VERV

Wall Street Favorites: 3 Cathie Wood Stocks With Strong Buy Ratings for May 2024

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The ARK Innovation ETF (NYSEARCA:ARKK) has come under the spotlight recently, and there are three Cathie Wood stocks to buy with strong buy ratings for investors to consider in May this year.

One of the key characteristics of the ARK Innovation ETF is its concentrated portfolio, typically holding between 35 to 55 stocks. This approach allows the fund to make significant investments in companies that ARK Invest believes have the potential to revolutionize their respective industries. However, this concentration also comes with a higher level of risk compared to more diversified funds.

The ETF has gained popularity among investors who believe in the long-term potential of disruptive technologies and are willing to accept the volatility that comes with investing in high-growth companies.

So with that being said, here are three Cathie Wood stocks that have strong buy ratings as of May this year.

Verve Therapeutics (VERV)

An image of a scientist holding forceps, taking a piece of a DNA helix

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Verve Therapeutics (NASDAQ:VERV) is focused on developing gene-editing therapies to treat cardiovascular diseases. The company is pioneering a new approach using base editing technology to transform the treatment of heart disease by addressing its underlying genetic causes.

For 2023, Verve reported a net loss of $200.1 million, reflecting a 27% increase from the previous year, driven by higher research and development expenses. Despite these losses, the company achieved significant revenue growth, reporting $11.8 million in 2023, up from $1.94 million in 2022​.

In 2024, Verve plans to advance its pipeline with several key initiatives. The company aims to complete enrollment for the Heart-1 trial, which evaluates VERVE-101, by the end of the year and provide a data update in the second half of 2024. 

Additionally, Verve has initiated the Heart-2 Phase 1b clinical trial of VERVE-102 and expects to start a Phase 1b trial for VERVE-201 in the second half of 2024.

VERV has a consensus Strong Buy rating from seven analysts and a predicted upside of 420.55% over the next twelve months.

Prime Medicine (PRME)

Gene editing stocks: a concept image of a hand holding a pair of tweezers that is pulling a section off of a dna strand

Source: vxhal/ShutterStock.com

Prime Medicine (NASDAQ:PRME) is engaged in the development of a more advanced gene-editing technology called prime editing. This method aims to precisely edit DNA without cutting it, offering potential treatments for a range of genetic disorders.

ARKK holds 2,591,955 shares of PRME, which accounts for 0.25% of its total weighting. 

In 2024, the company plans to initiate an IND application for PM359, targeting Chronic Granulomatous Disease (CGD), with clinical trials expected to start later in the year. Additionally, Prime Medicine is advancing its Shielded Hematopoietic Stem Cell (HSC) and Immunotherapy Pairs (SCIP) technology, and plans to establish proof-of-concept for these approaches within the year.

The company also aims to continue preclinical studies for its liver programs and initiate IND-enabling activities for at least one liver program in 2024, targeting an IND or clinical trial application by 2025.

The ratings of nine analysts have contributed to PRME’s strong buy rating and it has an implied upside of 141.57%.

Exact Sciences (EXAS)

A variety of pills, pill bottles, and droppers arranged on a table in multiple bright colors.

Source: Shutterstock

Exact Sciences (NASDAQ:EXAS) specializes in cancer diagnostics and has leveraged AI to enhance its early detection capabilities. The company’s flagship product, Cologuard, is a non-invasive test for colorectal cancer screening.

In the first quarter of 2024, Exact Sciences reported revenue of $637.5 million, a 5.8% increase from the same period in 2023. However, the company faced a net loss of $110 million, or $0.60 per share, which was deeper than the previous year’s loss.

The company is also preparing for the FDA approval and commercialization of Cologuard Plus, which incorporates novel biomarkers and improved laboratory processes​. Additionally, Exact Sciences is advancing its Precision Oncology portfolio, including the Oncotype DX Breast Recurrence Score.

EXAS has a strong buy rating, which is a consensus from twelve analysts. It also has a consensus upside of 69.52% at the time of writing.

In conclusion, if one wants to choose one of those Cathie Wood stocks to buy in the biotech sector, then VERV, PRME, or EXAS could be the winning ticket.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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