Cathie Wood has been an active trader in January. The Ark Invest co-founder, CEO, and stock picker added to 10 of her existing growth stocks on Tuesday. She publishes the transactions daily for her exchange-traded funds, and this was one of her busiest days of this young year.
What’s she buying now? Some of the more interesting names on her Tuesday shopping list include Toast (NYSE: TOST), Pinterest (NYSE: PINS), and SoFi Technologies (NASDAQ: SOFI). Let’s take a closer look at some of her latest additions.
Investors who thought Toast would be toast likely have rumbling bellies these days. The provider of point-of-sale and other cloud-based services for the restaurant industry has seen its stock soar 34% since it bottomed out after delivering disappointing guidance two months ago.
Toast warned that gross payment volume per location was trending lower in the fourth quarter. There were fears heading into Toast’s early November update that folks were spending less on dining out. Economic concerns and student loan repayments were supposed to curb the appetites of folks who were hitting up restaurants or ordering takeout earlier this year.
Toast confirmed the industry’s near-term worries, but it didn’t mean things would end badly for shareholders. The 99,000 locations on Toast’s platform at the end of September was a 34% increase over the past year. Temporary softness in transactions could be overcome by the growing popularity of the platform itself.
Analysts see revenue climbing 32% and losses narrowing when Toast reports fourth-quarter results in mid-February. Wood is buying in ahead of the report. Toast flopped last time it announced financial results, but it recovered quickly. Wood is taking an early seat at the table. If you believe in restaurant stocks, but don’t want to put all your eggs in one basket, Toast offers a high-tech way for growth investors to play.
Is Pinterest back? The visual discovery engine is starting to turn the corner. Revenue climbed 11% in its latest quarter, its strongest year-over-year growth since early 2022. A combination of an 8% increase in active users and a 3% uptick in average revenue per user helped deliver double-digit top-line growth. It’s not the only positive turn in Pinterest’s third quarter.
After posting back-to-back quarters of average revenue per user, Pinterest is growing its audience again. There are now 482 million global monthly active users on Pinterest. If the online advertising market improves in 2024 this won’t be the end of double-digit revenue increases at Pinterest.
Wall Street pros see a 17% jump in revenue at Pinterest for all of 2024. They see the bottom line growing even faster. This isn’t the 48% top-line jump it posted in 2020 when the pandemic had us all scouring the site for recipes and craft ideas. It isn’t the 52% surge it came through with in 2021. It’s still an encouraging step in the direction of accelerating growth at Pinterest. It will step up with its fourth-quarter results next week.
3. SoFi Technologies
Shares of SoFi soared 20% on Monday after the company posted blowout financial results. With the stock taking an 8% step back on Tuesday it’s not surprising to see Wood take advantage of the post-pop sell-off.
This week’s fourth-quarter report was a breakthrough. The fintech provider served up its first profit on a reported basis, and if you prefer the kinder adjusted earnings SoFi stretched that winning streak to 11 straight quarters. SoFi accounts climbed 44% over the past year to 7.5 million. It’s also now modeling 20% to 25% compound annual revenue growth through 2026 on healthy earnings before interest, taxes, depreciation, and amortization (EBITDA) margins. You probably don’t want to bet against SoFi right now.
Should you invest $1,000 in Toast right now?
Before you buy stock in Toast, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Toast wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of January 29, 2024
Rick Munarriz has positions in Toast. The Motley Fool has positions in and recommends Pinterest and Toast. The Motley Fool has a disclosure policy.
Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool