These 3 Cathie Wood Stocks Can Give You Early Retirement

Famed investor Cathie Wood attracted major public attention last year, and for good reason. Her company’s flagship exchange rate fund,Ark Innovation ETF, shot up 149% in 2020. In fact, the pandemic propelled many of its large portfolio holdings, which focus on companies using innovative technology to disrupt traditional industries.

As an individual investor looking to boost your returns, you can gain exposure to some of Cathie Wood’s best stocks by investing directly in their stocks. Let’s see why DocuSign(NASDAQ:DOCU), JD.com (NASDAQ:JD), and Year (NASDAQ:ROKU) were identified by a team of Motley Fool contributors as companies with excellent long-term prospects that could potentially earn you early retirement.

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Signs for strong growth

Eric Volkman (DocuSign): One company that could really make an investor well into their senior years is DocuSign, the leading digital signature specialist. As the world becomes more and more e-connected, DocuSign will be there to monetize its services.

Many investors were acutely aware of this during the pandemic, which was the pinnacle for work-from-home situations (and therefore considered the same for remote digital signing of documents). As a result, DocuSign soared to the highest stock prices in its short history.

Recently, however, hopes that we will quickly move past the delta variant to largely escape the outbreak have eroded DocuSign stock. It has bounced back from those lofty price highs as investors switch to companies they believe are better positioned for the recovery.

I believe this presents a good opportunity to buy DocuSign at what will turn out to be a cheap price in the end. Why? Because the strong growth of online document signing services is not just a trend in the pandemic era.

During the stay-at-home era, many users discovered these for the first time and are now well aware of how useful and resource-saving they are. In any case, demand for the products that DocuSign offers should grow even as we go back to the office – maybe even more, as we’re likely to be busier there.

We can fully expect continued double-digit growth from DocuSign. The company managed to increase its revenue by 50% year over year to nearly $512 million in the recently reported Q2 of fiscal 2022 – surpassing the growth rate in the same quarter last year.

DocuSign is a young company offering services that are really just starting to rise in popularity, so it continues to fall in the red by GAAP standards. But if we scroll down to the non-GAAP (adjusted) numbers, the company is enjoying fairly healthy profitability. Net income in that quarter rose dramatically to nearly $98 million for the quarter, from $34.8 million a year ago.

Zooming out to the whole of 2022, DocuSign is leading for annual revenue growth of at least 43%, which is more or less in line with the average analyst estimate. The company has not provided bottom-line forecasts, but given the driving dynamics, we can expect further improvement in that area as well.

The world is full of bureaucracy and we will never stop signing our names on the dotted line. What is changing is that the process is increasingly happening online. And very often, DocuSign is the company that provides the digital assets.

Cathie’s favorite Chinese stock?

Jeremy Bowman (JD.com):Cathie Wood made headlines in July when ARK Invest dumped much of its stock in Chinese stocks after the carnage at Chinese tutoring companies such asTAL Education GroupandNew oriental tutorial groupafter Beijing said those companies should become nonprofits.

At the time, Wood argued that Chinese stocks were going through a “valuation reset”, adding: “From a valuation standpoint, these stocks have fallen and from a valuation standpoint they are likely to remain low.”

However, Wood reversed in August, returning to JD.com after the e-commerce company released a strong second-quarter earnings report. Wood told Bloomberg of her renewed optimism in the Chinese market: “I am not pessimistic about China in the longer term because I think they are a very entrepreneurial society.”

JD has been a popular choice for ARK Invest in recent weeks as it now owns approximately 2.5 million shares of JD in its funds valued at approximately $200 million.

It’s easy to see why Wood loves JD. As China’s largest online and general retailer, the company offers both high growth and a huge market. China is both the world’s largest e-commerce and retail market and is expected to be the largest economy in the world over the next 10-20 years.

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JD posted 26% growth in the most recent quarter to $39.3 billion, and its revenue mix is ​​gradually shifting towards higher margin services companies such as logistics and the external market. In direct retail, it is also diversifying beyond its origins as a retailer of electronics and appliances to general merchandise, including consumables such as grocery and pharmacy, and tapping into a huge addressable market. JD has built a huge network of warehouses that rival Amazon, and has also developed advanced logistics technology, including a fully automated warehouse with just four employees and self-driving vehicles that deliver parcels.

With that kind of technology, a big market to enter, and a strong track record of growth, it’s easy to see why JD is one of Wood’s favorite Chinese stocks.

Controlling the entertainment experience in the living room

Neil Patel(Year):It shouldn’t surprise anyone thatstreaming videoentertainment is becoming increasingly popular, a trend that was further boosted by the pandemic. The US, for example, expects to have only 60 million cable TV households by 2025. That’s less than the nearly 100 million in 2015, and Roku is becoming the main beneficiary of this shift to cutting cables. As the third largest holding in Cathie Wood’s Ark Innovation ETF, this streaming stock has a chance to really move the needle for her company’s (and your) portfolio.

What really makes Roku stand out is that it doesn’t matter which content service it is Netflix,Walt Disney‘sDisney+, orAmazon Prime, eventually ends up with the most subscribers. Roku will win anyway.

Founder and CEO Anthony Wood has essentially built a three-way platform business that connects the aforementioned content companies with viewers who want access to all their favorite shows and movies in one place. And organizations looking to reach these customers with ads are also coming to Roku to attract audiences they can’t reach on traditional TV. Consequently, Roku’s competitiveness lies in its powerful network effects, with the addition of more users increasing the value for others.

People tend to stream content mainly on televisions, and this plays directly in Roku’s favor. More than a third of new smart TVs sold in the US come with Roku’s software already built-in. As consumers increasingly move away from their outdated, expensive and user-unfriendly cable subscriptions to stream video, Roku will continue to thrive. With 55.1 million active accounts streaming a staggering 17.4 billion hours of content in the past quarter, Roku is increasingly becoming theleading TV operating systemcontrol our living rooms in a streaming world.

Revenue in the most recent quarter is up 81% year over year, and management expects revenue in the current quarter to be 51% higher than in the third quarter of 2020. This demonstrates the remarkable growth that this company of $ 43 billion still registering. Roku’s forward price-to-earnings ratio and price-to-sale ratio of 247 and 15, respectively, certainly don’t scream buy at first glance. But consider that today there are just over 1 billion cable TV subscriptions worldwide. This means that Roku worldwide still has a huge opportunity to get more active accounts on its platform as people cut the cord and start using streaming.

As the company continues to implement the strategy playbook that has worked so well domestically in international markets, expect Roku’s stock price — and your retirement savings — to climb higher over time.