Individual investors are playing a more active role in shaping the broader market than ever before, and Robinhood's commission-free platform has brought an influx of trading into equities markets and played a major role in shaping performance for some stocks. Because of this, even investors who don't use the trading platform have started to pay attention to which stocks are popular among its users.
Some stocks favored by the growing ranks of retail investors are overly speculative, but there are others that look primed for strong performance and could see their share prices buoyed by support among individual investors. Read on for a look at three stocks that are very popular with Robinhood investors that are worth buying this month.
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1. Walt Disney
Despite the coronavirus pandemic shuttering operations at its parks and resorts segment, crushing its theatrical-film business, and creating programming challenges for its media-networks business, Walt Disney (DIS 1.10%) stock managed to rocket to a new high. The stock currently trades in the neighborhood of $200 per share, up roughly 70% over the last year, and it looks like the media giant still has room to run.
Incredible success for the company's Disney+ streaming platform has transformed how investors are looking at the company, and it currently stands as the ninth most-held stock among Robinhood users. Disney has just started tapping into its incredible wealth of properties to create new content for its streaming platform.
Its recently released WandaVision ranked as the most-watched show in the world during its run, and The Mandalorian has proven to be a huge hit in its first two seasons. With lots more content in the Marvel Cinematic Universe, Star Wars, and tons of other blockbuster Disney properties on the way for the streaming service, the House of Mouse could wrestle the streaming crown from Netflix far sooner than almost anyone thought possible.
As the world recovers from the coronavirus pandemic, Disney looks poised to emerge stronger than ever. Recovery for the company's parks and theatrical-film segments will make a huge difference, and massive growth for Disney+, Hulu, and other streaming services in the company's catalog has mitigated the risk posed to its media-networks segment by cord-cutting trends. Disney has shown that it can stand the test of time.
2. Zynga
Video game publisher Zynga (ZNGA) ranks as the 44th most-held company on Robinhood, and it's not hard to see why traders on the platform like the stock. The video game publisher has a strong collection of franchises and development studios, and it certainly doesn't hurt that Zynga is in the headlines as the potential target for an acquisition.
Tech giants including Microsoft and Tencent have been making huge purchases in the gaming space, and midsize players are also making big moves. Following the announcement that Electronic Arts would be acquiring Zynga's mobile publishing rival Glu Mobile in a $2.4 billion all-cash deal, eyes have turned to Zynga as the next potential buyout target.
It wouldn't be surprising to see Zynga get bought out at a premium. However, a bullish case for Zynga is hardly dependent on a possible acquisition scenario.
The video game publisher has been on its own acquisition spree over the last half-decade, buying up developers that can bring new properties under its corporate umbrella and help power growth. Most recently, it acquired Echtra Games, and the company's new studio will be collaborating with other internal teams to create a new role-playing game franchise.
Zynga is releasing updates for its core series, launching new properties, and continuing to look for promising development studios that can help accelerate growth, and has multiple avenues to success as its own company. Acquisition potential could help put a floor on the company's share price, but either way, the stock looks poised to be a long-term winner.
3. Ford
Electric-vehicle (EV) innovator Tesla came in as the second most-held stock on Robinhood at the start of March, but investors may be better off going with the platform's fourth most-held company: Ford (F 1.01%). While Tesla has played an undeniable role in bringing EVs into the mainstream, competition is heating up, and Ford looks better positioned to deliver strong returns amid a recent pullback for highly growth-dependent EV stocks.
Ford has a market capitalization of roughly $50 billion and is valued at approximately 11 times this year's expected earnings and 0.35 times this year's expected sales. Meanwhile, Tesla has a market capitalization of roughly $540 billion, even after a recent pullback, and trades at approximately 136 times expected earnings and 11 times expected sales. The auto industry has always been highly competitive, and Ford stock looks like a more reasonable investment for benefiting from growth for EVs over the next decade.
Ford will have plenty of opportunities for growth in the EV space over the long term, and the company's industry-leading position in the truck market gives it a strong foundation as consumers shift from internal-combustion-engine-based vehicles to electrics. Ford stands out as a reasonably valued business that has shown it can navigate cyclical swings, and the stock stands out as an attractive way to benefit from the growth of EVs in an otherwise volatile market.
