Investors Are Buying These 8 Robinhood Stocks in Q2.
This is the most recent batch of highly rated Robinhood stocks.
Robinhood users have had a wild ride of a year.
In 2020, a wave of new retail stock traders used the Robinhood trading app for the first time to try their hand at investing. Robinhood's revenue from payment for order flow increased significantly in 2020, from $111 million in 2019 to $682 million in 2020. Several of the market's best-performing stocks in 2020 were among the most successful Robinhood holdings. In 2021, Robinhood users received negative press for their enthusiasm for so-called "meme" stocks, but many of the most common Robinhood stocks are high-quality, blue-chip companies. The eight most common stocks owned by Robinhood users are listed below.
Ford Motor Company (ticker: F)
Though Tesla has been the most talked-about auto stock in recent years, Ford is the second-most common holding among Robinhood users in the second quarter. Ford shares trade at 0.4 times earnings, compared to Tesla, which trades at a price-to-sales ratio of 21. Users of Robinhood could be bullish on Ford as a potential electric vehicle play. Ford's recent Mustang Mach-E EV launch was a big success, and the company is investing $22 billion in electric and autonomous vehicle technology. F stock has performed well so far in 2021, gaining nearly 50% year to date.
Electric vehicle stocks have been one of Wall Street's hottest trading trends in the last year, and Tesla has been one of Robinhood's biggest winners. Tesla recorded 28.3 percent revenue growth in 2020, despite an increasingly challenging global car sales market, as the company continues to expand its international footprint. Following a gain of approximately 700 percent in 2020, Tesla's stock has taken a breather so far in 2021, falling more than 5% year to date. Tesla only accounts for a small percentage of global car sales, but with a market capitalization of $656 billion, it is the world's most profitable automaker.
Apple's 2020 growth was unaffected by the health crisis. Apple earned $57.4 billion in net profits last year and increased sales by 5.5 percent to $274.5 billion. Additionally, the stock returned 80.7 percent to Robinhood investors last year. Apple shares, like Tesla, have declined this year, falling around 2% year to date. However, the company's transition to a high-margin recurring services business model, coupled with its aggressive stock buyback program, has turned the stock into a cash cow for investors. Indeed, in the second quarter, Apple was the most common technology stock among Robinhood users.
Growers of Sundials (SNDL)
Since the November presidential polls, cannabis stocks have enjoyed a slew of tailwinds. Sundial Growers announced a 4% decline in net sales for 2020, despite a more than 350% increase in its stock price over the last six months. With a market capitalization of $2.16 billion, the stock trades at 47 times earnings. Sundial's share count, meanwhile, has risen by more than 1,450 percent over the last year. Nonetheless, legalization in the United States may be a significant long-term bullish catalyst for cannabis stocks. Investors at Robinhood are betting heavily on Sundial, one of the most risky cannabis stocks.
Holdings AMC Entertainment (AMC)
Apart from GameStop (GME), AMC has become the most common stock on the Reddit WallStreetBets community's 2021 goal list. Coordination of buying activities by groups of online retail traders caused short squeezes in a number of these "meme" stocks, propelling AMC's share price from below $2 in early January to above $20 during the short squeeze's peak. Regrettably, AMC posted a net loss of $4.5 billion in 2020, and its share count has more than tripled in the last year. While AMC is now around $12 billion in debt, Robinhood investors continue to like the stock.
NIO is a common way for Robinhood investors to gain exposure to China's potentially large electric vehicle market. NIO posted impressive sales growth of 108 percent in 2020, but delivered only 31,430 vehicles during the year. With a market capitalization of about $60 billion, the company's shares are currently trading at more than 25 times earnings – a price that exceeds Tesla. NIO shares rallied more than 1,100% in 2020, but are down 30% year to date. However, it seems as if Robinhood investors are in it for the long haul.
General Electric (GE)
Industrial behemoth General Electric demonstrates that Robinhood investors are not exclusively interested in high-flying technology disruptors and meme stocks. GE is now in the midst of a multi-year restructuring effort that has involved the divestiture of non-core assets and the strengthening of the company's balance sheet. The latest chapter in GE's turnaround story came in March with the $30 billion sale of its aircraft leasing company to AerCap. A $200 million settlement with the US Securities and Exchange Commission in December also brought an end to a multiyear inquiry into GE's insurance business's dubious accounting practices, hopefully paving the way for a much brighter chapter in the company's history.
The Walt Disney Company (DIS)
Disney's response to the global health crisis was extremely mixed. Disney's theme parks, cruise ships, and film and television production companies all suffered significant losses during the closure. However, a shelter-in-place setting was ideal for the launch of Disney's streaming service Disney+ in November 2019. Disney announced 94.9 million Disney+ subscribers in February. Reopenings of movie theaters, pent-up demand at theme parks, and the return of regular sports seasons could all serve as bullish catalysts for Disney in 2021. Robinhood investors have gained nearly 6% on their DIS stock holdings so far this year.