Stocks where popularity and analyst approval intersect
Robinhood traders have gotten a lot of attention in 2020. Some of the most popular stocks among Robinhood users have been the best-performing ones in the market in recent months. According to the company, the median age of Robinhood users is only 31. Although some analysts see the youthful Robinhood retail trader base as more in touch with the modern, tech-driven world, others say the traders are simply making risky bets on low-quality stocks. For investors looking to ride the Robinhood wave, here are nine top Robinhood stocks to purchase that also have at least 50% "buy" ratings from Wall Street analysts.
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General Electric Co. (GE)
General Electric shares are up about 10% in the last month, and more than 55,000 Robinhood users have bought the stock in that time. Bank of America analyst Andrew Obin says Robinhood traders are getting this one right. Obin says the new GE leadership team is finally making strides in cutting costs and getting GE back on the right path to long-term free cash flow growth. More than 820,000 Robinhood users own GE shares, and 62% of analysts are bullish on the stock. Bank of America has a "buy" rating and $11 price target for GE stock.
Walt Disney Co. (DIS)
Walt Disney is one of the five most popular stocks on Robinhood, and more than 65,000 users have added Disney to their holdings in the last month. Bank of America analyst Jessica Reif Ehrlich says Disney is a great stock for long-term investors. Ehrlich says Disney's assets are unmatched within the media and entertainment group, and the stock has an attractive risk-reward profile as global economies begin to reopen. More than 610,000 Robinhood users hold Disney shares, and 52% of Disney analysts are bullish. Bank of America has a "buy" rating and $146 price target for DIS stock.
Delta Air Lines (DAL)
Robinhood users seem to think the sell-off in airlines is a buying opportunity, while others are concerned that some major airlines may not even survive the downturn. Wall Street analysts are divided on major airline stocks, but 63% of them are bullish on Delta Air Lines. Morningstar analyst Brian Bernard says he is confident that air traffic demand will eventually bounce back. Nearly 600,000 Robinhood users own Delta, and about 75,000 have added the stock in the last month. Morningstar has a "buy" rating and $43.50 fair value estimate for DAL stock.
Microsoft Corp. (MSFT)
Among the 15 most-owned stocks on Robinhood, Microsoft has the highest percentage of analyst "buy" ratings at 88%. More than 480,000 Robinhood users own Microsoft, and more than 40,000 have added the stock in the last month. Bank of America analyst Kash Rangan says Microsoft is a unique investment, given its compelling valuation, impressive cloud services growth and attractive margins. Microsoft's cloud business and its Teams and Skype videoconferencing software have even gotten a boost from the work-from-home environment. Bank of America has a "buy" rating and $230 price target for MSFT stock.
Despite the broad market disruption, Apple is having a great 2020 before the launch of 5G iPhones, likely later this year. More than 80,000 Robinhood users have bought Apple stock in the last month. Bank of America analyst Wamsi Mohan says Apple's valuation is attractive, its services penetration is still relatively low, and its free cash flow and capital return potential will support the stock over time. More than 450,000 Robinhood users own the stock, and 66% of analysts recommend Apple. Bank of America has a "buy" rating and $390 price target for AAPL stock.
Norwegian Cruise Line Holdings (NCLH)
Carnival Corp. (CCL) is by far the most popular cruise stock among Robinhood users, but Wall Street analysts are much more bullish on Norwegian Cruise Line. More than 50,000 Robinhood users have added Norwegian to their holdings in the last month. Morningstar analyst Jaime Katz says Norwegian is a very high-risk stock that is "materially undervalued," given its potential long-term upside and positive early trends in 2021 cruise demand. More than 360,000 Robinhood investors hold Norwegian shares, and 58% of Norwegian analysts are bullish. Morningstar has a "buy" rating and $25 fair value estimate for NCLH stock.
United Airlines Holdings (UAL)
American Airlines Group (AAL) is the most popular airline stock among Robinhood users, but Wall Street analysts prefer Delta and United Airlines instead. Only 21% of analysts recommend American, but 53% of analysts are bullish on United. United has said its cash burn is easing, and Citi analyst Stephen Trent says recent passenger flow numbers suggest that Americans' desire to fly is starting to outweigh their health concerns. More than 340,000 Robinhood users own United, and almost 60,000 have added the stock in the last month. Citi has a "buy" rating and $47 price target for UAL stock.
Bank of America Corp. (BAC)
Federal Reserve stimulus programs have created significant loan growth opportunities for big banks like Bank of America, which is the most popular bank stock among Robinhood users. CFRA analyst Kenneth Leon says Bank of America's 2.8% dividend is secure, and the bank should return to revenue growth in the second half of 2020. More than 334,000 Robinhood users own Bank of America, about 25,000 investors have added the stock in the last month, and 62% of analysts are bullish on the bank. CFRA has a "buy" rating and $28 fair value estimate for BAC stock.
Plug Power (PLUG)
Shares of hydrogen and fuel cell specialist Plug Power have increased about an impressive 75% year to date as alternative energy continues to gain market share from fossil fuel. About 24,000 Robinhood users have bought Plug Power stock in the last month. Barclays analyst Moses Sutton says Plug is one of a handful of renewable energy pure-play stocks that offers investors another angle on renewable energy other than solar and wind. More than 325,000 Robinhood users own the stock, and 86% of analysts recommend Plug Power. Barclays has an "overweight" rating and $7 price target for PLUG stock.
Stocks that both Robinhood users and analysts like:
-- General Electric Co. (GE)
-- Walt Disney Co. (DIS)
-- Delta Air Lines (DAL)
-- Microsoft Corp. (MSFT)
-- Apple (AAPL)
-- Norwegian Cruise Line Holdings (NCLH)
-- United Airlines Holdings (UAL)
-- Bank of America Corp. (BAC)
-- Plug Power (PLUG)
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