Reddit’s r/WallStreetBets is, unexpectedly, a go-to resource for finding the next big stock picks. The retail trading community has jettisoned GameStop (NYSE:GME) and AMC (NYSE:AMC) already, proving their ability. Now, investors want to coordinate their purchases with the subreddit in order to get in on the next moonshot. It could be any of the r/WSB favorites: Naked (NASDAQ:NAKD), BlackBerry (NYSE:BB), Nokia (NYSE:NOK)…But what about Zillow (NASDAQ:Z)? Is Zillow stock really among the hottest Reddit stocks?
The chase after the next great meme stock has led institutions to try and find the “hottest Reddit stocks” algorithmically. Bank of America is one of those institutions, and a recent analyst note is stirring up some mixed feelings.
Seeking Alpha is reporting that Bank of America’s analyst note today pegged Zillow stock as a new Reddit favorite. But that may not be the case.
Zillow Stock Is Not the ‘Next Reddit Stock to Watch’
CNBC shared the bank’s list of hottest Reddit stocks, along with some information about how the data are collected. Essentially, the bank algorithmically sorts the stocks based on comments that mention specific tickers in a given week.
Zillow is No. 8 on the list, and the news is pushing many news outlets to call it a hot Reddit stock. The analysis, however, fails to account for a number of things.
In the last seven days, there has been exactly one post dedicated to Zillow — a deep-dive post that shows examines how Zillow has become ubiquitous in the world of real estate. That post has 145 upvotes and 78 comments on a message board with 10.3 million subscribers.
Zillow cracked the top 10 on the Bank of America note with 50 mentions. These mentions are likely all contained within that one single post.
GME and AMC Make Up Majority of r/WSB Discussion Still
The top 10 stocks in the Bank of America hottest Reddit stocks list have a grand total of 8,852 mentions in the previous week. Of that total, 7,754 of those mentions were between AMC and GME. That’s 87% of the total share of the top 10. Zillow accounts for 0.5% of the total mentions.
The list also fails to account for the actual sentiment of the stock being mentioned in a given comment. The second most recent Zillow-related post on the subreddit was made nine days ago, and it leaned negative in sentiment. One Redditor called it the lesser of two real estate plays being evaluated. There have been two total posts mentioning Zillow in the last week.
This is not to say Zillow is not a strong play. However, trends on r/WallStreetBets suggest it is not about to pop as a Reddit stock. In fact, other sentiment trackers like Swaggy Stocks have identified BlackBerry as the next big thing.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
