Call them what you want: Meme stocks, Reddit faves, short-squeeze monsters — it’s all the same thing. In the end, there are a handful of stocks that investors love to take for a massive ride in a short period of time — making them meme stocks to buy.
Meme stocks often carry a high short-interest, which can trigger epic squeezes to the upside. However, that doesn’t necessarily have to be the case.
At times, there are only a couple of meme stocks in focus. At other times, there can be two dozen names or more on traders’ watch list. The point is simple, though: Know which names have the potential to go on epic — albeit, short-lived — squeezes to the upside.
With all the action we’ve seen so far this year, we’ve boiled our list down to seven meme stocks to watch for the fourth quarter. They are:
- GameStop (NYSE:GME)
- AMC Entertainment (NYSE:AMC)
- BlackBerry (NYSE:BB)
- Beyond Meat (NASDAQ:BYND)
- Ocugen (NASDAQ:OCGN)
- Rocket Lab USA (NASDAQ:RKLB)
- Sundial Growers (NASDAQ:SNDL)
Now, let’s dive in and take a closer look at each one.
Meme Stocks to Buy: GameStop (GME)
How can we start the list without starting with GameStop? This stock has become the face of the meme stocks, as it really kicked off the wild moves we’ve seen in 2021.
Back in January, GameStop was trading in the teens, with many investors already thinking this stock had made a big move. In many ways, it had. Shares were trading for sub-$5 back in the summer of 2020, so to be up triple or quadruple from those prices was already a hearty move.
But then Reddit chatter started about a short-squeeze for the ages and investors didn’t disappoint. GameStop stock exploded higher by more than 2,400% in just a few weeks, topping out at $483. The move attracted tons of retail interest, but surely dragged some professional traders and hedge funds into the mix, along with the algorithms. While GameStop stock hasn’t sustained its gains from January, we’ve seen plenty of squeezes higher since.
For instance, shares went from the $40s in February to almost $350 in March. After bottoming at $136.50 in May, shares again ripped back toward $350 in June.
In other words, if there are any meme stocks that can put together a massive short-term rally in the fourth quarter, it’s GameStop.
AMC Entertainment (AMC)
Riding right alongside GameStop has been AMC Entertainment. While GameStop was the face of the meme stocks in January, AMC was trying to enjoy the gains too. Shares saw a one-day rally of 301%, but topped out and sank from that point.
Fast forward to late May though and the stock really began to perk up again. Then AMC became the face of the meme stocks, as it exploded through the former highs. It ultimately rallied more than 700% in less than a month, as shares went from sub-$10 to more than $70. Obviously these stocks don’t “deserve” this type of move, but that doesn’t mean they can’t happen. Clearly, that’s been illustrated.
If GameStop was the leader the first time and AMC stock the second time, who’s to say it can’t lead again a third time?
The company has raised plenty of cash over the last few months, and its fundamentals have a real chance at improving with many studio releases returning to theaters. Furthermore, AMC CEO Adam Aron recently teased a potential partnership with GameStop.
Does that give these stocks the best odds for a fourth-quarter rally? Perhaps.
Meme Stocks to Buy: BlackBerry (BB)
For AMC, I asked why it couldn’t lead a third charge higher. But should we be asking if another stock is in the running to trigger a short-squeeze trade? And if that’s the case, we could be looking at BlackBerry as a potential candidate.
BlackBerry was fresh off multi-month lows, but it gave us an intraday burst of 15.5% on better-than-expected earnings. We’ve since seen the stock trickle lower, but at around $10, it’s clear this stock could enjoy a nice upside squeeze should investors look for a solid low-price stock to ramp higher — here are six others, too.
If this stock can get back above its major moving averages, the key $12 level is in sight. Above that mark, and technically speaking, we could see some sparks.
In January, BlackBerry made a push toward $30 before pulling back. Following a higher low, the stock surged past $20 again in June. Now making another higher low, is a squeeze back in play? It could be.
While the company is slogging through a down year, it’s more than halfway through fiscal 2022. For the next fiscal year, analysts expect more than $900 million in sales and a potential return to profitability.
Beyond Meat (BYND)
Beyond Meat seems like one of the larger companies on the list of meme stocks. Not that investors have never heard of GameStop, AMC or BlackBerry before, but these names fell into an area of obscurity over the last few years.
During that time, though, Beyond Meat had enjoyed several nice years of gains. The stock is still up massively from its public debut, despite falling 55% from the highs (made in 2019). Keep in mind, the stock priced its IPO at $25, opened at $46 and is still trading above $100 despite the current correction.
All during that time, Beyond Meat garnered plenty of attention, built up a strong brand regardless of whether consumers loved or hated it and attracted a big-time valuation.
While Beyond Meat hasn’t been trading well lately, not many growth stocks have. That said, this name has put together some nice pops lately. In January, the stock gave us a three-day 65% burst, followed by another 60% rally from the May low to the June high.
The company continues to expand its product offerings and where its products are available. Will that lead to a Q4 pop? Only time will tell.
Meme Stocks to Buy: Ocugen (OCGN)
A lot of investors have great expectations for Ocugen. The company is not only working on a treatment for blindness, but it’s also working on a vaccine for Covid-19. Known better as ocular biotherapeutics, this clinical stage bio company has nice upside potential.
The stock has been wedging into a tighter and tighter wedge, but this can lead to explosive upside gains. The stock enjoyed a 1,200% rally from Jan. 27 to Feb. 8, and another 200% rally from late April to early May.
In regards to its Covid vaccine, there is plenty of promise. It just finished its phase 3 trial and showed promising results. While the overall efficacy rate was lower than the vaccines from Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA), the company’s vaccine had a strong efficacy rate against the Delta variant.
That said, this is a revenue-less company at the moment. So while the market may becoming saturated with vaccines, approval of this could get money flowing through the Ocugen’s income statement.
Look for a squeeze over downtrend resistance to get the action started.
Rocket Lab USA (RKLB)
Rocket Labs actually has a pretty constructive chart as far as potential squeeze plays go. The stock did enjoy a nice pop in March, but the real squeeze was actually much more recent. Shares more than doubled at the start of the month.
Now pulling back, we have a solid set up as the 21-day moving average steps in as support. Let’s see if the bulls can rile this one up for another push higher.
The stock is sitting with a near-$7 billion market cap, so it’s not exactly obscure. That said, it’s not something discussed as much as BlackBerry or Beyond Meat.
Still, that won’t stop the algos and short-squeezers from sniffing this one out and running it higher. Also, keep aerospace companies on your radar. Positive news for Virgin Galactic (NYSE:SPCE), Elon Musk’s SpaceX or Jeff Bezos’ Blue Origin could give a pop to Rocket Labs.
Meme Stocks to Buy: Sundial Growers (SNDL)
For my last selection, I was going to write about Gogo (NYSE:GOGO), but thanks to management’s positive financial update, the stock soared almost 40% on Sept. 28 and hit new highs. Instead, let’s look at Sundial Growers.
This one’s a true penny stock, trading at just under 70 cents a share. It’s had several stints above $1 and has even rallied to $1.50 or more several times. However, it’s best rally this year took shares up to $3.96.
While the stock is trending near multi-month lows, we can’t rule out an extreme squeeze higher. That’s particularly true if the cannabis stocks gain some renewed interest. Canopy Growth (NASDAQ:CGC), Aurora Cannabis (NASDAQ:ACB) and others have been trading too well lately, but if that changes, then we could see a strong bid come in for Sundial too.
Plus, its sub-$1.5 billion market cap makes it an easy one for investors to jam higher.
Who knows, maybe an earnings report will drive this one higher. Analysts expect 66% revenue growth next year, with the consensus expectations of $74 million for the year. However, the high estimate is sitting up near $100 million. If management provides a strong outlook, it could kickstart a larger rally.
On the date of publication, Bret Kenwell 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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.