Without a doubt, many traders on Robinhood, which has become very popular among millenials during the novel coronavirus crisis, have made some odd picks. The latter category of Robinhood stocks includes the shares of some bankrupt companies, including Hertz (OTCMKTS:HTZGQ) and Chesapeake (OTCMKTS:CHKAQ), along with a number of very dark-horse names, such as Fisker (NYSE:FSR), Virgin Galactic (NYSE:SPCE) and XpresSpa (NASDAQ:XSPA).
But the Robinhood folks also made some great picks, getting in, for example, early on the sports-betting explosion with DraftKings (NASDAQ:DKNG) and picking a winning alternative-energy play in Plug Power (NASDAQ:PLUG). Other top-notch Robinhood picks included Etsy (NASDAQ:ETSY), an e-commerce website for artists, and, of course, electric-vehicle makers Tesla (NASDAQ:TSLA) and Nio (NYSE:NIO).
So while there’s some debate about the overall utility and impact of Robinhood, picking out the proverbial wheat from the chaff among the most popular names on the platform can definitely be extremely profitable.
Here are three stocks popular on the platform that investors should keep on their “short lists.” In other words, these are three Robinhood stocks that investors should consider buying:
Robinhood Stocks: PayPal (PYPL)
As of Nov. 22, PayPal was Robinhood’s 16th most popular name. With Covid-19 boosting e-commerce tremendously and signifying the end of cash as a popular payment vehicle, PayPal is very well-positioned to benefit from these trends.
Putting it more succinctly, InvestorPlace columnist Luke Lango, recently wrote, “PayPal’s strong third-quarter earnings confirmed that we are sprinting, faster than ever, into a ‘new world’ where everyone buys everything online.” That’s, of course, an exaggeration, but the popularity of online buying has certainly surged a great deal.
And I agree with Lango’s assessment of the company’s Q3 results. The 36% year-over-year jump in its payment volume and the 25% year-over-year surge in its top line were definitely great.
PayPal’s market capitalization is roughly 50% that of Visa’s (NYSE:V). I expect that gap to close meaningfully over the longer term.
Plug Power (PLUG)
Checking in at number 11 on the Robinhood list, Plug Power has long been one of my favorite stocks. With the company benefiting strongly from both the e-commerce and clean-energy megatrends, its financial results improved greatly in recent quarters, helping to propel PLUG stock up an incredible 670% this year.
But now, the Street is starting, for the first time, to really get behind the shares. For example, Jim Cramer has turned generally upbeat on PLUG stock, saying on Oct. 9 that “after many false starts, they’re on the right track.” On Nov. 17, however, after the company filed to sell 38 million new shares of its stock, Cramer did advise investors to wait before buying the shares, saying that it was “overbought.”
Indeed, before pulling the trigger on the name, more conservative investors may want to wait for a pullback. But given Plug Power’s many positive catalysts, including the coming explosion of demand for hydrogen trucks and the continued rapid growth of e-commerce, the shares are likely to trend much higher over the longer term.
GM (NYSE:GM) is number 16 on the list of Robinhood stocks. As in the case of Plug Power, I’ve been bullish on GM stock for many months, but the Street is just starting to become enthused about the company.
Among the company’s powerful, positive catalysts are the lack of popularity of mass transit amid the pandemic, the exodus from cities to suburbia in the U.S., and the automaker’s many upcoming electric vehicles. Additionally, GM is a leader in the autonomous-vehicle (AV) space, which I expect to come into its own sooner rather than later.
And as CNBC recently noted, the company confirmed this year that it can remain strong during a recession, while its EV efforts made GM stock more attractive to investors.
With the automaker’s EVs and AV initiatives likely to continue to win more converts going forward, I expect its shares to climb much further over the longer term.
On the date of publication, Larry Ramer held a long position in Plug Power.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been Roku, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.