Cathie Wood Is Loading Up on Ionis Pharmaceuticals (IONS) Stock. Here’s the Bet She’s Making.
Many investors are keenly interested in growth stocks and want to know which are the most promising ones. Many also keep an eye on what famous investors are buying — or selling. One famous growth-stock investor is Cathie Wood, founder, CEO, and chief investment officer of Ark Invest, known for investing in companies with disruptive and innovative technologies.
A recent move Wood’s Ark Invest made is drawing some attention: Wood bought a bunch of Ionis Pharmaceuticals (IONS -1.22%) — a stock that trades down more than 28% year to date (as of Sept. 8).
Ark Invest CEO Cathie Wood. Image source: Getty Images.
Meet Ionis Pharmaceuticals
Ionis Pharmaceuticals is known for its technologies that use small sequences of modified RNA to precisely target and interact with RNA and DNA to treat genetic diseases. The company has been around for 30-some years and offers medicines on the market and in its pipeline targeting neurologic and cardiometabolic diseases, among other conditions.
A key recent bit of news regarding Ionis is that in July, after the stock had more than doubled over the past year, it suffered a setback — due to disappointing news about two of its treatments in development.
Today’s Change
(-1.22%) $-0.69
Current Price
$56.02
Key Data Points
Market Cap
Day’s Range
$55.70 – $56.96
52wk Range
$50.01 – $86.74
Volume
3M
Avg Vol
3.1M
Gross Margin
95.66%
Why would Cathie Wood buy Ionis now?
Ionis has a lot more going on than those two formulations. For example, in its second quarter, it reported revenue up 56% year over year, excluding a one-time payment. Its Tryngolza treatment is on track to achieve full-year revenue of $100 million to $110 million in 2026, while its Dawnzera treatment is on track to generate $110 million to $120 million in revenue. Both have international launches underway, which can boost revenue.
The company is also pivoting from being a company that mainly researches and develops treatments before partnering with deep-pocketed, bigger pharmaceutical companies to bring them to market — to one that does that latter work itself. That can pay off handsomely for the company, but it can also be costly.
These factors are likely among the reasons Cathie Wood is buying. It’s worth noting, too, that after first buying in 2016, per stockcircle.com, she has bought shares 14 more times and sold 22 times.
That’s a lot more trading activity than seems prudent for us individual investors. I have personally done best by investing in companies I believe in and then hanging on for years, if not decades.
Should you invest in Ionis?
You could buy the stock. There are ample reasons to be hopeful about it. And its share price and valuation now are lower than they were a few months ago. But keep in mind:
- The stock’s valuation doesn’t exactly look cheap at recent levels, with a price-to-sales ratio of 10.8, well above the five-year average of 8.1. (Of course, its prospects arguably look better now than five years ago.)
- The second quarter’s bottom line featured a net loss, not net income.
- It also featured a 23% drop in cash and equivalents, to about $2 billion.
- The stock offers no dividend, in case you’re a dividend aficionado.
Go ahead and take a closer look at Ionis Pharmaceuticals, but don’t just jump in because Cathie Wood did. Remember that she may well be selling some shares over the next quarter.
