In this article, we discuss 10 NFT stocks to buy according to Reddit.
Non-fungible tokens, or NFTs, are digital assets stored on a blockchain ledger, and can take the form of art, photos, videos, and audio. Retail investors and hedge funds alike invested heavily in NFTs in 2021, with sales reaching $25 billion as the trend exploded in popularity.
Although NFTs have been launched since 2014, investors took an active interest in NFT trading in 2021. Celebrities and high profile individuals entered the crypto mania in 2021 as well, with the former CEO of Twitter, Inc. (NYSE:TWTR), Jack Dorsey, selling a tweet as an NFT for $2.9 million in March 2021. Similarly, the American rapper Eminem on January 4, 2022, purchased an NFT from the “Bored Ape” avatar collection for $450,000, since the art resembled Eminem’s features. He now has the NFT up as his Twitter display picture, and this significantly boosted demand for the Bored Ape NFT avatars, which retail for approximately $280,000.
The growing interest in the metaverse has also helped with the blockchain, crypto, and NFT hype. Key market players are also diving into the NFT craze. For example, luxury fashion brands including Gucci, D&G, and Burberry Group plc (OTC:BURBY) dropped a collection of virtual wearables, Visa Inc. (NYSE:V) acquired a 24×24 pixel image from the CryptoPunks NFT collection, and NIKE, Inc. (NYSE:NKE) purchased a virtual sneaker and collectibles company.
The most notable NFT stocks include PLBY Group, Inc. (NASDAQ:PLBY), eBay Inc. (NASDAQ:EBAY), and Funko, Inc. (NASDAQ:FNKO).
Photo by Adam Nowakowski on Unsplash
Our Methodology
We searched Reddit threads extensively to understand the sentiments of Redditors regarding the best NFT stocks, and selected the 10 names that were most frequently mentioned. To elaborate on each company, we have mentioned analyst ratings, fundamentals, and the hedge fund sentiment around the stocks.
We have ranked the list according to the popularity of each company among the 867 hedge funds that were tracked by Insider Monkey in the third quarter of 2021.
NFT Stocks to Buy According to Reddit
10. WISeKey International Holding AG (NASDAQ:WKEY)
Number of Hedge Fund Holders: 1
WISeKey International Holding AG (NASDAQ:WKEY) is a notable global cybersecurity company that offers digital security to individuals utilizing blockchain, artificial intelligence, and the internet of things. The company has billions of microchips that collect big data, enabling WISeKey International Holding AG (NASDAQ:WKEY) to predict the failure of industrial equipment before it happens.
The company announced on November 23 that it has signed a cooperation agreement with Luminaries21.com and OISTE.ORG Foundation, to develop non-fungible tokens, exclusively designed for world leaders, celebrities, and influencers. The NFTs will be associated with multiple social causes in order to develop and sponsor implementable solutions targeting the United Nations global sustainable goals, as well as assisting other humanitarian agencies.
WISeKey International Holding AG (NASDAQ:WKEY) reported on January 13 that it is creating an NFT ecosystem with a direct connection to satellites, which will gauge the authenticity of the NFTs from space to device through secure telecommunication means. The WISeKey International Holding AG (NASDAQ:WKEY) stock rose 8% as a result of this announcement.
Matthew Galinko, an analyst from the investment advisory Maxim, initiated coverage of WISeKey International Holding AG (NASDAQ:WKEY) on December 10 with a Buy rating and a $11 price target.
In the third quarter of 2021, 1 hedge fund reported owning a $122,000 stake in WISeKey International Holding AG (NASDAQ:WKEY).
9. Dolphin Entertainment, Inc. (NASDAQ:DLPN)
Number of Hedge Fund Holders: 2
Dolphin Entertainment, Inc. (NASDAQ:DLPN) owns multiple media marketing companies that help the corporation develop movies, television, digital programming, live events, and related intellectual property.
Dolphin Entertainment and West Realm Shire Services Inc, the company that owns FTX.US, announced on August 2 that they are combining forces to create an NFT marketplace for leading sports and entertainment brands. The collaboration will utilize Dolphin Entertainment, Inc. (NASDAQ:DLPN)’s creative and marketing side and pair it with FTX’s knowledge of cryptocurrencies.
Dolphin Entertainment, Inc. (NASDAQ:DLPN) on November 22, 2021, launched its first NFT collection, called the Creature Chronicles: Exiled Aliens, which features 10,000 custom avatars representing an ancient race of unique creatures. Dolphin Entertainment, Inc. (NASDAQ:DLPN) plans to launch more NFTs in this series so that the fan experience can grow and evolve. Redditors are rapidly increasing their positions in Dolphin Entertainment, Inc. (NASDAQ:DLPN).
On November 19, Dolphin Entertainment, Inc. (NASDAQ:DLPN) reported its third quarter results, posting GAAP earnings per share of $0.02, beating estimates by $0.01. Revenue over the period jumped 47.08% year-over-year to $9.40 million, outperforming estimates by $562,480.
According to Insider Monkey’s Q3 data, 2 hedge funds were bullish on Dolphin Entertainment, Inc. (NASDAQ:DLPN), holding stakes equaling $4.73 million.
8. Oriental Culture Holding LTD (NASDAQ:OCG)
Number of Hedge Fund Holders: 3
Oriental Culture Holding LTD (NASDAQ:OCG) is a Chinese company providing online collectibles and artwork e-commerce services, offering multiple types of listed NFT products including paintings, stamps, coins, postage seals, and collectible cards. Oriental Culture Holding LTD (NASDAQ:OCG) has a dedicated trading platform and it is one of the notable Chinese players in the non-fungible tokens market.
On November 3, Oriental Culture Holding LTD (NASDAQ:OCG) posted its 1H 2021 results. The company announced a GAAP EPS of $0.49, and revenue for the period totaled $24.5 million, up 880% year-over-year.
Among the hedge funds tracked by Insider Monkey in Q3 2021, 3 funds reported owning stakes in Oriental Culture Holding LTD (NASDAQ:OCG), worth $486 million, up from 1 hedge fund holding a $217 million position in Oriental Culture Holding LTD (NASDAQ:OCG) in the preceding quarter.
Paul Marshall and Ian Wace’s Marshall Wace LLP is the leading stakeholder of Oriental Culture Holding LTD (NASDAQ:OCG), buying 79,474 shares of the company in the third quarter, valued at $313,000.
In addition to PLBY Group, Inc. (NASDAQ:PLBY), eBay Inc. (NASDAQ:EBAY), and Funko, Inc. (NASDAQ:FNKO), Oriental Culture Holding LTD (NASDAQ:OCG) is growing in popularity as a notable NFT stock.
7. Cinedigm Corp. (NASDAQ:CIDM)
Number of Hedge Fund Holders: 9
Cinedigm Corp. (NASDAQ:CIDM) is an American entertainment company dealing in motion pictures, entertainment, video on demand, digital distribution, content marketing, and film distribution.
Cinedigm Corp. (NASDAQ:CIDM), on March 25, announced that it will be developing non-fungible token products, and the shares gained 28% in premarket trading the same day due to speculations about Cinedigm Corp. (NASDAQ:CIDM) entering the NFT market. The company CEO declared that NFT initiatives are meant to support their key mission of providing superior streaming and context experience for users.
On October 26, Cinedigm Corp. (NASDAQ:CIDM) released horror-based NFT trading cards branded as the Bloody Disgusting Blood Pack, offered only as a unique 1 of 1 edition. The company has partnered with Rad.live to utilize Ara, their comprehensive NFTs platform and marketplace, as the key back-end solution for this launch.
Alliance Global Partners analyst Brian Kinstlinger on August 2 raised the price target on Cinedigm Corp. (NASDAQ:CIDM) to $3.25 from $3.00 and reiterated a Buy rating on the shares, observing that the company is set to experience accelerated growth given its “many catalysts” that include stronger inventory fill rates, more channels with better quality, increased viewership, and subscriber counts.
Among the hedge funds tracked by Insider Monkey, 9 funds were bullish on Cinedigm Corp. (NASDAQ:CIDM) in the third quarter, with stakes amounting to $29.5 million, as compared to 2 funds in the prior quarter holding stakes worth $5.9 million in Cinedigm Corp. (NASDAQ:CIDM).
Billionaire Israel Englander’s Millennium Management, the largest Cinedigm Corp. (NASDAQ:CIDM) stakeholder, elevated its position in the company by 42% in the third quarter, with approximately 6 million shares worth $15 million.
6. Marathon Digital Holdings, Inc. (NASDAQ:MARA)
Number of Hedge Fund Holders: 12
Marathon Digital Holdings, Inc. (NASDAQ:MARA) is a North American company that manages one of the largest bitcoin mining operations. Marathon Digital Holdings, Inc. (NASDAQ:MARA) specializes in the decentralized finance (DeFi) ecosystem, enabling users to purchase NFTs and similar digital assets.
On December 28, Marathon Digital Holdings, Inc. (NASDAQ:MARA) disclosed that it had purchased 78,000 miners from Bitmain, priced at $879.06 million, which will be delivered gradually over the months till December 2022. The stock climbed 10% after this announcement.
Riley analyst Lucas Pipes lowered the price target on Marathon Digital Holdings, Inc. (NASDAQ:MARA) to $74 from $92 but kept a Buy rating on the shares. The analyst cites higher than expected capital cost of the digital mining industry for the reduced price target. While the digital mining space has grown “dramatically and overwhelmingly successfully”, scaling has also brought unique challenges, which has been impacting sentiment and multiples in the space.
The price target still presents a huge upside when compared to the stock’s current price.
A total of 12 hedge funds in the third quarter database of Insider Monkey were long Marathon Digital Holdings, Inc. (NASDAQ:MARA), with stakes amounting to $46.7 million, as compared to 19 funds holding stakes worth $108.8 million in Marathon Digital Holdings, Inc. (NASDAQ:MARA) in the preceding quarter.
Just like PLBY Group, Inc. (NASDAQ:PLBY), eBay Inc. (NASDAQ:EBAY), and Funko, Inc. (NASDAQ:FNKO), Marathon Digital Holdings, Inc. (NASDAQ:MARA) is one of top NFT picks of Redditors.
5. PLBY Group, Inc. (NASDAQ:PLBY)
Number of Hedge Fund Holders: 15
PLBY Group, Inc. (NASDAQ:PLBY) is a California-based media and lifestyle company that was created to manage the Playboy Magazine and other relevant assets by Hugh Hefner in 1953. PLBY Group, Inc. (NASDAQ:PLBY) first ventured into the world of non-fungible tokens in the spring of 2021, when the company launched its first NFT collection called Liquid Summer, which sold out in under 3 minutes.
PLBY Group, Inc. (NASDAQ:PLBY), on October 20, announced its newest NFT drop, named Playboy Rabbitars, a series that will contain 11,953 unique 3D rabbits as a homage to the brand’s iconic logo. This will help PLBY Group, Inc. (NASDAQ:PLBY) rebrand the Playboy Club, since the NFTs will give owners access to special events, merchandise, and exclusive artist collaborations.
On November 23, Chardan analyst Brian Dobson initiated coverage of PLBY Group, Inc. (NASDAQ:PLBY) with a Buy rating and a $49 price target.
Fortress Investment Group is the leading PLBY Group, Inc. (NASDAQ:PLBY) stakeholder as of Q3 2021, holding 2.1 million shares worth $49.9 million. Overall, 15 hedge funds reported owning stakes in PLBY Group, Inc. (NASDAQ:PLBY) in the third quarter, valued at $62.3 million.
Here is what Greystone Capital Management has to say about PLBY Group, Inc. (NASDAQ:PLBY) in their Q1 2021 investor letter:
“Mountain Crest Acquisition Corp. (MCAC) / Playboy Enterprises (PLBY)
During the quarter, we entered into a mid-sized position in Mountain Crest Acquisition Corp., a SPAC that during late last year inked a deal to merge with Playboy Enterprises (yes, that Playboy) and take the company public. The deal was consummated in February and shares now trade under the ticker symbol PLBY. In line with my occasional attempts to exploit investor biases, the stigma surrounding the Playboy brand especially as it relates to the legacy magazine business helped create the opportunity to purchase shares for what appears to be an incredibly favorable valuation. This is one situation where a SPAC IPO benefitted us greatly as I believe if Playboy underwent the traditional IPO process including roadshow and investment bank involvement, shares wouldn’t have been available anywhere near our initial purchase prices which consisted of an absurdly low EBITDA multiple following the deal close. (Click here to read full text)
4. Funko, Inc. (NASDAQ:FNKO)
Number of Hedge Fund Holders: 18
Funko, Inc. (NASDAQ:FNKO), one of the top NFT stocks to buy according to Reddit, is an American company that creates collectibles, vinyl figures, bobbleheads, action figures, accessories, apparel, plush, and NFTs. Funko, Inc. (NASDAQ:FNKO) is known for producing licensed and limited edition products that are based on pop culture trends.
Jefferies analyst Stephanie Wissink upgraded Funko, Inc. (NASDAQ:FNKO) to Buy from Hold with a price target of $25, up from $21 on August 31. The analyst was “increasingly confident” in the company’s 10%-plus medium term growth profile and its business trajectory. She also noted that Funko, Inc. (NASDAQ:FNKO)’s business model is “de-risked” by property, category, and geographic concentration. Funko, Inc. (NASDAQ:FNKO)’s third quarter earnings per share and revenue beat analysts’ consensus estimates as well.
In the third quarter of 2021, 18 hedge funds were bullish on Funko, Inc. (NASDAQ:FNKO), with stakes totaling roughly $160 million, as compared to 19 funds in the prior quarter, holding stakes in Funko, Inc. (NASDAQ:FNKO) worth $177 million.
The largest stakeholder of Funko, Inc. (NASDAQ:FNKO) is James Woodson Davis’ Woodson Capital Management, with 4.2 million shares valued at $77.6 million.
3. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 28
DraftKings Inc. (NASDAQ:DKNG) is a fantasy sports and sports betting company, headquartered in Boston, Massachusetts. DraftKings Inc. (NASDAQ:DKNG) allows users to enter into fantasy sports contests, where they can win money based on the actual performance of professional players from the major American leagues, including the NFL, Premier League, UEFA Champions League, and NASCAR racing, among others.
In addition to sports betting, DraftKings Inc. (NASDAQ:DKNG) has a digital marketplace that is dedicated to non-fungible tokens of sports legends, including Tom Brady, Simone Biles, Tiger Woods, and Usain Bolt. The first collection of DraftKings Inc. (NASDAQ:DKNG) NFTs dropped on August 11. On December 7, the company announced that it is launching pro football gamified NFT collections, licensed from the NFL Players Association.
Truist analyst Barry Jonas lowered the price target on DraftKings Inc. (NASDAQ:DKNG) to $30 from $50 and kept a Hold rating on the shares as part of a broader research note previewing the 2022 U.S. gaming sector on January 13. For DraftKings Inc. (NASDAQ:DKNG), the analyst notes that while the company is a best-in-class pure-play online operator, sentiment has turned negative from rising interest and tax rates.
Cathie Wood purchased 266,000 DraftKings Inc. (NASDAQ:DKNG) shares on January 11, which elevated her total stake in the company to 17.5 million shares, worth $844.4 million. Cathie Wood’s ARK Investment Management is the largest stakeholder of DraftKings Inc. (NASDAQ:DKNG) from the 28 funds that were bullish on the stock in the third quarter of 2021.
Here is what Alger has to say about DraftKings Inc. (NASDAQ:DKNG) in its Q2 2021 investor letter:
“DraftKings is an online gaming operator. Its legacy Daily Fantasy Sports (DFS) allows users to virtually draft teams of players from professional sports leagues and potentially earn a payout based on how athletes perform. DraftKings Online Sports Betting (OSB) involves the company taking wagers or bets from customers on sporting events. The company’s third offering, Online Casino (iGaming), involves customers betting real money when playing casino games like slots and blackjack online.
DFS is legal in most states, while approximately 25% of the country’s population has access to OSB and approximately 10% has access to iGaming. Within a year, we expect approximately 40% or more of the population to have access to OSB as legalization moves rapidly.
The company reported a strong quarter, with revenues exceeding expectations by more than 30%. We think the stock underperformed due to the time period between the conclusion of March Madness and the start of the NFL season being a weaker betting period and concerns about more intense competition. Concerns around tough comps have also hindered performance of DraftKings shares. We note that monthly state data continues to be robust, showing no signs of slowing from reopening. We also believe DraftKings is increasing its potential to gain market share by moving its tech-platform to SBTech, which is a sports betting platform the company acquired as part of a SPAC deal. Legalization of sports betting by states has also been robust.”
2. eBay Inc. (NASDAQ:EBAY)
Number of Hedge Fund Holders: 49
eBay Inc. (NASDAQ:EBAY) is an American multinational e-commerce company that facilitates B2B and B2C sales transactions via its digital platform. eBay Inc. (NASDAQ:EBAY) was a top NFT pick of Redditors, since the company has a secure marketplace that lists NFTs for purchase, where buyers can discover new and underrated artists for affordable prices as well, and the use of crypto wallets is not a requirement. eBay Inc. (NASDAQ:EBAY) was the first ecommerce company to tap into the NFT frenzy back in May 2021.
On November 29, eBay Inc. (NASDAQ:EBAY) declared a $0.18 per share quarterly dividend, in line with previous. The dividend was paid on December 17, to shareholders of record on December 1. The company also beat market EPS and revenue estimates in the third quarter of 2021.
Nicolai Tangen’s Ako Capital is the largest eBay Inc. (NASDAQ:EBAY) stakeholder as of Q3, holding 7.35 million shares worth $512.5 million. Overall, 49 hedge funds in the third quarter database of Insider Monkey were bullish on eBay Inc. (NASDAQ:EBAY), up from 39 funds in the previous quarter.
JPMorgan analyst Doug Anmuth reinstated coverage of eBay Inc. (NASDAQ:EBAY) with a Neutral rating and a $70 price target on December 15. The analyst noted that eBay Inc. (NASDAQ:EBAY) has executed well to simplify its portfolio and improve margins, however, its product innovation efforts remain in early days.
Here is what Steel City Capital has to say about eBay Inc. (NASDAQ:EBAY) in its Q4 2020 investor letter:
“eBay (Long): EBAY continues to be a core holding in the Partnership’s long book despite not having any “sexy” attributes or unknown catalysts. I like EBAY because it checks the boxes of being both capital light and priced as a value stock (low multiple of free cash flow), factors which are attractive in a potentially inflationary environment.
In 3Q’20 the company printed $2.6 billion of revenue vs. guidance of $2.4 billion (a $200 million beat) while full year revenue guidance was taken up by $400 million, implying 4Q’20 would be higher by $200 million as well. Free cash flow from continuing ops was guided to $2.3 billion for the full year, slightly above the $2.0 billion the business regularly generated before getting a Covid/stimulus related boost.
EBAY will have about $4.6 billion of cash on hand at year end5 and should receive another $2.0 billion in after-tax proceeds this quarter related to the sale of its Classifieds portfolio6 . Additionally, the company will receive 540 million shares from Adevinta which are currently valued at ~$8.3 billion, and also holds a warrant to purchase a 5.0% stake in payment processor Adyen which was last valued at ~$775 million. Additional asset sales are also not out of the question7 . Backing everything out at today’s market cap of $38.2 billion gives a clean market cap for the core marketplace of $22.6 billion. At a minimum, I expect $2.0 billion of free cash flow in FY’21, with the potential for a higher figure to the extent the incoming administration is successful in cutting additional stimulus checks. By FY’22, free cash flow should ramp to $2.3 billion after incorporating a full year’s contribution from the managed payments initiative. This values EBAY at 9.6x free cash flow, or 11.7x excluding stock-based comp.”
1. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 50
Coinbase Global, Inc. (NASDAQ:COIN) is a digital American company that offers a cryptocurrency exchange platform, where users can buy and sell their desired currencies in secure transactions.
Coinbase Global, Inc. (NASDAQ:COIN) is one of the most popular NFT stocks to buy according to Reddit, since the company is launching an NFT marketplace soon, and has already opened its waitlist for exclusive access to the launch of its first collectibles. Individuals can mint, collect, discover, and exhibit their NFTs on Coinbase Global, Inc. (NASDAQ:COIN) platform, all in one place.
BofA analyst Jason Kupferberg on January 6 upgraded Coinbase Global, Inc. (NASDAQ:COIN) to Buy from Neutral with an unchanged price target of $340. The analyst notes increasing signs of revenue diversification at Coinbase Global, Inc. (NASDAQ:COIN) other than retail crypto trading and believes that this trend could accelerate in 2022 and beyond.
Coinbase Global, Inc. (NASDAQ:COIN) is a popular stock among the smart money, with 50 hedge funds in the third quarter holding stakes worth approximately $3 billion in Coinbase Global, Inc. (NASDAQ:COIN). One of the largest stakeholders of the company is Chase Coleman’s Tiger Global Management, with 2.6 million shares, valued at $608.8 million.
Here is what Hayden Capital has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q3 2021 investor letter:
“Coinbase (COIN): We established a new position in Coinbase, the dominant US crypto exchange and brokerage, this quarter. Given the misperceptions and early-stage nature of the industry, I thought it would be helpful for our partners’ understanding to share a report outlining our thesis, which we published on October 31st.
At a high level, we believe the crypto economy is in the middle of “crossing the chasm” into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact in crypto in some form.
Coinbase is well positioned in the Western, regulated markets to capture this influx – considering their dominant market share / mindshare, their focus on the casual user and thus superior user experience compared to alternatives, and their position as a “toll-booth” for this industry. Longer-term, we also believe Coinbase has “super-app” ambitions, and will be the primary gateway for both the general population and institutions to interact with the crypto economy…” (Click here to see the full text)
You can also take a look at 10 Metaverse Stocks to Invest In and 10 Best Multibagger Stocks To Buy Now.
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Disclosure: None. 10 NFT Stocks to Buy According to Reddit is originally published on Insider Monkey.
