Down by 62%, Is This Cathie Wood Stock a Screaming Buy Today?

When it comes to buying the dip, Cathie Wood is an expert. And while this stock may be up now, it’s still down from all-time highs.

| More on:
man touches brain to show a good idea

Source: Getty Images

When it comes to investing, ARK Innovation ETF (NYSEMKT:ARKK) chief executive officer (CEO) Cathie Wood is one of the best when it comes to betting on beaten-down stocks. The CEO has seen many rebound significantly, buying and selling her firm’s way to riches.

However, while Ark Invest is an American company, Cathie Wood still holds some Canadian companies in her portfolios. And when shares prices have dropped for this one in particular, that’s when Wood swoops in and picks up more.

Up but also down

One example of such an investment by Cathie Wood is Shopify (TSX:SHOP). Shopify stock is currently up 111% in the last year alone, which is amazing! The tech stock continues to recover after dropping significantly from all-time highs. Highs that traded around $228 (adjusted for a stock split). Taking that price into consideration, shares are still down by 62%, as of writing.

In the case of Shopify stock, Cathie Wood has bought and sold back and forth fairly consistently. The firm bought consistently as Shopify stock made a name for itself, starting back in 2017. There were a few selloffs, increasing them at the beginning of the pandemic. Since that time, Shopify stock has come into focus for the investor, with the company buying and selling quarter after quarter.

In the last year alone, Cathie Wood’s ARK Invest sold $1.25 million shares in the fourth quarter of 2022, only to buy back 707,000 in the first quarter of 2023. After the second quarter of 2023, as prices rose higher, they sold off a whopping 5.11 million.

Now, the stock takes up 3.52% of Cathie Wood’s portfolio, with still 8.87 million shares in hand. That’s worth $765,392,300 as of writing! So, what does this investment mean for today’s everyday investor?

Still betting on long-term growth

While Cathie Wood’s firm certainly has sold a lot of its investment in Shopify stock, it continues to bet on the company for long-term growth. In fact, the purchase of 707,000 shares came when prices were at about $50 per share. It was during one of the worst trading days for the company and before the boom, which occurred later on, as the company announced layoffs and the sale of its logistics business.

As you can plainly see, shares have exploded since that time. Shares are still likely to be down overall, as with many Shopify stock investors who have picked up the stock over the years. However, it’s the long-term play that Cathie Wood is after.

Shopify stock continues to beat out earnings estimates quarter after quarter, even after providing a weaker outlook that sent shares down during the first quarter of 2023. The stock is now expected to achieve a record 400% earning jump in the third quarter and a 700% increase in earnings for the full year.

Should that happen, it’s likely there will be more big buys by Cathie Wood in the future on the dip. It seems investors in general are still hot on the company’s tail and believe the focus back on its roots in e-commerce was a great move for the company. And Cathie Wood likely agrees.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has positions in Shopify. The Motley Fool has positions in and recommends Shopify. The Motley Fool has a disclosure policy.

More on Tech Stocks

A plant grows from coins.
Tech Stocks

3 Growth Stocks Wall Street Might Be Sleeping on, But I’m Not

Don’t miss your chance to load up on these three beaten-down stocks.

Read more »

think thought consider
Tech Stocks

Is CGI Stock a Buy Even With No Dividend Yield?

CGI stock may not have a dividend to speak of. But does that necessarily mean you should ignore this top…

Read more »

A robotic hand interacting with a visual AI touchscreen display.
Tech Stocks

Why Now Is the Time to Invest in Canadian AI Stocks

Are you looking for one of the most solid Canadian AI stocks out there? This one is probably your best…

Read more »

The letters AI glowing on a circuit board processor.
Tech Stocks

Why AI Stocks Should Be in Every Canadian Investor’s Portfolio

AI stocks continue to be one of the best options out there for long-term investing, especially when considering Canadian options.

Read more »

money goes up and down in balance
Tech Stocks

1 “Magnificent 7” Stock I’d Buy Over Nvidia Right Now

Here's why Meta Platforms stock is a better choice for Canadian investors compared to Nvidia in November 2024.

Read more »

A data center engineer works on a laptop at a server farm.
Tech Stocks

3 No-Brainer Data Centre Stocks to Buy With $500 Right Now

Data centres are going to be a huge growth opportunity in the next decade. And these are the top buys.

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Is OpenText Stock a Buy, Sell, or Hold for 2025?

OpenText stock has fallen in the last few years, but that could mean this top tech stock remains an undervalued…

Read more »

AI microchip
Tech Stocks

Celestica Stock: Buy, Sell, or Hold?

Celestica's stock price has rallied 950% in the last five years. Will the AI boom send it even higher in…

Read more »