Robinhood has been in the news lately for a couple of different reasons. First, the company is looking to go public and recently filed a Form S-1. Companies file this form to register with the U.S. Securities and Exchange Commission before they go public. From this form, we learned that Robinhood had a great quarter.
Robinhood had 18 million net cumulative funded accounts by the end of the first quarter, a 44% jump from the end of 2020. This means that the company is doing quite well, and it continues to gain traction with a younger investor audience. The company has also been in the news as retail traders have been driving up the share prices of companies that may not reflect their fundamentals, also called meme stocks.
That’s why I took a look at Robinhood’s Top 100 list to get an idea of what stocks are popular with investors on their platform right now. While I saw some common names such as Tesla (TSLA) and Amazon (AMZN), I also saw a few meme stocks, including AMC Entertainment Holdings, Inc. (AMC). This led me to go through the top 100 list to identify my top three stocks, including Apple Inc. (AAPL), Nokia Corp. ADR (NOK), and Walmart Inc. (WMT).
Apple Inc. (AAPL)
While the iPhone makes up most of AAPL’s total revenue, the company has been benefiting from continued momentum in its Services segment. This has been driven by growth in the App Store, Cloud Services, Music, advertising, and AppleCare. The company’s near-term prospects look strong, driven by new 5G supported iPhones.
In addition, the company’s revamped line-up of iPad and Mac devices, the healthcare-focused Apple Watch, and an expanding App Store ecosystem bode well for the firm. The company is also gaining traction among enterprises, especially after its renewed focus on user privacy, reflected in its latest operating system updates.
AAPL also sees greater penetration in emerging markets, especially in China with regards to its 5G enabled iPhone 12 devices. The company has an overall grade of B, which translates into a Buy rating in our POWR Ratings system. The company has a Sentiment Grade of A as it is well-liked by Wall Street Analysts.
Thirty-three out of forty-one analysts who cover the stock rate it a Strong Buy or Buy. AAPL also has a Quality Grade of B, driven by solid fundamentals. The company had a whopping $69.8 billion in cash as of the most recent reported quarter, compared to only $13 billion in cash. AAPL also has a high return on equity of 110.3% and an ROIC of 41.4%.
We also provide Growth, Value, Momentum, and Stability grades for AAPL, which you can find here. AAPL is ranked #23 in the B-rated Technology – Hardware industry. You can find other top stocks in the industry by clicking here.
Nokia Corp. ADR (NOK)
NOK is a leading vendor in the telecommunications equipment industry. The company’s network business derives revenue from selling wireless and fixed-line hardware, software, and services. Its technology segment licenses its patent portfolio to handset manufacturers and makes royalties from Nokia-branded cellphones.
The company is poised to benefit from the increasing demand for next-generation connectivity. It has been developing its 5G portfolio. It currently has 166 commercial 5G deals with communications service providers, more than 230 5G engagements with operators, and 66 live 5G networks, both public and private.
NOK has also been strengthening its AirScale product and advancing the capabilities of its ReefShark chipset. Its installed base of high-capacity AirScale products enables customers to upgrade to 5G quickly, and it’s ReefShark chipset dramatically eases 5G network roll-out. The company has an overall grade of B and a Buy rating in our POWR Ratings system.
NOK has a Growth Grade of A, which isn’t surprising as its EBITDA has grown an average of 32.1% per year over the past three years. The company also has a Value Grade of B due to its low valuation. The stock currently has a forward P/E of 18.35. Its price-to-sales ratio of 1.2 is also well below the industry average.
For the rest of NOK’s grades (Momentum, Stability, Sentiment, and Quality), click here. NOK is ranked #8 in the B-rated Technology – Communication/Networking industry. For more top stocks in this industry, click here.
Walmart Inc. (WMT)
WMT was already doing well before the pandemic but performed even better on the back of rising demand for essentials amid the pandemic. The stay-at-home trends also boosted its e-commerce sales which don’t appear to be slowing down anytime soon. As most of the towns and cities in the U.S. have opened back up, the country’s largest retailer appears to be in great shape.
In terms of e-commerce, one area where the company is ramping up is deliveries. This has been due to the rising demand for online groceries. The company invested in DroneUp, introduced Carrier Pickup by FedEx (FDX), launched the Walmart + membership program, and started drone delivery pilots in the United States with Flytrex and Zipline.
WMT has also started a pilot with Cruise to test grocery delivery through self-driven all-electric cars. Plus, it announced an alliance with DoorDash (DASH) to deliver prescriptions from pharmacies of Sam’s Club. These initiatives should serve the company well in the months ahead. WMT has an overall grade of A, translating into a Strong Buy rating in our POWR Ratings system.
The company has a Stability Grade of A, which means its growth figures and price-performance have been consistent. For instance, WMT’s stock has a low beta of 0.58, indicating that its stock is almost half as volatile as the market. The company also has a Sentiment Grade of A as it is well-liked by the “smart crowd” as thirty-one analysts rate the stock a Buy or Strong Buy.
To access the rest of WMT’s grades (Growth, Value, Momentum, and Quality), click here. WMT is ranked #1 in the A-rated Grocery/Big Box Retailers industry. For other top-ranked stocks in this industry, click here.
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This article was written by David Cohne, Chief Value Strategist for StockNews.com. David has helped investors find the most profitable stocks for over 20 years
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AAPL shares fell $148.48 (-100.00%) in premarket trading Friday. Year-to-date, AAPL has gained 12.61%, versus a 17.34% rise in the benchmark S&P 500 index during the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the Chief Value Strategist for StockNews.com and the editor of POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services companies, hedge funds, and online publications. David enjoys researching and writing about stocks and the markets. He takes a fundamental quantitative approach in evaluating stocks for readers. More…