Megaphone icon ETF Database is now VettaFi. Read More >
ETFdb Logo
ETFdb Logo
  • Channels
    • Active ETF
    • Alternatives
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Disruptive Technology
    • Dividend
    • Dual Impact
    • Emerging Markets
    • Energy Infrastructure
    • Entrepreneur ETF
    • Equity ETF
    • ESG
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Fixed Income
    • Future ETFs
    • Gold & Silver Investing
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Modern Alpha
    • Multi-Asset
    • Multi-Factor
    • Nasdaq Investment Intelligence
    • Portfolio Strategies
    • Retirement Income
    • Smart Beta
    • Thematic Investing
    • Volatility Resource
  • Database
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
    • ETF Data for Journalists
    • ETF Nerds
  • Research
    • First Bitcoin ETF
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
    • ETFs Future-Forward 2021: An iShares Investing Symposium
    • Three Themes for 2021: An iShares & MSCI Investing Symposium
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Videos & Podcasts
    • ETF 360 Video Series
    • ETF Trends on Videos
    • ETF Trends on Podcasts
    • ETF Prime Podcast
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Disruptive Technology Channel
  2. There’s Some Value In Growth Stocks
Disruptive Technology Channel
Share

There's Some Value In Growth Stocks

Tom LydonMar 04, 2022
2022-03-04

Amid first-quarter struggles for growth stocks, some members of this category are trading at discounts relative to their histories of often lofty valuations.

Perhaps surprisingly, some names with the disruptive growth label are in the discounted growth stock conversation. That includes some members of the ARK Innovation ETF (ARKK ).

The actively managed ARKK is one of the ETF pioneers in terms of making disruptive growth investing more accessible to a wider audience of market participants. The fund is usually comprised of mid-cap and smaller large-cap stocks with significant long-term growth potential. As such, rare are the occasions that ARKK member firms are attractively valued.

That’s simply the price of admission, but amid fears that rising interest rates will make the longer-term cash flows of innovative growth firms less compelling, some growth stocks, including some ARKK holdings, are languishing. However, the silver lining in that scenario is that some growth names now offer discounts.

“The result is that U.S. stocks have gone from broadly overpriced to fairly valued, based on valuation estimates for stocks covered by Morningstar’s equity analysts,” says Morningstar analyst Dave Sekera. “The most notable change has been in growth stocks. Shares of the fastest-growing companies had also tended to be the most overvalued. But now that category has become undervalued, and is even more attractive than value stocks.”

Among the ARKK holdings that Morningstar sees as currently undervalued are telehealth leader Teladoc (NYSE:TDOC) and cloud computing firm Twilio (NASDAQ:TWLO). Teladoc is the ETF’s second-largest holding at a weight of 6.91%, while Twilio accounts for 4.22% of the ARKK roster.

“These stocks then crashed back to earth in 2021 in many cases falling over 50+% from their highs. The downward momentum has now brought many of these companies deep into undervalued territory and we rate a number of them with 4- and 5-stars. Teladoc, Palantir, Twilio, and DocuSign fall into this category,” adds Sekera.

While not necessarily a deeply discounted name as of yet, DraftKings (NASDAQ:DKNG) — 2.79% of ARKK — said on Thursday that it sees a total addressable market for North American iGaming and online sports wagering of up to $80 billion, well ahead of a prior forecast of $67 billion.

The gaming company made those comments during its investor day while also highlighting strong customer retention and a solid outlook for market share.

For more news, information, and strategy, visit the Disruptive Technology Channel.

Loading Articles...
Help & Info
  • Contact Us
  • Mission Statement
  • Press
Tools
  • ETF Screener
  • ETF Analyzer
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Performance Visualizer
  • ETF Database Model Portfolios
  • ETF Database Realtime Ratings
  • ETF Database Pro
More Tools
  • ETF Launch Center
  • Financial Advisor & RIA Center
  • ETF Database RSS Feed
Explore ETFs
  • ETF News
  • ETF Picks of the Month
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Best ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Legal
  • Terms of Use and Privacy Policy
  • © ETF Flows LLC
Follow ETF Database
Follow ETF Database

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

Equity ETF Channel

Retirement Portfolio Redux: Is the 60%-40% Portfolio Dead?

Debbie CarlsonOct 22, 2020
2020-10-22

With the 10-year U.S. Treasury yield hovering below 1% and Federal Reserve Chairman Jerome Powell...

Equity ETF Channel

Portfolio Diversification Isn't Dead, It Was Just Sleeping

Debbie CarlsonOct 15, 2020
2020-10-15

Investors could be forgiven to think there was no reason to invest outside of the U.S. for the...

}
X