Ark Invests Cathie Wood has been criticized for her investment style, partly for being an easy target as she chooses to disclose portfolio movements on a daily basis, but also because she has arguably been unwilling to admit analysis despite outsized declines in most cases failed their top holdings in the last year.
She also continues to increase exposure to some of her most-convinced holdings, most recently in Teladoc Health Inc TDOC.
The founder and CEO of Ark Invest acquired more than 600,000 shares of the virtual healthcare company after selling off profits. She defended the move on CNBC’s The Exchange on Friday.
Holz takes a stand: “We believe Teladoc will become the backbone of health information in the United States,” Wood said.
Sixteen percent of Americans are already paid users of the service, she said. When looking for S-curve growth, Ark looks for companies with 15% to 20% market penetration as a new market trend emerges, but that’s not the main point.
“The story isn’t direct consumer for Teladoc — that’s certainly been a big boost during COVID — the story here is much bigger, it’s business-to-business,” Wood said.
She acknowledged the company’s quarter had its flaws, but claims most analysts are missing the bigger picture. There were no questions about the recent partnership with Amazon.com Inc AMZN, or the company’s contract with a major state hospital over the conference call, she added.
Teladoc was recently hired to support Northwell Center’s telemedicine efforts, Wood said.
“Also not mentioned is Amazon’s decision to partner with Teladoc rather than compete with it.”
Teladoc stock has been sold several times over the past year over concerns about increasing competition from Amazon, but the e-commerce giant chose to partner with Teladoc for at least some of its healthcare services, Wood said.
Wood maintains her expectations for a significant upside in disruptive innovation stocks over five years, and Teladoc is no exception.
“We’re looking at one of the biggest stories in healthcare,” Wood said. “A category killer in the next five to ten years.”
TDOC Price Action: Teladoc shares have traded between $28.75 and $189.65 over a 52-week period.
According to data from Benzinga Pro, the stock gained 0.75% on Friday to close at $33.76.
Photo: courtesy of Teladoc.