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Invest In Disruptor Companies For Big Stock Gains

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ARK Investment Management Finds Disruptor Companies For Investment Outperformance

ARK Investment Management Catherine Wood’s investment firm, ARK Investment Management, researches and finds disruptor companies for big stock gains and long-term outperformance.  Disruptor companies are companies that are in the process of developing technologies that will likely disrupt the current way things are done, which can lead to huge sales gains and earnings increases, and eventually much higher stock prices. For example, Apple Inc. (NASDAQ:  AAPL) rolled out some notable disruptor technologies over the past several years, from the iPhone to the iPad, that literally changed the way billions of people in the world communicate.  Apple’s technological innovations set the industry trend and caused competitors to scramble to catch up.  The performance of Apple’s stock over the past eleven years speaks for itself regarding what happens when companies introduce disruptive technologies that reshape the business landscape, with AAPL gaining over 8,500% over that time period.

ARK Investment Management Disruptor Company Investment Strategy

Genetic SequencingARK Investment Management invests in various companies that are in the process of developing disruptive and innovative technologies.  They are currently focusing on the following sectors:  genetic sequencing, 3-D printing, robotics, cloud computing, social media, personalized medicine, and social media.  Of course, as new disruptive technologies emerge, their focus will expand to stay ahead of the investment curve. ARK Investment Management’s investment strategy is to identify and invest in companies with disruptive technologies before the broader stock market discovers them and piles into their stocks, driving them much higher.  In doing so, they try to avoid engaging in broad benchmark investing that is so common among stock portfolio managers.  Their philosophy is that benchmark investing is investing in the here and now, while investing in companies developing disruptive technologies is investing in the future.  Investments in companies developing disruptive technologies provide a way to not only expose a stock portfolio to potential significant future gains, but also a means of diversifying away from the herd of benchmark investors that dominant the stock market. While it might seem like a no-brainer to invest in disruptor companies before everyone else, many disruptive technologies are treated with a high degree of skepticism by the majority of investors until they are proven beyond a doubt that they are in fact breakthrough technologies that will reap the companies involved in them huge financial gains.  ARK Investment Management’s research analysts take a different and more extensive research approach than the traditional stock analyst community.  Their approach involved interacting with the movers and shakers in many fields of research to gain a grasp on which under the radar companies are developing disruptive technologies that are worth investing in.  The downside is that the volatility associated with investing in disruptive technologies is much higher than benchmark stock investing; however, the potential rewards are also much greater, if one is a long-term investor focused on investing for a number of years.

Disruptor Companies That ARK Investment Management Is Investing In

The following are disruptor companies that are developing disruptive technologies that ARK Investment Management thinks are important to keep an eye on.

Athena Health

  • Athena Health, Inc. (NASDAQ:  ATHN) is a business services company that provides health related services to medical group practices primarily in the United States.  The company’s computerized services include athenaNet, a proprietary Internet-based practice management application, athenaCollector, a revenue cycle management service that automates and manages billing-related functions for physician practices, Anodyne Analytics, a business intelligence application, which offers physicians and practice managers with insight into practice performance; and Healthcare Data Services that offers practices an understanding of the cost and quality of the care to patients; and athenaClinicals, an electronic health record service that automates and manages medical-record-management-related functions for practices, as well as assists medical groups with the handling of physician documentation, orders, and related inbound and outbound communications
  • Illumina Inc. (NASDAQ:  ILMN) has the rights to develop treatments using 90% of base DNA that has been mapped to date.  The company develops, manufactures, and markets life science tools and integrated systems for the analysis of genetic variation and function to find cures for diseases and medical conditions.
  • Telsa Motors, Inc. (NASDAQ:  TSLA) designs, develops, manufactures, and sells electric vehicles and electric vehicle powertrain components.  The company provides services for the development of electric powertrain systems and components, and sells electric vehicle powertrain components to other automotive manufacturers.  Tesla Motors is also building one of the largest lithium ion battery manufacturing facilities in the world to cut the cost of supplying batteries for their electric cars and to supply other users of lithium ion batteries.
  • NetSuite Inc. (NYSE N) provides cloud-based financials/enterprise resource planning (ERP) and omnichannel commerce software suites in the United States and internationally.  The company’s main product offering is NetSuite, a platform for financials/ERP, customer relationship management (CRM), professional services automation (PSA), and e-commerce capabilities that automates processes across departments; and NetSuite OneWorld to manage various companies or legal entities, with different currencies, taxation rules, and reporting requirements.

ARK Investment Management Proposed Disruptor Companies ETFs

ARK Investment Management is in the process of registering four Exchange Traded Funds (ETFs) that focus on disruptor technology segments.  The four proposed ETFs include:

  • The Ark Genomics Revolution ETF – a biotech fund that will focus on stocks that help to extend and enhance the quality of human and other life.
  • The Ark Industrial Transformation ETF – an energy fund that will seek to capitalize on industry shifts in the ways energy is stored, used, discovered, or collected.
  • The Ark Man + Machine ETF – a fund based on man capitalizing on and perhaps competing with the productivity of machines.
  • The Ark Technology-as-a-Service ETF – a fund that will invest in companies that are focused on shifting the bases of technology infrastructure from hard- and software into the cloud.

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