There was a time not too long ago when millionaire investors and relatively small (and often new) investors were interested in decidedly different stocks. The former group tended to pick more established, less risky names, while the latter often made their foray into the market with more speculative trades.
Gradually over the course of the past few years, though, these two camps have gotten on the same page with many of their picks. The credit goes to the new and smaller investors, who -- empowered by more trading tools and technology -- are stepping into stocks with staying power, some using the online trading platform Robinhood Markets.
Here's a closer look at two stocks that are as appealing to millionaires as they are to small investors using Robinhood.
1. Rocket Companies
You may be more familiar with Rocket Companies (RKT -0.52%) than you realize. This fintech outfit is parent to several financial services brands, including its highly advertised mortgage loan brand Rocket Mortgage. Its other businesses include Amrock Insurance, LowerMyBills, For Sale By Owner, and digital advertising outfit Core Digital Media. Loans are its core business. The company generated nearly $1.5 billion worth of lending-based net revenue during the quarter ending in March.
This lending focus, of course, is also a problem. Rising interest rates, an increasingly uncertain economy, and the fact that so many consumers secured new loans last year (when rates were lower) meant Rocket's first-quarter loan revenue for 2022 was more than halved year over year. The rest of this year isn't looking much better. That's why shares are down more than 40% since the end of 2021, and lower to the tune of 60% for the past 12 months; some investors saw the headwind brewing before its arrival.
However, not every onlooker is standing by waiting to see what happens next.
Within just the past couple of weeks, Rocket CEO Jay Farner has purchased nearly 90,000 shares of Rocket, after purchasing a comparable number of shares in May and early June. He's now holding 2,852,307 shares of the company he's leading, with a big chunk of them having been acquired in the midst of the stock's recent rout. And he's not the only insider eating his own cooking, so to speak. A bunch of other executives have also taken the purchase plunge.
And who could blame them? While most everyone agrees this year's going to be a bust compared to a record-breaking 2021, the business should stabilize beginning next year. The analyst community is predicting revenue to be flat in 2023 after this year's likely 44% slide, though per-share earnings are projected to swell from this year's forecast of $0.39 to $0.80 in the coming year. Higher interest might crimp demand then, but higher interest rates also make for higher-margin loans.
2. Roblox
A handful of insiders and executives have also recently been nibbling on Roblox (RBLX -0.74%), but they're not the most noteworthy nibble. Nor are the recent purchases made by Atticus Wealth Management, Dynamic Advisor Solutions, and Caprock Group (although that buying interest is also worth noting). Rather, the most telling of the recent millionaire purchases of Roblox stock is the 572,000-share investment made by Ark Invest CEO Cathie Wood for the Ark Innovation ETF in June, or roughly $17 million worth of the stock at that time. The fund now holds a little more than 5.7 million shares of Roblox, a position that's been steadily growing since late last year as the stock's price has deteriorated.
The move may end up being as brilliant as it is bold. Roblox is one of the few companies actually capable of offering a true metaverse platform to third parties right now.
While its initial virtual worlds were meant to serve as arenas for online video gamers, the underlying tech has potentially infinite uses. Athletic apparel brand Nike tapped Roblox in November to build a digital "Nikeland," for instance, and since then, brands including Gucci and Ralph Lauren as well as Sony Music and Spotify Technology have begun experimenting with Roblox's platform.
It remains to be seen what the final metaverse -- or metaverses -- will look like when complete. Roblox factors heavily into the picture though as a company, in light of all the buying interest in the stock from professional and amateur stock pickers alike.
