With almost 18 million users, Robinhood is a very popular trading platform for young people and new investors. While not every stock that is popular with its users are good investments, there are plenty of cases when the Robinhood investing crowd is right on the money with their stock picks.
Let’s look at the reasons why two popular companies on Robinhood might make for slam-dunk investments.
1. Snap
This image-sharing social media giant has an industry-leading edge among young people. Its stunning growth rate and path for margin expansion are just extra icing on the cake.
The company’s Q2 revenue went up by 116% y/y to $982 million, while its overall loss narrowed from $326 million to $152 million in the time period. The firm plans to keep momentum by increasing its content — including using new Snap Originals (five-minute series with non-skippable ads) and international Snap Discover channels, which are news feeds tailored to certain markets.
With a trailing price-to-sales ratio of 35, the stock is not cheap. But the company’s high top-line value is justified by its fast growth and improvement possibilities.
2. Walmart
Walmart is not a fast-growing company but it makes up for this with value. As the top company in the world by by revenue, the supermarket chain is an unstoppable blue-chip business.
Walmart’s fiscal Q1 revenue increased by a 2.7% to reach $138.3 billion, but the firm will experience tough issues this year as covid-related tailwinds reach the retail industry. However, their e-commerce business is still rapidly expanding, suggesting some coronavirus boosts could be longer-lasting or permanent. Walmart’s worldwide e-commerce sales went up by 43% globally and are now 12% of its retail income.
With a market share at 5.3%, Walmart is the second-largest e-commerce website in the country. And its huge physical footprint of more than 10,500 stores will give it the edge in delivery, especially for perishable goods like groceries.
The stock has a dividend yield of only 1.5%, but the company has boosted this payout for 47 consecutive years — earning it Dividend Titan status. It also gives value to shareholders through a big share-repurchase program with $17.6 billion released as of Q1.
Author: Scott Dowdy
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