It’s been a roller coaster year for Robinhood users.
In 2020, a flood of new retail stock traders tried their hand at investing for the first time using the Robinhood trading app. Robinhood’s payment for order flow revenue jumped from $111 million in 2019 to $682 million in 2020. Some of the top-performing stocks in the market in 2020 were among the most popular Robinhood holdings. Robinhood users have gotten negative press in 2021 for their enthusiasm for so-called “meme” stocks, but some of the most commonly owned Robinhood stocks are high-quality, blue-chip companies. Here are the eight most popular stocks owned by Robinhood users.
Ford (ticker: F)
Tesla (TSLA) has been the most talked-about auto stock in the past couple of years, but Ford is the top holding among Robinhood users in the second quarter. Ford shares trade at just 0.4 times sales compared to a 21 price-to-sales ratio for Tesla. Robinhood users may be bullish on Ford as a future play on electric vehicles. The recent launch of the Ford Mustang Mach-E EV was a huge success, and Ford is investing $22 billion in electric and autonomous vehicle technology. F stock has paid off so far in 2021, gaining almost 50% year to date.
EV stocks have been one of the hottest investing trends on Wall Street in the past year, and Tesla has been one of Robinhood users’ biggest winners. Tesla reported 28.3% revenue growth in 2020 in an extremely difficult global auto sales environment as the company continues to build its international presence. After gaining around 700% in 2020, Tesla has taken a breather so far in 2021, down more than 5% year to date. Tesla still accounts for only a small fraction of worldwide auto sales, but its $656 billion market capitalization makes it the world’s most valuable auto company.
The health crisis certainly didn’t slow down Apple in 2020. Last year, the iPhone maker generated $57.4 billion in net income and grew revenue by 5.5% to $274.5 billion. The stock also earned Robinhood investors an 80.7% return last year. Like Tesla, Apple shares have gone down this year, dropping around 2% year to date. However, the company’s shift to a high-margin recurring services revenue model and its aggressive stock buybacks make the stock a cash cow for investors. In fact, Apple is the most popular tech stock among Robinhood users in the second quarter.
Sundial Growers (SNDL)
There have been plenty of tailwinds for cannabis stocks since the November presidential elections. Sundial Growers reported a 4% drop in net revenue in 2020, yet its stock price is up more than 350% in the past six months. The company’s $2.16 billion market cap means the stock is trading at 47 times sales. Meanwhile, Sundial’s share count has increased by more than 1,450% in the past year. Still, U.S. legalization may be a huge long-term bullish catalyst for cannabis stocks. Robinhood investors are betting aggressively on Sundial, which is one of the highest-risk cannabis stocks.
AMC Entertainment Holdings (AMC)
Other than GameStop (GME), AMC has been the most popular stock targeted by the Reddit WallStreetBets community in 2021. Coordinated buying efforts by communities of online retail traders have triggered short squeezes in many of these “meme” stocks, sending AMC’s share price soaring from below $2 in early January to above $20 during the peak of the short squeeze. Unfortunately, AMC reported a $4.5 billion net loss in 2020, and its share count has more than tripled in the past year. AMC now has roughly $12 billion in debt, but Robinhood investors still like the stock.
NIO is one of the most popular ways for Robinhood investors to gain exposure to the potentially massive EV market in China. In 2020, NIO reported impressive 108% revenue growth, but it still delivered just 31,430 vehicles for the entire year. Given its market cap of around $60 billion, company shares currently trade at more than 25 times sales — an even higher valuation than Tesla. In 2020, NIO shares rallied more than 1,100%, but they are down 30% year to date. However, Robinhood investors seem to be holding on for the long haul.
General Electric (GE)
Industrial giant General Electric proves Robinhood investors aren’t all about high-flying tech disrupters and meme stocks. GE is still undergoing a multi-year turnaround process that has included selling off non-core assets and shoring up the company’s balance sheet. The latest chapter in GE’s turnaround story was the March sale of its aircraft leasing business to AerCap for $30 billion. A $200 million settlement with the U.S. Securities and Exchange Commission back in December also put to rest a multiyear investigation into questionable accounting by GE’s insurance business, potentially setting the stage for a much better chapter in GE’s history.
The Walt Disney Co. (DIS)
Disney had a very mixed exposure to the global health crisis. Disney’s theme parks, cruise lines and film and TV production businesses took a big hit during the economic shutdown. However, a shelter-in-place environment could not have been better for Disney’s streaming service Disney+, which launched in November 2019. In February, Disney reported 94.9 million Disney+ subscribers. Movie theater reopenings, pent-up theme park demand and a return to normal sports seasons could all be bullish catalysts for Disney in 2021. So far this year, Robinhood investors are up almost 6% on their DIS stock holdings.
Eight Robinhood stocks investors are buying in the second quarter:
— Ford (F)
— Tesla (TSLA)
— Apple (AAPL)
— Sundial Growers (SNDL)
— AMC Entertainment Holdings (AMC)
— NIO (NIO)
— General Electric (GE)
— The Walt Disney Co. (DIS)
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