Analyzing the common trends that emerge from Robinhood traders has quickly become a popular activity amongst stock market aficionados. Though many Robinhood traders are “green” and still cutting their teeth in the investing game, there is some value in studying this unique cohort’s trading trends.
Pay close attention to the Robinhood 100 stocks and you will find there are some true gems. A handful of these stocks are worthy of the hype.
Let’s take a look at the best “Buy rated” Robinhood 100 stocks trading at or below $10: Zynga (ZNGA), Fitbit (FIT) and GoPro (GPRO).
When it comes to gaming, most investors are primarily focused on the Electronic Arts (EA), Activision (ATVI), and Nintendo (NTDOY). Shift your attention to the smaller players and you will find ZNGA has serious long-term potential.
Though smartphone and PC gaming are not completely replacing traditional console gaming, they are gaining ground, benefitting the likes of ZNGA. ZNGA’s social game services have mass appeal, short learning curves and do not require the purchase of a conventional video game console that has the potential to cost $500 or more. ZNGA is especially attractive as it is continuously working to improve the quality of its games with updates and patches.
ZNGA is a POWR Ratings winner, with an “A” Trade Grade, “B” grades in Buy & Hold Grade, Peer Grade, and Industry Rank, and a top-5 ranking out of 15 publicly traded companies in the Entertainment – Toys & Video Games category.
The analysts who have performed deep dives into ZNGA have set an average price target of $11.83 for the stock, indicating it has nearly 25% potential upside. Of the 14 analysts who have studied the stock, 11 insist it is a Buy, two insist it is a Hold and only one encourages investors to sell.
ZNGA’s forward P/E ratio of 25.94 is quite low compared to its peers in the video game space. A second wave of the coronavirus will undoubtedly have the masses locked onto their screens, playing games made by ZNGA. With 70+ million users, ZNGA rakes in nearly $2 billion in annual revenue. This is quite the leap from the $1.3 billion earned in 2019.
FIT, this once-forgotten stock has been resurrected, partially due to the pandemic motivating people across the globe to renew their focus on do-it-yourself (DIY) fitness while gyms have been shuttered. FIT wearable activity tracking tech accurately records user data, providing invaluable insight into conditioning, activity levels and other wellness metrics. FIT is also branching out into personal coaching and customer guidance for insights uniquely tailored to each customer.
The POWR Ratings show FIT receives “A’s” in Trade Grade and Buy & Hold Grade, and “B’s” in Peer Grade and Industry Rank. FIT is also ranked in the top 5 of the 34 Athletics & Recreation stocks.
FIT has gradually ascended toward $7 since dropping slightly below $6 during the coronavirus selloff. The only question is how high FIT will go. The stock recently popped from $6.31 to $6.96 in a 10-day period. It appears as though Google has convinced overseas regulators to approve its acquisition of FIT for $2.1 billion.
Once the deal is made official, FIT should climb even higher, proving Robinhood investors’ preference for this popular stock pick is more than justified.
GPRO is no longer the “apple of investors’ eyes” yet Robinhood traders sure love it. This action-oriented company makes mobile cameras and other wearable devices that capture video footage with amazing clarity. Though GPRO devices are fairly expensive, they are well-made, providing 360-degree shots even in the water.
Take a look at GPRO’s POWR Ratings and you will find the stock has “A” grades in the Buy & Hold and Trade components along with “B’s” in the remaining components. GPRO is ranked in the top half of 30 publicly traded companies in the Technology – Hardware space.
GPRO recently surpassed the 500K subscriber mark and announced no-cost subscriptions to take full advantage of its cloud service. GPRO dropped to $3.75 on September 11 and shot right back up near $7 across the next month. The question is whether GPRO can sustain the momentum heading into the final quarter of the year.
Take a moment to consider the fact that holiday shoppers will be buying gifts for people who no longer have access to a gym. Outdoor activities have become quite popular during the pandemic, meaning that many more GPRO devices will be sold during the holiday period. Hold GPRO through the new year and reassess after the fourth-quarter numbers roll in.
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ZNGA shares were trading at $9.41 per share on Wednesday afternoon, down $0.13 (-1.36%). Year-to-date, ZNGA has gained 53.76%, versus a 9.86% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More…
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