We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
Evogene Ltd. (EVGN)
Shares of Evogene rose 15% on Monday, participating in a broad market rally––disproportionately so perhaps because of its small market capitalization. Evogene is a diversified Israeli biotech company with subsidiaries focused on agriculture, cannabis, and pharmaceutical development.
Shares of Elbit, a leading Israeli drone company, traded up 15% on Monday following Russia’s invasion of Ukraine.
Shares of Tinkoff traded down 73% on Monday, 48% on Tuesday, and 37% on Wednesday as Russia intensified its invasion of Ukraine and Western countries began to isolate Russia with financial and other economic sanctions. Tinkoff reported fourth quarter earnings on Friday and provided an update on its operations in Russia. Currently, Tinkoff is in a solid financial position based on its liquidity and capital. It still is connected to SWIFT and is not on the Specially Designated Nationals and Blocked Persons list (SDN). The London Stock Exchange has suspended trading of TCS. LI, Tinkoff’s parent company. Based on its consumer-centric focus and its market share gains during past crises, we have confidence in Tinkoff’s management’s ability to overcome the impact of the current tragedy with time. That said, what happens to Russia’s economy in the short term is beyond Tinkoff’s control.
Shares of Intellia traded down 19% on Tuesday, pulling back from its 27% gain after the company reported earnings on Monday. The company released data demonstrating the efficacy of its gene editing therapy for the treatment of transthyretin-related hereditary amyloidosis (hATTR), including an average 93% reduction in the concentration of the mutant protein among the trial subjects––a significant improvement over existing hATTR therapies. Intellia is a next-generation biopharmaceutical company developing in- and ex-vivo gene therapies for the treatment of rare genetic diseases.
Shares of Kaspi traded down 31% on Wednesday as the effects of Russia’s attack on Ukraine rippled through Eastern Europe and Central Asia. Kaspi released fourth quarter earnings on Monday and confirmed that it has no meaningful exposure to sanctioned Russian financial Institutions.
Shares of Veeva Systems, a leading provider of enterprise cloud solutions for life science companies, traded down roughly 16% on Thursday following lower than expected revenue guidance during the company’s fourth quarter earnings call. ARK remains confident that Veeva’s emerging products, including ePro and eConsent, will catalyze growth in the coming quarters and years.
Shares of TuSimple traded down 21% on Thursday following the announcement that CTO Xiaodi Hou, one of the two founders of this autonomous trucking company, will replace CEO Cheng Lu. We have confidence in Xiaodi’s ability to execute on TuSimple’s autonomous strategy.
Shares of Recursion Pharmaceuticals traded down 16% on Friday after the company announced delays in its trial investigating a treatment for infantile GM2 gangliosidosis. We view the delay as prudent and maintain our positive thesis on the company. Recursion Pharmaceuticals is a clinical-stage drug discovery and development company taking advantage of the convergences between and among biology, chemistry, automation, machine learning, and engineering.
Shares of Snowflake fell 15% on Thursday after the company reported fourth quarter earnings on Wednesday afternoon. After reporting better than expected product revenue growth of 102% on a year-over-year basis, 178% net revenue retention, and 139% growth in the number customers contributing over $1 million in product revenue, management offered guidance for the first quarter and full year that revenues would increase 79% to 81% and 66% year-over-year, respectively, a meaningful deceleration from 106% revenue growth in 2021. If it maintains its high net retention rates and strong execution in enterprise upsell, we believe that Snowflake will remain a core software vendor as more enterprises transition to cloud-native formats. Snowflake provides cloud-based data platforms that enable customers to store, manipulate, and build on data no matter where it resides.