETFs) after the end of every trading day.
What’s she buying now? Some of the names on her Tuesday shopping list included Pinterest (NYSE: PINS), Nu (NYSE: NU), and Sea Limited (NYSE: SE). Let’s take a closer look at some of her latest additions.
1. Pinterest
Like diving into a recipe found on Pinterest, the visual-discovery engine’s stock is cooking again. Shares of Pinterest have doubled since bottoming out in the springtime of 2022.
The company has come through with back-to-back quarters of nearly 12% top-line growth, ending a run of five straight reports featuring single-digit upticks. Keep that last streak of single-digit revenue growth in mind, as it applies to another company in this article.
The 498 million active monthly users on its platform at the end of 2023 is an 11% increase over the past year. Average revenue per user also inched higher, delivering a 12% increase in revenue. The bottom line is holding up even better.
Net income at Pinterest currently is growing much faster than its revenue growth. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) soared 86% in the company’s latest quarter. It’s not just the scalable nature of a popular social platform. Pinterest has been controlling costs to make sure it’s better positioned to weather the next storm.
The company’s guidance calls for revenue to accelerate to 15% growth in the current quarter. Some analysts were hoping for more, but Pinterest has become a more complete growth story on both ends of the income statement.
2. Nu
Wood isn’t afraid to buy a fintech stock if it offers stellar growth. She also isn’t afraid to leave North America to find that growth.
Nu is the parent company of Nubank, a digital bank in Brazil that has exploded in popularity since launching roughly a decade ago. More than half of the country now has a Nubank account.
Revenue rose 57% to $2.4 billion in the company’s latest quarter on a foreign-exchange-neutral basis. Big jumps happen when a company experiences a 26% year-over-year increase in accounts and a 23% leap in average revenue per active account. Nu has been profitable for six straight quarters, including record net income in its latest report.
The company expects to hit 100 million accounts this year. There’s still room to get even stronger in Brazil, but the easier path will be gaining ground in its young presence in Mexico and Colombia by rolling out new products and features the way it has on its home turf.
The stock has nearly tripled since the start of last year but is trading for just 17 times next year’s projected earnings. You’ll find financial services companies trading at lower multiples, but they’re not growing like Nu is right now.
3. Sea Limited
Sea Limited is finally starting to woo investors again. The Singapore-based player in e-commerce, online gaming, and fintech has seen its stock soar 43% in 2024, even if it’s still sharply down over the past year and off a blistering 84% from the all-time high it hit in late 2021.
Sea Limited’s business has slowed since its stock peaked — it posted four years of triple-digit revenue growth until the end of 2021. Like Pinterest, Sea Limited has rattled off five consecutive quarters of single-digit-percentage top-line gains. The good news is that it just posted full-year profitability for the first time.
Analysts also see a return to accelerating revenue growth, targeting a 15% increase for the current quarter, as well as the entire year. They also see Sea Limited’s profit nearly doubling in 2024.
Should you invest $1,000 in Pinterest right now?
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Rick Munarriz has positions in Nu. The Motley Fool has positions in and recommends Pinterest and Sea Limited. The Motley Fool recommends Nu. The Motley Fool has a disclosure policy.
Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool
