Record-breaking volatility in broader markets has created a wide range of winners and losers. Another phenomenon that regularly hits the headlines is the number of retail market participants trading on the online investing platform Robinhood. You can even think of the most popular shares on the site as top Robinhood stocks.
Upon close inspection, you may note that the most popular 100 Robinhood stocks are an eclectic group. However, it may also be possible to combine them in different headings, such as tech stocks, stocks under $10, exchange-traded funds (ETFs), electric vehicle (EV) stocks, or travel and leisure stocks.
Robinhood users are generally considered to be more tech-savvy than the typical equity investor. The platform has been heralded as making stock trading more accessible to regular and younger people. It has also affected how other trading platforms operate to an extent.
But there are also dangers when over-relying on a platform such as Robinhood, says Laura Gonzalez, associate professor of finance at California State University, Long Beach.
“Fintech is changing the face of finance, from cradle to grave. This includes wealth management, payments, lending and borrowing, insurance, real estate, and the nature of currency. The disintermediation trend is here to stay and offers new opportunities provided there is enough financial literacy. However, even if more equipped in terms of behavioral impulses, retail investors still face disadvantages in high frequency trading markets. One way to overcome this is to invest longer-term following some analysis of fundamentals.”
Therefore, if you’re one of the market participants interested in following several of these Robinhood stocks, you should do due diligence and invest within your own risk/return profile.
With all that in mind, here are four Robinhood stocks to consider:
- Beyond Meat (NASDAQ:BYND)
- Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B)
- ETFMG Alternative Harvest ETF (NYSEARCA:MJ)
- SPDR S&P 500 ETF (NYSEARCA:SPY)
Robinhood stocks: Beyond Meat (BYND)
52-week range: $48.18 – $181.75
The plant-based food maker Beyond Meat is one of the stocks that gets a lot of short-term trading attention. Earlier in August, the California-headquartered company released lukewarm second-quarter earnings. Its revenue topped the average estimate. However, the revenue of the company’s food-service business declined close to 60 % YoY due to restaurant and fast-food-chain closures during the pandemic lockdown.
Yet, most shareholders are quite hopeful that “weak” parts of the Q2 earnings are all temporary. As our lives increasing normalize in the rest of the year, the company is likely to report stronger metrics. Meanwhile, Beyond Meat has been increasing its partnership with various other well-known brands, including McDonald’s (NYSE:MCD), Starbucks (NASDAQ:SBUX) and Yum! Brands’ (NYSE:YUM), names that followers of Robinhood stocks would be familiar with.
Recent research led by Christopher Gardner of Stanford University discusses the protein-consuming habits of Americans, including various drawbacks and ways to eat better. Both nationwide and globally, the debate on the effect of animal meat on environmental, health, and ethical concerns is indeed increasing.
Early June saw Beyond Meat shares reach new highs for 2020. Year-to-date, BYND stock is up an eye-popping 75%. I expect the company to continue to be traded as one of the most-traded Robinhood stocks in the rest of the year, too.
Berkshire Hathaway (BRK.A, BRK.B)
BRK.A 52-week range: $239,440 – $347,400
BRK.B 52-week range: $159.50 – $231.61
Since the late 1950s, legendary investor Warren Buffett and his long-time partner Charlie Munger have transformed Berkshire Hathaway from a struggling textile manufacturer to a holding company with a market capitalization greater than $475 billion.
In fact, BRK.A stock currently has the highest share price of any company in history. In 1964, each Class A share was just shy of $20. Now each share costs upwards of $293,000 (no, that’s not a misprint, this version of the stock has simply never been split). Therefore, most investors would likely buy shares of BRK.B, not BRK.A.
Berkshire Hathaway’s regular 13F filings with the Securities and Exchange Commission show the holdings in the company. Some of Buffett’s favorite companies are large-cap stocks, consumer brands, stocks that pay dividends and financials, including bank insurance companies and more recently fintech businesses.
Buying into Berkshire Hathaway shares, either directly or indirectly through a fund, offers exposure to a wide range of businesses. Buffett’s current holdings include shares of Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Bank of America (NYSE:BAC), and Coca-Cola (NYSE:KO). You may note that all of these companies are among the most traded Robinhood stocks.
ETFMG Alternative Harvest ETF (MJ)
52-week range: $8.81 – $29.25
Dividend yield (TTM-trailing 12 month): 7.5%
Expense ratio: 0.75% per year, or $75 on a $10,000 investment
Although the ETFMG Alternative Harvest ETF is not one of the widely followed Robinhood stocks, it holds several cannabis stocks that are among the top 100 list on Robinhood.
MJ, which has 36 stocks, tracks the Prime Alternative Harvest index. This benchmark index measures the performance of companies beneﬁting from global medicinal and recreational cannabis legalization initiatives.
Sector allocation of the fund (by weighting) is as follows: pharmaceuticals (56.4%), tobacco (24.7%), biotechnology (9.1%), fertilizers and agricultural chemicals (3.1%), paper products (2.6%), agricultural products (2.4%), and asset management and custody banks (0.6%).
The top 10 holdings make up close to 60% of total net assets, which are around $555 million. MJ’s top three companies are GW Pharmaceuticals (NASDAQ:GWPH), Cronos Group (NASDAQ:CRON), and Canopy Growth (NYSE:CGC).
It also owns shares of the companies that provide ancillary products and services to the cannabis companies. One such name is Scotts Miracle-Gro (NYSE:SMG), which is known for its fertilizer products.
So far in the year, MJ is down about 26%. However, since late March, the fund is up over 50%. Market participants may be able to decrease the volatility of investing in individual marijuana businesses among Robinhood stocks by investing in a thematic ETF like MJ.
SPDR S&P 500 ETF (SPY)
52-week range: $218.26 – $339.08
Dividend yield (TTM): 1.8%
Expense ratio: 0.0945% per year, or $9.45 on a $10,000 investment.
The S&P 500 index, measures the stock performance of the largest publicly traded 500 companies in the U.S. These companies make up around 80% of the overall U.S. stock market’s value and cover approximately 24 separate industry groups.
For many investors, the S&P’s performance shows how U.S. equities, in general, are performing. This capitalization-weighted index is one of the most widely followed equity benchmarks worldwide.
Robinhood stock traders who want to gain exposure to the S&P 500, without necessarily investing in specific stocks listed on the index, have been buying the SPDR S&P 500 ETF, an exchange-traded fund based on the index.
The SPY ETF value proposition is simple: essentially, it tracks the performance of the S&P 500 index. Investors gain exposure to the growth and profitability of U.S.-based businesses without having to rely too heavily on any individual company’s performance.
Microsoft (NASDAQ: MSFT), Apple, and Amazon are the ETF’s three largest holdings, making up about 17% of the fund’s roster. To be exact, SPY holds 505 stocks, owing to multiple share classes for constituents such as Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) and Berkshire Hathaway plus a few others. SPY’s top 10 holdings combine close to 30% of the fund’s list.
SPY started this year around $320, and on Feb. 19, hit an all-time high of $339.08. February and March saw the novel coronavirus become a global pandemic, affecting billions of people worldwide. As the size and nature of the health crisis became apparent, investors began de-risking their portfolios and stocks were rapidly sold off. On March 23, SPY hit a 52-week low of $218.26.
Since then, the comeback for the ETF has been remarkable as the fund has returned over 50% in less than five months. YTD, SPY is up about 4%.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education, including a Ph.D. degree, in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation. As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.