Stocks pushed higher into record territory on Monday, as investors were pleased with progress on the COVID-19 front and also hoped for economic stimulus measures from Washington. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite climbed as much as 1% on the day.
Data source: Yahoo! Finance.
As strong as the stock market’s performance has been lately, it pales in comparison to what ace investor Cathie Wood has done. As chief investment officer of ARK Invest, Wood runs five active ETFs that more than doubled in value in 2020. As a consequence, people pay attention when ARK Invest buys and sells stocks, and a couple of companies stood out among Wood’s purchases last week.
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Lockheed Martin
Lockheed Martin (NYSE:LMT) might not seem like the sort of stock that would ordinarily get the attention of ARK Invest’s funds. However, the old-school defense contractor got two purchases from the company’s ARK Autonomous Technology & Robotics ETF (NYSEMKT:ARKQ) last week, including a nearly 47,700-share purchase on Monday, Feb. 1 and a 16,500-share buy the following day. Combined, the two investments represented about 0.7% of the ETF’s total assets, bringing the fraction of the fund invested in Lockheed to nearly 2%.
Lockheed finds itself in an aerospace and defense sector that’s been off Wall Street’s radar lately. The COVID-19 pandemic has crushed commercial aviation, and while Lockheed doesn’t have a huge amount of commercial exposure, its Sikorsky helicopter division does serve some non-military purposes. However, most of its aircraft are reserved for military applications.
What many have seen as a potential point of interest for ARK Invest is Lockheed’s experience with rocketry. ARK Invest has said it intends to open a space exploration ETF in the near future, and Lockheed could be among the companies to play a prominent role in such a fund’s initial portfolio. With many other choices like SpaceX and Blue Origin remaining privately held, it’s hard to find publicly traded space stocks at all — let alone companies with more experience with rocket launches than Lockheed has.
Wood’s purchases of Lockheed haven’t yet made the stock a major position in its current lineup of ETFs. That could change when the space ETF becomes available.
PayPal Holdings
ARK Invest also added to positions in payment specialist PayPal Holdings (NASDAQ:PYPL). Purchases of 66,100 and 24,750 shares in the ARK Fintech Innovation ETF (NYSEMKT:ARKF) made PayPal the fund’s fourth-largest holding, making up 4.4% of the fund.
The purchases came after PayPal announced its fourth-quarter financial report. The electronic payments specialist added 16 million new active accounts during the period, and total payment volume climbed 39% year over year. About 377 million customers now use PayPal actively, moving $277 billion in payments during the quarter and bringing in $6.1 billion in revenue.
Electronic payments have become increasingly important during the pandemic, as e-commerce has come to the forefront. Yet PayPal has a lot of initiatives in its pipeline, and that could bolster growth even further.
Fintech has been a strong area for Wood, and the fintech ETF has performed quite well. PayPal’s been a big contributor to that success, and that’s likely to continue.
Keep watching
Watching what top investors do with their money can help you invest better as well. ARK Invest is on top of its game right now, and the stocks it’s buying and selling deserve your attention.
