It hasn’t been an easy year for American investors, with the stock market remaining a dicey place to invest ones hard-earned money. After all, the markets witnessed significant gyration due to the economic uncertainty related to the coronavirus pandemic. Major bourses have gone through a tumultuous ride this year, including the fastest drop to a bear market and the quickest rise from a bear market bottom to an all-time high.
Despite this volatility, online investing app provider Robinhood Markets, Inc. has lately seen increased betting on stocks by millennials, pushing its worth higher. Its app saw an uptick in user count this year with millions of Americans preferring to work from home amid the pandemic. In fact, daily average trading revenues, which show how much a company has earned through commissions and fees, more than doubled in the first and second quarter of this year, added Robinhood. And since Robinhood offers commission-free trades and gives out free shares of companies to new trading members, it has particularly been alluring for millennials and novice investors.
But given the current market volatility, it’s not easy to buy stocks trading on the Robinhood platform. In fact, most of the popular stocks on the Robinhood trading platform are highly risky. Notably, airline and cruise stocks are stressed, energy companies remain shaky, and biotech remains a speculative trade. Thus, investors seek out companies that possess long-term growth drivers and are leaders in their respective industries. Then only, one can expect sustainable returns over the long run. Here are such Robinhood darlings that stand out –
Pinterest, Inc. (PINS - Free Report
) is one of the Robinhood stocks that has certainly been popular among traders and investors. The social media giant, in the June-quarter, registered 39% year-over-year monthly active user (MAU) growth. No doubt, Pinterest benefited from user base expansion boosted by the coronavirus-led lockdown measures.
In the near future, Pinterest will continue to benefit from its growing popularity among teenagers driven by diverse content that the platform provides, growing adoption of its advertising platform and efforts to improve user engagement. Pinterest is increasingly establishing a unique value prop to advertisers that could provide a competitive advantage in the long haul. Moreover, Pinterest’s initiative to improve user engagement by infusing visual search technology even on offline mode on its platform has accelerated the conversion of searches into product purchases.
The company also has the capability to transform into an e-commerce giant. Its users are showcasing their interests and hobbies, which may connect business houses with these consumers. As engagement builds, so will Pinterest’s importance in the e-commerce space.
Pinterest, currently, has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings increased more than 100% over the past 60 days. The company’s expected earnings growth rate for the current and next quarter is 200% and 33.3%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Another stock on Robinhood’s most-popular list is Ford Motor Company (F - Free Report
) . This is quite surprising because Ford had time and again been a poor long-term investment choice. But still, more than 900,000 Robinhood investors have placed their bets on the stock.
This is because Robinhood has the tradition of giving out free shares to new traders. So, many new Robinhood traders have actually received free shares of Ford.
And let’s admit, Ford has been an iconic brand for more than 100 years and has manufactured millions of vehicles worldwide each year. And big brands tend to have established business models and drawn consumers and investor attention even when in choppy equity markets.
Ford’s focus on SUVs and trucks along with EV launches are also likely to enhance its long-term prospects. Ford currently flaunts a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 47.4% over the past 60 days. The company’s expected earnings growth rate for the next five-year period is 5.3%.
Finally, the third-most-popular stock is Walmart Inc. (WMT - Free Report
) . Let’s dig in. The world’s biggest retailer now has become a serious competitor to Amazon.com, Inc.’s (AMZN) online monopoly. On Aug 18, in its fiscal second-quarter earnings, overall revenues grew significantly due to improvement in its digital sales. E-commerce growth almost made up two-third of the comparable sales segment, according to CEO Brett Biggs.
What’s more, the company recently unveiled its Walmart+ membership program that has successfully lured more customers. Further, the company continues to gain from rising demand for grocery and general merchandise items amid coronavirus-led stay-at-home trends.
Walmart, currently, carries a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has risen 7.1% over the past 60 days. The company’s expected earnings growth rate for the current and next year is 7.1% and 6.6%, respectively.
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