You cannot escape Robinhood (NASDAQ:HOOD) these days. The popular trading app went public recently, and there was a lot of hoopla surrounding the listing and the legal wrangles the controversial company is facing. That only brought so-called Robinhood stocks into sharper focus.
The popular trading app gained prominence when legions of stuck-at-home amateurs invested their stimulus money in the stock market, taking their cues from social media sites. Since then, it’s been a topsy-turvy ride. The Reddit crowd originally embraced the platform as a democratizing force. However, when meme stock mania was at its peak, Robinhood limited trading of certain securities due to increased capital requirements from clearing houses.
The company has settled with the Securities and Exchange Commission (SEC) regarding its trading blockages last year and forked up $70 million. On the eve of its blockbuster initial public offering, the SEC revealed it was investigating that Robinhood CEO Vlad Tenev is not licensed by FINRA, short for the Financial Industry Regulatory Authority, Wall Street’s powerful self-regulator.
Meanwhile, the company has faced many legal difficulties for misleading customers, approving risky trades and failing to prevent system outages.
But despite all these challenges, Robinhood continues to flourish. And you cannot ignore its impact when managing your portfolio. That’s where this list of Robinhood stocks will prove useful to you. Not only are these seven names popular on the platform, but they also have excellent operating models.
- Apple (NASDAQ:AAPL)
- Amazon (NASDAQ:AMZN)
- Kinder Morgan (NYSE:KMI)
- Nutrien (NYSE:NTR)
- General Motors (NYSE:GM)
- PayPal (NASDAQ:PYPL)
- Nvidia (NASDAQ:NVDA)
Robinhood Stocks: Apple (AAPL)
AAPL stock had a surprisingly quiet July. Shares of the tech juggernaut rose just 2.9% despite reporting bumper third-quarter earnings on July 27. Apple posted a June quarter record revenue of $81.4 billion, up 36% year over year, and quarterly earnings per diluted share of $1.30, which handily beat consensus estimates of $1.01 per share.
Every one of Apple’s major product lines grew over 12% on an annual basis. The Services business was up 33% year-over-year, trumping last quarter’s 26.7% growth rate. Despite all these positives, the stock still slipped 2% in extended trading because Apple warned that its September quarter would not be as strong as June’s.
According to CEO Tim Cook, Apple is facing supply constraints related to chips that would affect the company’s iPhone and iPad sales in the September quarter. But there were still plenty of positives emerging from the earnings season regarding the future of the company. CFO Luca Maestri said Apple expects double-digit, year-over-year growth in the current quarter.
Ultimately, Apple is the bellwether of the tech sector. Any short-term decline is the perfect opportunity to load up on this tech titan.
Amazon had a rare stumble after “missing” analysts’ second-quarter sales estimates by $2.3 billion. Markets did not react kindly, but that has opened up a rare opportunity to load up on AMZN stock at a discount. Most of the company’s segments are experiencing hyper-growth.
Let’s break down the latest quarterly results to provide some much-needed context. Amazon’s revenue increased by 27% year over year to $113.08 billion, a notable slowdown from the second quarter of 2020 when sales shot up by 41% over the year-ago period. Nevertheless, it’s the third $100 billion quarter in a row.
For Q3, Amazon expects sales within the range of $106 billion to $112 billion, representing 10% to 16% growth compared to the same period last year. That’s well below consensus estimates of $119.2 billion.
But that is not all. Amazon has stated that it expects to see slower growth continue for the next few quarters. But you have to put these forecasts into context. During the pandemic, Amazon experienced unprecedented levels of sales, and now we see demand level off. That does not make it a bad stock.
Over the last several years, AMZN stock has rewarded investors with consistent growth. The largest earnings miss should not deter you from investing in this one.
Robinhood Stocks: Kinder Morgan (KMI)
One of the largest energy infrastructure companies in North America, Kinder Morgan is a recovery play trading at a discount. KMI stock bottomed out at a 52-week low of $11.45 in late 2020. But shares have a dividend-adjusted return of 31.5% in the year thus far, thanks to a bounceback in energy demand.
KMI owns and operates roughly 85,000 miles of pipelines and 152 terminals. Every major oil company uses Kinder Morgan to bring its products to market. The energy company generates most of its revenues from fee-based contracts for handling, moving and storing fossil fuel products. Understandably, the pandemic was brutal for KMI, but the company’s operating results are getting healthier with every quarter.
The natural gas pipeline giant reported a 5% jump in earnings in the latest quarterly report due to higher contributions from its Texas intrastate systems and Hiland Midstream systems and full service of its Permian Highway Pipeline.
Earnings from the products-pipelines segment rose 29% during the quarter due to demand recovering from the economy reopening. Jet fuel volumes are up 129% year over year, and although they remain 26% below that same pre-pandemic period, this is still a heartening statistic. Gasoline volumes were up 37%, approximately in line with 2019 levels.
Looking ahead, the pipeline giant expects to generate $5.4 billion of distributable cash flow and $7.9 billion of adjusted EBITDA. Due to the capital-intensive nature of the business and the company’s high dividend distribution, these numbers are of prime importance.
Nutrien is a Canadian fertilizer company that provides “crop inputs” — potash, nitrogen, phosphate, other fertilizer products — along with “crop protection” products, including herbicides, insecticides, and fungicides.
It is the world’s largest fertilizer producer with 2,000 retail stores, more than 20,000 employees, and investments in 14 countries. At a market capitalization of $36 billion, Nutrien is one of the biggest agriculture companies in the world.
Due to the global demand for food constantly increasing, NTR stock is seemingly recession-proof. It has a one-year dividend-adjusted return of 75.2% and a healthy dividend yield of 3.1%.
Robinhood Stocks: General Motors (GM)
In a world where Tesla (NASDAQ:TSLA) is the biggest automobile company globally, General Motors can seem like yesterday’s news. But it would be folly to ignore this American institution, founded in 1908, as well as GM stock.
The reason? General Motors is on fire at the moment.
In the first six months of the year, the Detroit-based American manufacturer produced a record $8.5 billion in pre-tax profit on $66.6 billion in sales. When unveiling second-quarter earnings, the company raised its adjusted full-year guidance to between $11.5 billion and $13.5 billion, or $5.40 to $6.40 a share, up from $10 billion to $11 billion, or $4.50 to $5.25 a share.
And for investors worrying about EV leader Tesla, America’s largest automaker has you covered. The company will spend $35 billion on electric and autonomous vehicles through 2025, a 30% increase from plans announced late last year. GM intends to sell more than 1 million EVs yearly by 2025 and has said it would roll out 30 new EVs by 2025. The higher spending will help in the achievement of these plans, expand its rollout of EVs and accelerate production of its battery and fuel cell technologies, including two new U.S. battery plants in addition to two under construction, by 2025.
Considering its history of success, strong outlook, and projected spending on EV capabilities, General Motors is one of the better Robinhood stocks out there.
While the pandemic was rough for most companies, it served as a massive tailwind for online payments system provider PayPal.
The company reported stellar earnings growth quarter after quarter. In fact, 2020 was the strongest in the payment platform’s history, with total payment volume (TPV) being $936 billion, growing 31% on a spot and FX-neutral basis (FXN) basis. Revenue for the year finished at $21.45 billion, growing 21% and 22% FXN.
With such solid performance, you might be asking yourself why PYPL stock is down 7.3% in the last month. Well, the San Jose, California-based company missed second-quarter revenue estimates amid eBay’s (NASDAQ:EBAY) switch to another payment processor. That did a real number on the share price, but PayPal benefits from secular tailwinds and is involved with some of the hottest themes in the investment space. An earnings miss is a momentary blip on a long journey of success.
And let’s not even get started on cryptocurrency. Through the PayPal app, you can choose to buy Bitcoin (CCC:BTC-USD), Ethereum (CCC:ETH-USD), Bitcoin Cash (CCC:BCH-USD), and Litecoin (CCC:LTC-USD). Mizuho Securities analyst Don Dolev has forecast that PayPal will earn up to $2 billion in revenue from its bitcoin business by 2023.
And if you are one of those investors put off by the inherent risk and volatility of crypto, then you can rest easy, knowing PYPL is a diversified enterprise.
Robinhood Stocks: NVIDIA (NVDA)
Nvidia and Advanced Micro Devices (NASDAQ:AMD) are the two most prominent players in the semiconductors space. Since we are in the middle of an ongoing shortage of semiconductors in the U.S., these companies are now more important than ever.
Nvidia’s main concern will be maintaining its supply chains during this time. Demand will continue to be high for its graphics cards and mobile processors in 2021 and beyond.
The semiconductor company has already warned about supply shortages for the rest of 2021. “We expect demand to continue to exceed supply for much of this year,” said Colette Kress, Nvidia CFO, on an investors call. Nvidia does note that notwithstanding the issues, supply should still increase as 2021 progresses. “We will see supply continue to increase throughout this quarter as well as throughout the year,” said Kress.
Nvidia needs to manage this one issue, and it should be in the clear. During the last five years, EPS has grown by 40.8% and revenues by 28.8%. The stock has a dividend-adjusted return of 1,276.1% during the same period. Clearly, investors have handsomely rewarded its performance.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.