In this article, we will be taking a look at 10 Robinhood stocks to buy that are too cheap to ignore.
Robinhood, a commission-free stock trading and investing company, has gained popularity in the investing world particularly among beginner investors because of the relative ease it offers when it comes to trading stocks. The company and its trading platform have been the subject of controversy among more experienced investors, who argue that it has made more complex trading strategies, like options trading, far too accessible to users and traders who are too inexperienced. However, the accessibility offered by the company has managed to drown out most objections to its existence so far, making Robinhood a trading platform that cannot go ignored by any investor.
The company has long been offering more than just a trading platform to its users. It also offers beginner investors resources to get them acquainted with the art of stock trading. In doing so, it often highlights popular stocks that are currently performing well, or are expected to perform well in the near future. Some of the more renowned stocks mentioned on the platform include General Motors Company (NYSE:GM), Ford Motor Company (NYSE:F), and DraftKings Inc. (NASDAQ:DKNG). Robinhood has achieved notoriety for its offer of easy access to the investing world. Additionally, it is the company that made free trades a trend in investing today, offering traders the option to make trades without any extra cost. According to the Wall Street Journal, in 2019, the number of user accounts on Robinhood grew to 13 million.
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Our Methodology
We picked some of the notable cheap stocks currently popular on the Robinhood platform. All but one of these stocks are currently trading at share prices below $20. The stocks are demonstrating immense growth potential based on fundamentals such as EBIT guidance, revenue growth, and business expansions, among more. They are ranked based on the number of hedge funds holding stakes in them, from the lowest to the highest, based on Insider Monkey’s hedge fund data for the third quarter of 2022.
Robinhood Stocks To Buy That Are Too Cheap To Ignore
10. ChargePoint Holdings, Inc. (NYSE:CHPT)
Number of Hedge Fund Holders: 13
Share Price as of November 28: $11.99
ChargePoint Holdings, Inc. (NYSE:CHPT) is an electrical components and equipment company. It provides electric vehicle charging networks and charging solutions in the US and internationally. The company offers hardware, software, and services for commercial, fleet, and residential customers, and it is based in Campbell, California.
A Buy rating was reiterated on ChargePoint Holdings, Inc. shares on November 7 by analyst Christopher Souther at B. Riley. The analyst also placed an $18 price target on the stock.
ChargePoint Holdings, Inc. is an up-and-coming Robinhood stock expected to perform well through 2025. The company is expanding its top-line growth while narrowing its losses at the same time. The stock has fallen by 72.06% as of this November, making now a good time to buy in while it is cheaply valued. By this October, ChargePoint Holdings, Inc. was operating over 200,000 charging points in North America and 16 European Union countries, showing an increase of 64.49% year-over-year in its installed base of network ports. The company’s aggressive approach towards the growth of its business and rising demand for electric vehicles place it in the best position for higher profitability in coming years.
ChargePoint Holdings, Inc. was found among the 13F holdings of 13 hedge funds in the third quarter, with a total stake value of $71.7 million.
ChargePoint Holdings, Inc., like General Motors Company, Ford Motor Company, and DraftKings Inc., is a Robinhood stock elite hedge funds have begun piling into this year.
9. Lucid Group Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 15
Share Price as of November 28: $10.02
Lucid Group Inc. (NASDAQ:LCID) is an automobile manufacturer developing electric vehicle technologies. It is based in Newark, California, and designs, engineers, and builds electric vehicles, EV powertrains, and battery systems. The company operated 20 retail studios in the US by December 2021.
On November 10, R.F. Lafferty’s Jaime Perez reiterated a Buy rating on Lucid Group Inc. shares, alongside placing a $17 price target on the stock.
Lucid Group Inc. is one of the best stocks highlighted on the Robinhood platform. The company is considered to be an undervalued hypergrowth stock in the lucrative EV segment, with significant revenue growth potential. It is expected to hit $750 million in revenues in 2022, while 2023’s revenues are set to rise to $2.6 billion, showing a roughly 250% year-over-year gain. If Lucid Group Inc. produces 400,000 vehicles annually, it could achieve $30 billion in annual revenues just from its car production.
There were 15 hedge funds long Lucid Group Inc. in the third quarter, and 16 hedge funds long the stock in the previous quarter. Their total stake values were $99.5 million and $173 million, respectively.
8۔ Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX)
Number of Hedge Fund Holders: 18
Share Price as of November 28: $16.97
Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) is a healthcare and biotechnology company operating on the commercial stage. The company works to develop and commercialize therapies for people with rare debilitating, chronic neuromuscular, and neurological diseases in the US. It is based in Coral Gables, Florida.
Joseph Catanzaro, an analyst at Piper Sandler, raised his price target on Catalyst Pharmaceuticals, Inc. from $16 to $18 on November 10. The analyst also reiterated an Overweight rating on the stock.
One of the company’s major projects is the drug Firdapse, which treats patients with the lambert-eaton myasthenic syndrome (LEMS). This medicine has seen immense success in the US, with its sales growing by 59.3% year-over-year in the third quarter, bringing in about $57.2 million. The company’s diluted earnings per share are $0.48, trailing three months, and it has a strong profit margin near 39.74%, which widened substantially in the past year. Catalyst Pharmaceuticals, Inc. is considered to be a highly undervalued stock in the market today, with expectations for net income growth.
Deerfield Management was the largest stakeholder in Catalyst Pharmaceuticals, Inc. in the third quarter, holding 4.9 million shares worth $62.8 million. In total, 18 funds were long the stock, with a total stake value of $189 million.
7۔ MFA Financial, Inc. (NYSE:MFA)
Number of Hedge Fund Holders: 19
Share Price as of November 28: $11.11
MFA Financial, Inc. (NYSE:MFA) is a mortgage real estate investment trusts company operating in the US and based in New York. The company invests in residential mortgage assets including non-agency mortgage-backed securities, agency MBS, and credit risk transfer securities, among more.
RBC Capital’s Kenneth Lee holds a Sector Perform rating on MFA Financial, Inc. shares as of November 25.
Being a real estate company, MFA Financial, Inc. has a significant dividend payout ratio of 123.4%. The company announced a $0.44 per share quarterly dividend this September. Its capacity for generating a high yield got a boost through its acquisition of Lima One, a US-based premier lender. Now is the perfect time to buy MFA Financial, Inc. shares at a bargain since the company’s stock price has been on the decline since its reverse stock split in April. Since the company is a specialty finance corporation with a strong portfolio including assets such as 43% of non-qualified mortgage loans and 23% of business purpose loans, it is only a matter of time before the stock begins an upwards climb again.
In total, 19 hedge funds were long MFA Financial, Inc. in the third quarter. Their total stake value was $98.2 million. In comparison, 15 hedge funds were long the stock in the previous quarter, with a total stake value of $152 million.
6۔ Plug Power, Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 32
Share Price as of November 28: $15.73
Plug Power, Inc. (NASDAQ:PLUG) is an electrical components and equipment company based in Latham, New York. The company delivers end-t0-end clean hydrogen and zero-emissions fuel cell solutions for supply chain and logistics applications, on-road EVs, stationary power markets, and others in North America and internationally.
P.J. Juvekar at Citigroup reiterated a Buy rating on Plug Power, Inc. shares on November 10, while placing a $20 price target on the stock.
This November, analysts began considering the time as ripe for investing in Plug Power, Inc.. The company has posted a five-year total return CAGR of 41.2%, outperforming the broader market which was on a steep decline of 43.39%. Plug Power, Inc. is also well-capitalized with a net cash position of $2.29 billion. Analysts hold revenue estimates for the company through 2026 much closer to the company’s own guidance of $5 billion, as they see more credibility in its ability to execute its promises.
Citadel Investment Group was the largest stakeholder in Plug Power, Inc. in the third quarter, out of a total of 32 hedge funds long the stock. The fund held 118.5 million shares in the company. The total stake value of all hedge funds long the stock was $373 million.
Plug Power, Inc., like General Motors Company, Ford Motor Company, and DraftKings Inc., is a cheap Robinhood stock to good to pass up this year.
5. Energy Transfer L.P. (NYSE:ET)
Number of Hedge Fund Holders: 33
Share Price as of November 28: $12.36
Energy Transfer L.P. (NYSE:ET) is an energy company based in Dallas, Texas. The company owns and operates about 11,600 miles of natural gas transportation pipeline, and three natural gas storage facilities in Texas, alongside two more facilities in Texas and Oklahoma.
An Overweight rating was reiterated on Energy Transfer L.P. shares on October 19 by analyst Robert Kad at Morgan Stanley. A price target of $17 was also placed on the stock.
Energy Transfer L.P. is among the cheapest options in the high-yield midstream business today. The company is larger and better diversified than its competitors. In its third-quarter results, it showed solid progress towards deleveraging its balance sheet, showing over $2.3 billion in total available liquidity under its revolving credit facility.
There were 33 hedge funds long Energy Transfer L.P. in the third quarter. Their total stake value was $614 million.
4. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 34
Share Price as of November 28: $15.14
DraftKings Inc. is a casino and gaming company operating a digital sports entertainment and gaming business. It is based in Boston, Massachusetts.
Joseph Stauff at Susquehanna holds a Positive rating and a $19 price target on DraftKings Inc. shares as of November 22.
This November, Morgan Stanley named DraftKings Inc. as one of the gaming sector’s standouts. The stock was named the top overall sector pick with a 34% upside for its base case. Piper Sandler’s bullish Overweight rating on the stock placed the same month also resulted in the stock rallying 3.55% premarket to $15.44.
DraftKings Inc. was found among the 13F holdings of 34 hedge funds in the third quarter, with a total stake value of $830 million.
3. Palantir Technologies Inc. (NYSE: PLTR)
Number of Hedge Fund Holders: 35
Share Price as of November 28: $7.28
Palantir Technologies Inc. (NYSE: PLTR) is an information technology company building and deploying software platforms for the intelligence community in the US. The company’s work assists in counterterrorism investigations and operations.
Palantir Technologies Inc. is considered to be a revolutionary company in the data sector, offering its customers the chance to benefit from the ability to generate synergies from its side. Now is the perfect time to buy in the company, as the stock’s share price has dropped almost 80%, while it still represents an impressive portfolio of software assets and growth potential. The company outperformed in the third quarter, with its revenue growing by 22% year-over-year to $478 million, US revenue alone growing by 31% year-over-year to $297 million, and its government business surpassing the $1 billion revenue mark on a trailing three months basis.
Our hedge fund data shows 35 funds long Palantir Technologies Inc. in the third quarter, with a total stake value of $431 million.
2. Ford Motor Company (NYSE:F)
Number of Hedge Fund Holders: 47
Share Price as of November 28: $14.08
Ford Motor Company is an automobile manufacturer based in Dearborn, Michigan. The company designs and manufactures a range of Ford trucks, cars, sport utility vehicles, EVs, and Lincoln luxury vehicles.
On October 27, analyst Adam Jonas reiterated an Overweight rating on Ford Motor Company.
In the third quarter, Ford Motor Company reported strong results beating consensus estimates on the topline and lifting its full-year EBIT guidance. The company’s EPS was $0.30, in line with estimates, while its revenue from automotive was $37.2 billion, showing an annual growth of 12% and beating estimates by $90 million. The company has also lifted its 2022 outlook, raising its EBIT guidance to $11.5 billion, demonstrating a 15% growth year-over-year.
In total, 47 hedge funds were long Ford Motor Company in the third quarter. Their total stake value was $1.2 billion.
1. General Motors Company (NYSE:GM)
Number of Hedge Fund Holders: 74
Share Price as of November 28: $40.46
General Motors Company is another automobile manufacturer on our list. It is based in Detroit, Michigan.
Rod Lache, an analyst at Wolfe Research, holds a Peer Perform rating on General Motors Company as of November 10.
General Motors Company reported exemplary top and bottom-line growth quarter-over-quarter and year-over-year in the third quarter, with its sustained gross margins of 14.1% against 14.4% in the third quarter of 2021. The company boosted its EPS to $2.25 against estimates of $1.88. Its free cash flow generation was also impressive, standing at $0.23 billion and showing a notable improvement from the previous quarter.
Our hedge fund data shows 74 funds long General Motors Company in the third quarter. Their total stake value was $3.3 billion.
Diamond Hill Capital, an investment management company, mentioned General Motors Company in its third-quarter 2022 investor letter. Here’s what the firm said:
“Most recently, we initiated a position in General Motors Company (NYSE:GM), one of the largest automakers in the United States. Over the past several years, GM has taken steps necessary to focus the company on the most profitable segments and move into position to compete in an electrified and autonomous world. With the recent rise in interest rates there was a meaningful selloff in the auto industry, which presented us an attractive entry point to a name we know well.”
See also 10 Reddit Stocks That Are Too Cheap To Ignore and 10 Cheap Monthly Dividend Stocks To Buy.
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This article is originally published at Insider Monkey.
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