ContextLogic (NASDAQ:WISH) may meet all the requirements for a meme stock, but it also has something other meme stocks don’t…
Meme trading is a phenomenon that will be here for a while, so it’s worth learning how take advantage of the current market climate.
One problem with trading meme stocks their irrational behavior. Non-traditional reasons for investing, like free popcorn, soon become valid reasons to adore certain stocks, making prices go wild, in unpredictable ways. But every now and then, meme stock traders make solid decisions, unknowingly, on which stocks to pour their support into. This usually isn’t the case, but sometimes the stars align.
This leads a deserving stock’s value to shoot up, albeit for the wrong reasons.
WISH is one such stock.
Recently, ContextLogic drew retail investors’ attention due to its small float and high short interest. It’s ripe for a social momentum trade. It checks all of the boxes meme stocks are required to, and it’s starting to see the effects of that. WISH stock surged 50% yesterday and popped off another 40% today, before since fading into the red.
That’s what happens with all of these meme stocks — live by the meme, die by the meme. Sometimes meme stocks plummet after their raging success. And then sometimes they become reanimated later on down the line when hype has a chance to rebuild, as with GameStop ( NYSE:GME) for example.
But the common theme is that nobody knows when these stocks will rise or for how long.
The Case for WISH Stock
That’s where ContextLogic has an upper hand on other stocks affected by social momentum trading — there is actually fundamental turnaround playing out here that could push the stock towards $20.
Wish.com is a value-first mobile commerce platform that is basically a digital version of a garage fire sale. The physical market for this is huge. Just look at how popular stores like Dollar Store, TJ Maxx and Ross have become. They’re everywhere.
Big companies have been built on the physical value-first retail market.
Now, big companies will be built on the digital value-first market. And Wish.com will be one of them.
The niche that Wish.com dominates is essentially connecting super cheap Chinese retailers with European and American shoppers looking for a steal. Sometimes the products aren’t quite what is advertised. But shoppers know this. Something that costs a few bucks could turn out to be worthless… Or it could be a decent quality item obtained at an insane bargain.
Shopping on Wish.com is a treasure hunt. When you find a treasure — that solid product for only $2 — you’re on cloud nine.
The other thing we really like about Wish.com is its team. Though you might not expect it from a “digital garage sale” company, their personnel are extremely qualified to lead this company. Wish.com’s founder is a former Google exec, for example, and their head of data science comes from Airbnb (NASDAQ:ABNB) — the same individual who leveraged machine learning algorithms to create hyper-personalized shopping experiences.
Long story short, in value-first mobile commerce, Wish.com is unique and technologically sound enough to emerge as a big player in this market.
Meme stock mania will fade. WISH stock will fall. But, when it does fall, buy the dip. This stock could power on to $20 on strong fundamentals in the medium-term. An upcoming dip from meme trading fallout presents a perfect opportunity to get into ContextLogic at a great price.
While WISH stock ranks among my top stocks to buy in ecommerce, there are plenty of others I like.
Eight more ecommerce stocks, to be exact. All of which you can find when you sign up to become a member of my premiere Innovation Investor service.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s the theme of his premiere technology-focused service, Innovation Investor. To see Luke’s entire lineup of innovative cutting-edge stocks, become a subscriber of Innovation Investor today.