In this article, we discuss the 10 new stocks Reddit’s WallStreetBets is buying.
The post-pandemic marketplace, already under heavy strain amid fears of inflation and a dramatic drop in the prices of growth stocks and cryptocurrencies, has been thrown into more confusion in recent days as meme stock rallies, fueled by retail investor bets against the short-selling attempts of hedge funds, return to the fore. At the turn of the year, these meme stock rallies led to billions in losses for big finance capital, leading to regulatory probes and calls for policing around trading on applications like Robinhood.
Six months ago, the two primary actors at the center of the hedge fund versus retail investor battle were GameStop Corp. (NYSE: GME), the video game and entertainment products retailer, and AMC Entertainment Holdings, Inc. (NYSE: AMC), the movie theatre chain based in Kansas. GameStop Corp. (NYSE: GME), the focus of a short-selling attempt in early January, saw share price rise close to 1,500% in the first three weeks of the new year as retail investors, who used Reddit forum WallStreetBets to coordinate, spoiled hedge fund bets against the stock.
Similarly, AMC Entertainment Holdings, Inc. was also the target of a short-seller scheme this year. The company has recently been involved in another short squeeze as the share price registers double digits growth amid reports that many shares of the firm are being held short. On June 19, data from finance firm Ortex showed that short-sellers had lost more than $500 million after a rally saw the share price of the movie theatre firm jump by close to 15% in a single day as a result of coordinated action through social media.
Even though GameStop Corp. and AMC Entertainment Holdings, Inc. have grabbed all the headlines around Reddit trading and the power of the influencers on WallStreetBets forum, some other stocks that remain popular on the platform, some of which are listed below, include Tesla, Inc. (NASDAQ: TSLA), the EV-maker that has been in a slump as vehicle deliveries are hit by supply chain problems and the decreasing demand for electric cars in China, the largest EV market in the world.
It remains to be seen how finance experts evaluate the influence of WallStreetBets on the market over the past few months as the second quarter draws to a close. The forum has certainly given these experts a lot to think about. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here is our list of the 10 new stocks Reddit’s WallStreetBets is buying. These companies were ranked keeping in mind the hype around them on the WallStreetBets forum on Reddit, hedge fund sentiment, and the basic earnings philosophy of each company.
New Stocks Reddit’s WallStreetBets is Buying
10. Workhorse Group Inc. (NASDAQ: WKHS)
Number of Hedge Fund Holders: 16
Workhorse Group Inc. (NASDAQ: WKHS) is ranked tenth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The stock has offered investors returns exceeding 82% over the course of the past twelve months. The company makes and sells electric-powered delivery and utility vehicles. The stock has been soaring in recent weeks amid interest around a new patent filing, buzz around government incentives for clean energy firms, and increased mention of the firm on Reddit forums like WallStreetBets.
On May 10, Workhorse Group Inc. announced that it was entering into an agreement with EAVX to develop a new electric-powered delivery vehicle that would expand the product line of the firm and enable it to move into new consumer markets.
At the end of the first quarter of 2021, 16 hedge funds in the database of Insider Monkey held stakes worth $96.6 million in Workhorse Group Inc., the same as in the preceding quarter worth $90.8 million.
Just like GameStop Corp., AMC Entertainment Holdings, Inc., and Tesla, Inc., Workhorse Group Inc. is one of the stocks Reddit’s WallStreetBets is buying.
9. Virgin Galactic Holdings, Inc. (NYSE: SPCE)
Number of Hedge Fund Holders: 17
Virgin Galactic Holdings, Inc. (NYSE: SPCE) is a spaceflight company that aims to be the first commercial spacecraft carrier catering to tourists. The company was founded by British billionaire Richard Branson in 2004. It is placed ninth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The company’s shares have returned over 163% to investors in the past twelve months. The company has been the focus of a short squeeze recently.
On June 3, Virgin Galactic Holdings, Inc. surged more than 3% after the firm revealed that it would be flying a researcher onboard a craft to test new healthcare tech and demonstrate the benefits that the spaceflight system provided for new experiments.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Renaissance Technologies is a leading shareholder in Virgin Galactic Holdings, Inc. with 2.8 million shares worth more than $86 million.
Just like GameStop Corp., AMC Entertainment Holdings, Inc., and Tesla, Inc., Virgin Galactic Holdings, Inc. is one of the stocks Reddit’s WallStreetBets is buying.
8. UWM Holdings Corporation (NYSE: UWMC)
Number of Hedge Fund Holders: 19
UWM Holdings Corporation (NYSE: UWMC) is a wholesale mortgage lender. It is ranked eighth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The stock has returned more than 15% to investors over the course of the past three months. The stock is an interesting case study in meme stocks, as its popularity on Reddit forums results in a stock rally even as investment advisories like Jefferies, Wedbush, and Credit Suisse either do not have positive ratings on the company or have downgraded it recently.
On April 21, investment advisory Barclays Capital initiated coverage on UWM Holdings Corporation stock with an Overweight rating on the back of solid earnings outlook for the firm and the possibility of expanding market share.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $76.6 billion in UWM Holdings Corporation.
Just like GameStop Corp., AMC Entertainment Holdings, Inc., and Tesla, Inc., UWM Holdings Corporation is one of the stocks Reddit’s WallStreetBets is buying.
7. Corsair Gaming, Inc. (NASDAQ: CRSR)
Number of Hedge Fund Holders: 9
Corsair Gaming, Inc. (NASDAQ: CRSR) is a computer hardware company based in California. It primarily makes and sells gaming and streaming products in North America, South America, Asia, Europe, and Australia. Some of the products sold by the firm include keyboards, mice, headsets, and gaming controllers, among others. It is placed seventh on our list of 10 new stocks Reddit’s WallStreetBets is buying. The share price of the firm has registered double digits growth in the past few weeks as the stock gains traction on Reddit.
On May 4, Corsair Gaming, Inc. posted earnings results for the first quarter of 2021, reporting earnings per share of $0.58, beating market predictions by $0.25. The revenue over the period was close to $530 million, up 71% year-on-year.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Corsair Gaming, Inc. with 414,300 shares worth more than $13.7 million.
Just like GameStop Corp., AMC Entertainment Holdings, Inc., and Tesla, Inc., Corsair Gaming, Inc. is one of the stocks Reddit’s WallStreetBets is buying.
6. Skillz Inc. (NYSE: SKLZ)
Number of Hedge Fund Holders: 26
Skillz Inc. (NYSE: SKLZ) is ranked sixth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The stock has returned more than 93% to investors in the past year. The firm operates a popular mobile gaming platform that hosts several esports tournaments and acts as a social hub for gamers. The stock has been gaining traction on Reddit forums, especially WallStreetBets, in recent weeks and is also viewed favorably by analysts as sports betting and gaming on mobile increases across the world.
On June 2, Skillz Inc. signed a deal worth $150 million to purchase Aarki, a technology-centered advertising platform. The company said the move was part of a push to expand into the mobile gaming industry.
At the end of the first quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $672 million in Skillz Inc., down from 33 in the previous quarter worth $719 million.
Just like GameStop Corp., AMC Entertainment Holdings, Inc., and Tesla, Inc., Skillz Inc. is one of the stocks Reddit’s WallStreetBets is buying.
5. Clean Energy Fuels Corp. (NASDAQ: CLNE)
Number of Hedge Fund Holders: 15
Clean Energy Fuels Corp. (NASDAQ: CLNE) is a renewable energy company. It is placed fifth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The company’s shares have offered investors returns exceeding 408% in the past year. The firm operates in the US and Canada and markets renewable natural gas and other clean solutions for vehicle transport. It also develops and runs fueling stations.
On June 22, Clean Energy Fuels Corp. stock soared 5% after the firm announced that it had contributed $50 million to a joint venture with energy firm BP in relation to dairy renewable gas projects that will start production by 2022.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Driehaus Capital is a leading shareholder in Clean Energy Fuels Corp. with 2.3 million shares worth more than $32 million.
4. Tesla, Inc. (NASDAQ: TSLA)
Number of Hedge Fund Holders: 62
Tesla, Inc. is an electric vehicle maker. It also has interests in the clean energy business and cryptocurrencies. The stock is one of the most popular ones on the WallStreetBets forum on Reddit and this is perhaps one reason why the share price of the firm has not crashed more than other crypto-related growth stocks in recent weeks. The firm is ranked fourth on our list of 10 new stocks Reddit’s WallStreetBets is buying. The stock has returned more than 252% to investors in the past twelve months.
On June 24, Tesla, Inc. owner Elon Musk said on social media that Starlink, the satellite internet project of the company, would not be going public anytime soon but that he would aim to give Tesla shareholders access to the IPO when it did take place.
At the end of the first quarter of 2021, 62 hedge funds in the database of Insider Monkey held stakes worth $10 billion in Tesla, Inc., down from 68 in the preceding quarter worth $12 billion.
Here is what Baron Partners Fund has to say about Tesla, Inc. (NASDAQ: TSLA) in its Q1 2021 investor letter:
“Tesla, Inc. designs, manufactures, and sells fully electric vehicles, solar products, energy storage solutions, and battery cells. The stock fell during the quarter as a result of general market dynamics and a potential production slowdown due to parts shortages. A refreshed S/X and China Model Y ramp could also have a negative impact on margins in early 2021. We anticipate strong growth and improved margins driven by new production capacity, manufacturing efficiencies, localization of its manufacturing and supply chain, and maturation of Tesla’s full self-driving technology.”
3. ContextLogic Inc. (NASDAQ: WISH)
Number of Hedge Fund Holders: 25
ContextLogic Inc. (NASDAQ: WISH) is a mobile ecommerce company. It has operations in North America, South, America, and Europe, among other places. The company operates the popular Wish platform which acts as a link between users and merchants. In addition to connecting users with merchants, the firm also provides logistical services to businesses. It is placed third on our list of 10 new stocks Reddit’s WallStreetBets is buying. The company’s shares have returned more than 58% to investors in the past four weeks.
On June 14, ContextLogic Inc. stock jumped by close to 5% after the company announced that it had signed a two year partnership agreement with ecommerce platform PrestaShop, allowing brands on the latter to sell on the marketplace of the former.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm JS Capital is a leading shareholder in ContextLogic Inc. with 8.3 million shares worth more than $131 million.
2. Paysafe Limited (NYSE: PSFE)
Number of Hedge Fund Holders: 41
Paysafe Limited (NYSE: PSFE) is ranked second on our list of 10 new stocks Reddit’s WallStreetBets is buying. The firm markets payments solutions to online businesses and consumers. The firm operates the Skrill and NETELLER brands, as well as others, which allow users to make transactions through a virtual account. The firm is most famous for offering eCash solutions, a payment method by which online dealings can be paid with in cash upon finalization.
On May 26, Paysafe Limited entered into a deal with Repay Holdings that will enable merchants of Repay to allow cash payments at close to 60,000 retail partner locations of Paysafe.
At the end of the first quarter of 2021, 41 hedge funds in the database of Insider Monkey held stakes worth $1.3 billion in Paysafe Limited.
1. Clover Health Investments, Corp. (NASDAQ: CLOV)
Number of Hedge Fund Holders: 23
Clover Health Investments, Corp. (NASDAQ: CLOV) is a health insurance provider that operates through a software platform. It is placed first on our list of 10 new stocks Reddit’s WallStreetBets is buying. The company’s shares have returned more than 76% to investors in the past three months. The share of the firm, which is backed by prominent venture capitalist Chamath Palihapitiya, has jumped in recent weeks and SEC filings reveal that the company is presently in a short squeeze.
On June 24, Clover Health Investments, Corp. stock surged 8% after the firm announced that it would be expanding into more than 100 new markets, more than doubling its presence globally, with a focus on healthcare for underserved communities.
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based investment firm Greenoaks Capital is a leading shareholder in Clover Health Investments, Corp. with 96.3 million shares worth more than $728 million.
You can also take a peek at Billionaire Stan Druckenmiller’s Top 10 Stock Picks and Billionaire Julian Robertson On Interest Rates and His Top Stock Picks For 2021.
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This article is originally published at Insider Monkey.
