Should you Buy ArkX? **March 30 Release** [Cathie Wood's New ETF]

hey everyone me kevin here kathy wood

releases a brand new exchange traded

fund

tomorrow or since you might be watching

this tomorrow

on march 30 of 2021 and that is

ark x the space and innovation exchange

traded fund where the heck can you buy

it well

you could generally buy it anywhere you

could buy stock see etfs are publicly

traded

as if they're one stock but they're

really just a collection of stocks

it's kind of like a basket of stocks

kind of like an index fund

except it's an actively traded fund

which just means that rather than

tracking the same stocks pretty much all

the time kathy wood gets to decide

what stocks go in the basket and so

this fund promises to put 80 percent

of their holdings and money into things

related to space exploration

and innovation so basically anything

they want

now uh what we're going to do is we're

going to go through

the some of the top holdings in this

fund and then you'll get a better

understanding of

what the heck this fund is all about

i'll also go through

some of the earnings and i'll go through

this in a concise way just so you get an

idea of if you're interested

in investing in the arc x fund

i want you to in my opinion be aware of

what you're getting into

because it might not be exactly what

you're expecting but it could be good if

you're

expecting the right thing so let's let's

show you exactly

what you should be expecting okay so uh

the first thing that i'm going to do is

i just want to point out look you've

probably seen

this before at this point if you're

interested in arc invest i'm not going

to hang out on

this the entire time in fact i've got an

entire kind of a

flow chart that we're going to go

through here breaking down some of the

top companies in here for example

will break down what the heck is this

trimble what is this trimble that 8.47

of my money is going into what is this

3d printing etf oh they make 3d printing

printed stuff okay cool but who even

makes that etf

uh hint hint kathy so kathy's

putting your etf money that goes into

argex into another one of her etfs

kind of brilliant marketing honest i

have to say but

anyway then you've got you know defense

contractors in here

but you've also got things like nvidia

and john deere and amazon and google

and garmin the gps manufacturer and

if you keep scrolling enough you'll even

see things over here like

netflix and you'll even see 10 cent over

here

as well as workhorse which just lost

their

usps contract to oshkosh so you've

kind of got a little bit of a a

hodgepodge when you first

look at this it's like wait a minute how

do these all connect together like

i want spaceships and like intergalactic

warfare products notice that's different

from intergalactic warfare i don't

really want that

but products related to that that make

money hey sounds good to me okay so

easiest thing to do here is just start

at the top and let's grind through this

in order to grind through this i have to

say you're going to want to make sure

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close live streams okay

let's get into this okay so trimble you

know the company google

sketchup or that app google sketchup a

lot of you may have heard of that before

you kind of use it to usually like

design like your backyard or your house

or whatever you want

well trimble bought google sketchup and

that kind of gives you an idea of

trimble a little bit they work a lot in

building and construction in fact

40 of their money comes or their revenue

comes from civil engineering

commercial and industrial building 25

percent comes from trucking

and 20 comes from geospatial things

which is kind of like surveying

they make their own gps products they

make their own lasers for surveying

uh all their own optics and wireless

communication devices

so you can see kind of like the bulk of

their

existing book of business is kind of

just like

regular construction related things but

a small part of their business does have

to do with

gps and tracking vehicles and logistics

and one of the themes that i want you to

kind of like put into your memory bank

as we go through this

is existing businesses that are

lower on the risk scale that are more

established

but have like these small little embers

or

flames inside of them that could explode

into really profitable space

related industries in the future maybe

10 to 20 years in the future

so keep keep that sort of in the back

your mind and then see if you kind of

agree with that okay

so that this is trimble right now over

the last five years they've been

increasing their revenue except for in

2020 when they had a 3.6

decline kind of growing at like a seven

to eight percent clip so

not like really crazy much but they've

only got one percent short interest like

nobody's shorting this company nobody

actually expects this mature company to

go anywhere

it's a really mature anchor right low

bankruptcy risk

uh lots lots of cash but then i got to

my thing i think to myself like wait

what do they have to do with space and i

thought

you know the best thing i can really

think of here is is really lasers and

and surveying equipment and that gps

tracking

uh for logistics maybe in the future so

so we'll see

okay uh then we've got uh the next thing

is

the next biggest holding so this right

here was an 8.47

holding the next biggest holding was a

6.1

and this was the 3d printing etf which

is actually another arc invest fund

which do keep in mind most of kathy's

funds have an expense ratio which you

could read all about on their website of

about

uh a quarter or sorry three quarters of

one percent so that means for every

100 you're investing uh into

uh one of kathy woods funds you're

giving about

75 cents to kathy wood so for every

hundred dollars

75 cents to go into kathy okay so uh

this is another arc fund here so the

space exploration one and innovation

fund is

is 0.75 i'm not sure exactly what the 3d

printed one is but although i'm pretty

sure it's similar

the biggest holding in the 3d printed

fund is xone

which it makes up about 8.3 of the 3d

printed fund

what i did though is i kind of just

indicated them

as a relation to the size in the space

innovation fund

so really of the money you're putting

into the space innovation fund

you're only getting about half percent

exposure to zone

and then the other ones in the printing

edf etf you're getting like a third

percent exposure

so in other words if you put like a

hundred dollars into the space

etf you're getting uh 50

cents going to zone and they do 3d

printed machines for industrial

customers

they're projected to grow their revenue

actually by a good amount but they are

losing money

they make 3d printed in-house machines

kind of reminds me a little bit of like

a nano dimension

they got hewlett packard over here third

of one percent so really for every

hundred dollars you're putting into

kathy's fund you're really only seeing

33 cents go into

hp 33 cents going into approximately i'm

really rounding here

into straumann straumann does like 3d

printed dental

implants and things like that like i got

a little lost in terms of why

the 3d printed section is so high but it

is

we've got uh renee shaw this is uh i

believe this was a

uh this is oh yeah here we go so this is

a precision

measuring and calibration company so

they

try to make sure that your machinery

operates as

perfectly as it can so the way i picture

that is like if you have a machine

that's etching

uh like maybe a 3d printer that's

etching a 3d printed circuit board

you want to make sure that your 3d

printer is properly calibrated and this

company can help you manufacture

or basically have those tools so they

manufacture those tools to make sure

that your products are accurate

microsoft and then you've got another

little bit of trimbles in here so

the second line in the arc etf a little

bit threw me off because it's the 3d

printing etf right

and then you kind of have like this

miscellaneous hodgepodge of 3d printing

companies

but then we get to the interesting ones

so then we get to kratos defense

so they do a lot of it for the

government in fact

eighty percent of their sales come from

the government they also deal with

microwave electronic products

space training cyber security rocket

support services defense services

uh defense communications and more so if

you

put a hundred dollars into this arc

innovation and space etf you're putting

just to make this as simple as possible

you're putting about eight dollars and

47 cents into trimble that's that

commercial civil engineering one that

also does a little bit of the gps lasers

and stuff like that

6.1 are going into like these

miscellaneous kind of 3d printers

then you've got a five dollars and 62

cents

for every hundred dollars going into

this one now one of the things that's

cool here and i think this is probably

where the the long hope is

is they do a lot of work on uav products

in fact a lot of these companies if you

go to their website

the first thing like if you type into

google kratos defense are like these

these spacey starcraft-ish looking

airplane

that are like uh un unmanned planes

and it kind of makes me think of like

starcraft warfare

a little bit uh and and i think that's

kind of

like what they're trying to show off

like oh yeah we might be like

an old school defense company but don't

worry we can innovate as well and we can

get you

drones that can fight in the sky uh

the department of defense is basically

their biggest play payer

40 of their revenue comes from products

i'm sorry 60 comes from products

40 from services uh they also have a

satellite related products and services

like they do chips that go into

missile guidance systems i mean some of

this stuff is pretty intense

in fact i kind of thought about this

company as like this is my intergalactic

warfare company like yeah my missiles my

targeting systems

uh my my uavs i could go fly around and

be like my swarm that i release when i

push a button and go fight people in the

sky

i know that sounds a little childish but

like that's literally how i'm

simplifying like a potential future for

this company i hope we don't need it but

yeah

a forward pe of roughly 52 one of the

more expensive stocks out of this whole

fund

so out of your hundred dollars your next

four dollars and 97 cents uh would be

going into

the sixth largest defense contractor and

this company

l3 harris they do a lot of tac-com stuff

so tactical communications

radio communications for land sea air

space

and and cyber they said that 30

of their revenue comes from intelligence

and recon like advanced

sensors surveillance systems targeting

systems infrared targeting

space and airborne born segments are 25

and that's kind of cool that they broke

that out that way i think a lot of

people want to hear that okay yeah

how much is space related right uh and

that's 25 percent of l3 harris

space related complete earth observation

is the way they put that so

positioning antennas i imagine

satellites

these defense companies are really a

little bit vague sometimes

and maybe it's because they just do so

many different things but they also

provide the

next-gen warfare systems for f-16s like

this really makes me feel like very tony

stark-ish

uh you know i got to get my missiles and

kind of deliver those missiles

i i don't know it's a little bit what

these all feel like right

they're also discussing plans for like

autonomous autonomous

ships with like solar panels and they

can like basically drive themselves

these autonomous ships without a crew

i don't know there's some interesting

things their revenue grew like 100

in 2019 probably because they got a big

fat contract

and it's expected to grow only three to

five percent over the next two years

so that's usually what happens with

these big contracts like their revenue

goes through the roof and then and then

they kind of fulfill their contract

right

selling for about 18 times 2022 earnings

jd.com so i have to say this one threw

me off a little bit this reminds me of

like a blend between like an etsy and on

amazon.com

in china so they sell like appliances

computers maybe it's more like a walmart

i don't know

digital products clothing so people in

china

uh the the eps is estimated to be uh

2.75 dollars in 2022 so

you're paying like about 30 times future

earnings here

uh you know a lot of these companies

actually surprisingly low p e ratios

and it's in my opinion it's because

you're really getting like these mature

companies with the potential

to grow into space i don't know about

jd.com

honestly why 4.91 is going into the

space fund i have

no clue but then again remember this is

the space and innovation fund

and when you make an etf you do want to

have some balance too right like yeah

yeah these are going to be our space

winners but in the meantime we got to

have some winners up front too

and that's kind of why i think you'll

also see like the amazon the google and

the netflix it's like

maybe those could be our winners between

2020

uh one and like 2025 and then maybe our

space stuff will start

emerging and hatching so to speak okay

then we've got uh kamatsu this would be

your next four dollars and 56 cents

and this is a japanese this is kind of

in my opinion like a japanese john deere

or maybe like a plug power slash john

deere because they make

forklifts excavators bulldozers or maybe

even like a caterpillar

so kind of blend like caterpillar plug

and john deere

construction and mining equipment or

maybe more caterpillar probably more

caterpillar

but anyway uh their revenue declined

about 15 in 2020

and they're expected to decline through

the first part of 2021 so probably very

covet related

uh well yeah i wrote due to covet and

they are expecting about 10 growth in

2022. you're paying about 20 times 2022

earnings for this one

you know i guess you need excavators if

you go land on the moon or mars too

so you know maybe anywho then we've got

lockheed martin

one of the biggest global military

contractors a 4.47

of your 100 would go into lockheed

martin

the u.s government provides 71 percent

of revenue for this company

they make aircrafts uavs helicopters

satellite spaceships

ships uh spacecraft i guess they said

okay so because maybe like vessels that

bring satellites to the sky

or to space ships subs missiles

missile defenses f-35s f-35 fighter jets

by the way make up

25 of this company's sales uh forty

percent are all aeronautics related

with the c uh c130 also being produced

by lockheed martin

i've been in a c-130 those things are

awesome uh it's like a transport plane

i'm not sure i think you can you could

probably have a c130 bomber as well i'm

not i'm

actually not we should look that up

really quick oh could you have a c130

bomber

c130 bomber let's see

uh c130 yeah you can nailed it

check it out folks freaking nailed it

c130 is either a

cargo medivac troop transport but also

possibly a bomber

okay uh very very cool at least that's

what comes up when you type in c-130

bomber

oh look at that lockheed ac-130 gunship

heavily armed hercules oh freaking

awesome

but anyway so uh yeah okay so

uh of uh uh of your one hundred dollars

four dollars and forty seven cents we're

going into lockheed martin and of that

uh four dollars and forty seven cents

times point four

about a dollar seventy eight of every

100

you're investing goes into basically the

revenue of

like those c-130 bombers and transport

planes

uh anyway that's very cool 25 percent of

their revenue though is space related so

this is again where you can see a little

bit of that hatchling of space

remember the theme hatchling a space

with some other stuff like that that

chinese retailer and netflix and

google and and stuff like that uh and

john deere which john deere's in here as

well but anyway

uh 73 billion dollars of projected 2023

revenue which is 3.7

growth uh net income is actually 11

projected margin down a little bit but

actually pretty good margin honestly for

lockheed martin

very low future forward price to

earnings ratio 12.61

which is pretty dang low uh mostly

because limited growth i mean this is

a lot of large numbers here these guys

do like 70 plus

billion or will that's the projectionist

to do over 70 billion dollars

of of sales which is just like a huge

huge number

uh of sales like let's let's look at

apple's revenue here really quick let's

just type this in

apple revenue apple revenue

is 111 billion dollars and like we said

lockheed

martin just to compare revenue right now

is 59.8 billion dollars projected to go

up to

70 billion dollars in the future so

those are some big numbers

law of large numbers for sure then we've

got iridium communication so they do

mobile

satellite services low earth satellites

voice and data services

basically the best analogy i found was

if you want to make a phone call from

the north pole

because you're like a stranded soldier

you probably use iridium related

products or if you want to send a

missile to that stranded person

you probably would use iridium

communication

services main customer is the us

government

boeing operates and maintains iridium

satellite system 80

of revenue comes from mobile voice and

data services so i guess only eight

i guess 80 is more voice and data

services

maybe 20 is missiles yeah missiles uh

anyway not quite profitable yet growing

about four to seven percent per year

remember the growth rates are really

skewed at these companies though because

all it takes is a big fat contract

uh from from the government fails s a

so this was probably uh one of my more

challenging ones to really understand

what's going on here they do a lot

of uh oh so first of all three dollars

and ninety cents of your hundred dollars

would go into this one

they do a lot of like air traffic

control related products so i'm

imagining like

radar and calm products when you're

looking at like the front of an airplane

or air traffic control

but their website really pitches like

everything

like they have products on algorithms

for ai

crowd management autonomous trains

driverless trains i guess it's the same

thing a lot lots of things and they want

to grow into space communications like

they're

basically already trying to work with

like nasa to incorporate some of their

com

parts or hardware and software products

20

of their money goes into r d so you know

they've they're trying to really find

find their place it seems like it seems

like they really have their place and

aeronautics communications maybe that

reputation will carry over to

space-related communications which is

why they're kind of starting to work

with nasa it seems like

you've got boeings in here so out of

every hundred dollars you put in 3.48

goes into boeing

boeing makes apache helicopters missiles

munitions spacecraft

transporters i mean they make a ton of

crap like only

30 percent of their sails are things

like the boeing 747 or the

the air max or whatever uh you know the

plane that had the issues

the 737 max not the air max i'm thinking

of like the

the apple products the headphones sorry

anywho

defense space military security actually

makes up 45

of the revenue so when you hear boeing

almost half

comes from the defense department uh

actually probably more because if you

include 25

aerospace defense and then 25

for just defense and security and

missiles and munitions

i mean actually when you add it up like

that that's like 70 percent that's

coming from

the government here basically and the 30

are those commercial plane sales

you're paying about 43 times 20 22

revenues uh obviously had a rough

2020 but that's expected to come back in

2021 and then we'll go back to normal

growth

of a just a little under 10 per year is

the expectation

nvidia's in here which is another one of

those kind of hatchling companies where

you're like come on like

their graphic processing units make up

85 percent of the company's revenue

gaming is 50 of the whole total

but they do have this ai and vehicle

autonomous

segment which right now only makes up

like 10 of revenue but hey that could

explode

right now you're paying about 35 times

future 2023 earnings for this company

spirit aerosystems this is a holding

company and

they make fuselages and wings and motors

and engines for planes

like for example boeing apparently

doesn't actually make their own

fuselages

spirit aerosystems make some for boeing

i thought that was cool john deere think

farm and turf equipment harvesters 65

of their stuff is for agriculture turf

25 forestry and construction

uh they also have a little portion that

goes to like military-style tractors and

stuff like that

yeah i don't know why 3.1 dollars of my

money are going into john deere

and the space and innovation fund but

remember they said only 80 of the fund

has to go to

space and innovation so i i don't know i

i don't i don't think this falls in that

eighty percent

amazon i mean sure you could say this

falls in the innovation stuff we don't

have to really introduce amazon here

teradyne manufactures machines

that automate testing in manufacturing

so they what the the connection that i

found here really is

robotic arms that they actually do

industrial automation and robotic arms

but that segment is only 15 of their

revenue right now

the 70 of their their revenue comes from

the

sales of semiconductor testing equipment

then that tiny little part

that little ember is robotic arms

remember this

like it i'm telling you folks the theme

of this this uh index fund or not index

fund i'm sorry

the theme of this etf exchange traded

fund which yes you could get on robin

hood weeble and all that remember get

your two free stocks with libo

and sign up for block fi and get up to

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signing up over there as well just like

block five i recommend signing up for

both

anywho so paradigm uh yeah

very very thematic right old guard

companies fledgling

operations says the smaller part of

their company so

serve really good industrial purposes

but also have these small parts within

the company that's like oh yeah this is

our high-tech division

like this is this is the the blooming

you know this this part of our company

is going to be explosive

i you know honestly i wish i could just

do like a factory tour of all these

companies

maybe then it'd be like oh my gosh look

what they're making

you know anyway then you've got google

uh so 2.59 of every

one of your hundred dollars goes into

here this one was huge

the salt the soul it's probably like the

soul

i don't know something like that uh that

it's a french company and i kind of said

that like as japanese

i i don't know i don't know i'm not good

with accents okay

i'm making financial related content

here okay anywho

uh software to help innovation computer

aided design

software makes up like 80 plus percent i

think it's like 85 percent of what this

company does

and they've got a lot of software for

supply chain issues but honestly when

you go to their website

they just say they do everything like

hey you need help for mobility

households aerospace transportation

industrial equipment

we got solutions for you and i got a

little overwhelmed

so i kind of paused on that one we do

have garmin gps in here we got virgin

galactic in here each at about two bucks

uh and so this this you know then we

kind of go into the smaller holdings

uh some of the smaller ones again i mean

we got like workhorse in here now we're

getting into the really smaller ones

like

alibaba's in here airbus is in here

uh honeywell for for maybe um

you know filtration for space related

technologies

uh hvac right heating and air

conditioning

10 cent holdings is in here uh anywho uh

so you've got you've got a lot of uh

additional companies in here the big

thing to take away here

is is simply this and this is sort of my

takeaway so

make your own thoughts thoughts

obviously here but this is my takeaway

my takeaway is

this is a very long tail etf with

some current hot stocks included to

maybe try to bump the returns in the

short term

like let's throw in netflix and amazon

and google to help bump the short-term

returns

because it's probably going to be a

while for those little emerging

embers to to grow and explode into like

ah

space is very very profitable this if

this is not exactly like a pure space

play right

spacex for example would be a very pure

space play

this etf to meme feels a little bit like

10 space that could

in 15 20 years

end up being like 80 space because all

the companies have evolved

into space related products and like

those products have ended up blossoming

so you're really planting those seeds

here very very very early

uh but again it's this is not a pure

play like a spacex but you can't buy

spacex right

uh so or like virgin would potentially

be a little bit more of a pure play but

then again you have a lot of risk

because it's very early so

uh very dependent on government

contracts otherwise like in the near

term you're very dependent on government

contracts

trimble honestly a really good

infrastructure play i think it's

probably a better infrastructure play

than it is

a uh like a space play

which is not gonna be bad i mean biden

administration wants to spend four

trillion dollars on infrastructure so

why not

lots of government defense contracts

here some randos kind of like that

jd.com

a little random but hey they're growing

great i mean 20

plus per year so a very low pe stocks

and some of those developed companies

but again they've got those little

embers of growth

some kind of weird inclusions again i

think they're trying to just

make sure they have a fund that actually

just that this is like that does grow

it does have growth over the next few

years but i do think there is a future

where this could have more explosive

growth

i just don't know if i personally want

to ride with this for all those years

and uh i i don't know maybe like when

spacex comes out i just go all in over

there

in the meantime it's just like uh throw

it all in on tesla i i don't know

i personally i'm not an etf uh investor

i'm a big fan of picking my own but i

have to say i mean like out of the

stocks

here are there some that i would pick

that that i hadn't thought of before

yeah actually probably yeah here take a

look at this uh i'll

highlight these in red honestly trimble

kind of not bad i

i liked what i read about trimble kind

of like that one

uh you know quite frankly like if i was

going to get into some of these like the

lockheed martin or the kratos and the l3

like if i was gonna get into these

defense contractors

i mean they're they're inexpensive uh

and they've got uh they've got that

little potential

uh to really explode you know i mean

even even pterodyne was interesting

uh spirit aerosystem is the fuselage

company

i don't know much about i don't know

much about whose fuselage is better i

honestly i don't want to compare

fuselages okay like oh what their

fuselage is longer theirs is thicker i

mean like i

anyway uh you know i mean i like nvidia

right obviously i like amazon

uh you know i mean i like lots of these

kind of i don't know about workhorse i

kind of feel like workhorse needs a

little bit of a pump

uh i'm not saying that's why it's in

this but

you know anywho i'll just end it there

how about that

so if you found this helpful this

breakdown on what's in this

and uh what my opinion is of what you're

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