Cathie Wood's ARK Invest Only Owns 4 Dow Stocks, and They Aren't What You Think
Cathie Wood, the CEO of ARK Invest, is known for finding hypergrowth names with upside potential. The three largest holdings in ARK's six actively managed funds are Tesla, Square, and Teladoc. None of the three is cheap by traditional valuation metrics like price to sales (P/S) or price to earnings (P/E). But ARK believes that these companies, and others like them, will lead to a doubling of U.S. GDP to $40 trillion by 2035.
By contrast, The Dow Jones Industrial Average (DJIA) will celebrate its 125th anniversary on May 26. But while it's meant to reflect the entire U.S. economy, it doesn't exactly conjure an image of growth. In fact, the Nasdaq has given investors twice the return of the DJIA over the last five years.
Surprisingly, the four DJIA components that ARK owns -- Apple (NASDAQ: AAPL), Caterpillar (NYSE: CAT), Boeing (NYSE: BA), and Honeywell (NYSE: HON) -- are all relatively stable companies with histories of earnings growth, rather than up-and-coming rising stars. Here's why Cathie Wood likes these four Dow stocks, along with some surprising reasons she doesn't like a few others.
Source Fool.com
