In this article, we discuss the 10 best stocks to invest your $1000 according to Reddit. If you want to see more top stock picks of Redditors for building out a $1,000 portfolio, check out the 5 Best Stocks to Invest Your $1000 According to Reddit.
The frenzy around meme stocks like Bed Bath & Beyond Inc. (NASDAQ:BBBY) and AMTD Digital Inc. (NYSE:HKD) is dying down, and retail investors will possibly start reducing their stock purchases through the end of this year, as per research firm Vanda. On August 25, Markets Insider reported that average inflows over the last week in U.S. securities came in at $1.2 billion per day, compared to a year-to-date average of $1.24 billion a day.
Vanda expected average inflows of $1.3 billion to $1.4 billion, supported by the meme stock frenzy. However, the firm observed “weakening retail demand” which it believes “is a function of the fresh losses in meme stocks trading”. AMC Entertainment Holdings, Inc. (NYSE:AMC) and GameStop Corp. (NYSE:GME), the hottest meme stocks of 2021, are also trading lower.
Apple Inc. (NASDAQ:AAPL) is back to being a market leader after facing a bloodbath in the first half of the year with billions of dollars lost in market value, and retail investors are perhaps the biggest drivers of this rally. Lucas Mantle, a data scientist at Vanda Research, told Bloomberg on August 9:
“Retail investors have been strong buyers of Apple over the past couple of months, first attempting to buy the dip, then buying into the recent recovery.”
On August 4, Reuters reported that retail investors find stocks and bonds to be more difficult to understand as compared to crypto. A World Economic Forum survey in collaboration with BNY Mellon and Accenture observed that 29% of retail investors did not understand the cryptocurrency market, while approximately 40% said that they did not understand stocks or bonds. Retail investors sometimes look for help in order to build their portfolios from scratch, since they do not understand the mechanics of the stock market entirely. Some of the best stocks to invest your $1,000 in according to Reddit include Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc. (NASDAQ:META), and Netflix, Inc. (NASDAQ:NFLX).
Photo by Souvik Banerjee on Unsplash
Our Methodology
We searched the r/investing and r/stocks subreddits to see the latest threads regarding investment advice for portfolios. We selected the most prominent stocks that Redditors suggested beginners with $1,000 should invest in.
We have ranked the list according to the hedge fund sentiment around the securities, which was gauged from Insider Monkey’s Q2 2022 database of about 900 hedge funds.
Best Stocks to Invest Your $1000 According to Reddit
10. Canopy Growth Corporation (NASDAQ:CGC)
Number of Hedge Fund Holders: 10
Canopy Growth Corporation (NASDAQ:CGC) is a Canadian company specializing in the production and sale of cannabis and hemp-based products for recreational and medical use. The company distributes its products in Canada, the United States, and Germany. Redditors believe that Canopy Growth Corporation (NASDAQ:CGC) is a good idea for a $1,000 portfolio. The stock has rallied in the past few weeks, climbing 50% in the last month as of August 26, as hopes are high that the United States will legalize weed on the federal level.
On August 8, Piper Sandler analyst Michael Lavery lowered the price target on Canopy Growth Corporation (NASDAQ:CGC) to $2.50 from $3 and kept an ‘Underweight’ rating on the shares. The company’s sales remain pressured across core business segments, the analyst informed investors. He said distribution via retail stores is potentially the primary driver for profitability in the Canadian market. Similarly, Canaccord analyst Matt Bottomley lowered the price target on Canopy Growth Corporation (NASDAQ:CGC) to C$2.75 from C$3.50 on August 8 and maintained a ‘Sell’ rating on the shares.
According to Insider Monkey’s Q2 data, 10 hedge funds were bullish on Canopy Growth Corporation (NASDAQ:CGC), compared to 14 funds in the prior quarter. Israel Englander’s Millennium Management is the leading position holder in the company, with 3.15 million shares worth about $9 million.
In addition to Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc. (NASDAQ:META), and Netflix, Inc. (NASDAQ:NFLX), Redditors are pouring into Canopy Growth Corporation (NASDAQ:CGC) lately.
9. AST SpaceMobile, Inc. (NASDAQ:ASTS)
Number of Hedge Fund Holders: 11
AST SpaceMobile, Inc. (NASDAQ:ASTS) is a Texas-based provider of space-based cellular broadband networks for mobile phones. On August 15, the company reported a Q2 GAAP loss per share of $0.06. Its revenue of $7.26 million climbed 162.1% year-over-year. AST SpaceMobile, Inc. (NASDAQ:ASTS) concluded the June quarter with liquidity of $202.4 million. The stock has gained 66.25% in the last month, roughly 68% in the last six months, and 44.40% year-to-date as of August 26. The rally was spurred by AST SpaceMobile, Inc. (NASDAQ:ASTS)’s five-year 5G deal with Nokia Oyj (NYSE:NOK) in late July.
On August 18, Deutsche Bank analyst Bryan Kraft maintained a ‘Buy’ recommendation on AST SpaceMobile, Inc. (NASDAQ:ASTS) but lowered the price target on the shares to $30 from $31 after the Q2 results. The analyst remains bullish on AST SpaceMobile, Inc. (NASDAQ:ASTS)’s long-term business opportunity and said the company is on its way to successful execution.
Among the hedge funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management is a significant position holder in AST SpaceMobile, Inc. (NASDAQ:ASTS), with 716,000 shares worth about $4.5 million. Overall, 11 hedge funds were long AST SpaceMobile, Inc. (NASDAQ:ASTS) at the end of Q2 2022, with combined stakes worth $19.4 million, compared to the same number of funds in the earlier quarter, holding stakes in the company valued at $32.6 million.
8. Clover Health Investments, Corp. (NASDAQ:CLOV)
Number of Hedge Fund Holders: 11
Clover Health Investments, Corp. (NASDAQ:CLOV) was incorporated in 2014 and is based in Franklin, Tennessee. The company operates as a medicare advantage insurer in the United States via its Clover Assistant, a software platform that offers preferred health plans for medicare-eligible consumers. On August 8, Clover Health Investments, Corp. (NASDAQ:CLOV) reported a Q2 net loss of $104.2 million. The company’s revenue of $847 million was up 105.3% year-over-year, and outperformed the market consensus by $41.38 million. According to its FY2022 outlook, the company expects Insurance membership to average 84,000-85,000, representing a growth rate of 26%-27% year-over-year. Total revenues are projected to lie in the range of $3 billion to $3.4 billion, versus a consensus estimate of $3.31 billion.
On August 9, Citi analyst Jason Cassorla raised the price target on Clover Health Investments, Corp. (NASDAQ:CLOV) to $3.50 from $3 and maintained a ‘Neutral’ rating on the shares after the Q2 results. While trends are positive from a membership perspective, “all eyes continue to be on profitability generation,” the analyst told investors.
According to Insider Monkey’s Q2 data, 11 hedge funds were bullish on Clover Health Investments, Corp. (NASDAQ:CLOV), compared to 17 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors held the largest stake in the company, with 2.8 million shares worth over $6 million.
7. Veru Inc. (NASDAQ:VERU)
Number of Hedge Fund Holders: 13
Veru Inc. (NASDAQ:VERU) is a Florida-based oncology biopharmaceutical company that develops medicines for managing multiple cancers. Redditors were keen on adding Veru Inc. (NASDAQ:VERU) to a $1,000 portfolio. On August 11, the stock gained approximately 20% as investors looked beyond the Q2 results that missed Wall Street’s consensus and focused on the likely upside from emergency use approvals for Veru Inc. (NASDAQ:VERU)’s COVID-19 treatment, Sabizabulin. Overall, the stock has climbed 198% in the last six months as of August 26.
Cantor Fitzgerald analyst Brandon Folkes raised the price target on Veru Inc. (NASDAQ:VERU) to $30 from $24 on August 11 and maintained an ‘Overweight’ rating on the shares after the company posted its Q2 results. The analyst said the increased price target was supported by the higher probability of success for Veru Inc. (NASDAQ:VERU)’s EUA of Sabizabulin for the treatment of hospitalized COVID-19 patients at high risk for acute respiratory distress syndrome.
Among the hedge funds tracked by Insider Monkey, Peter Kolchinsky’s RA Capital Management is the biggest stakeholder of the company, with 7.90 million shares worth $89.3 million. Overall, 13 hedge funds were bullish on Veru Inc. (NASDAQ:VERU) at the end of June 2022, up from 9 funds in the earlier quarter.
6. Vale S.A. (NYSE:VALE)
Number of Hedge Fund Holders: 27
Vale S.A. (NYSE:VALE) produces and sells iron ore and iron ore pellets, which are considered raw materials for steelmaking in Brazil and internationally. The company operates through two segments – Ferrous Minerals and Base Metals. On July 29, Vale S.A. (NYSE:VALE) reported its Q2 results, posting EPS of $1.32, above market estimates by $0.52. However, its revenue slid 33.1% year-over-year to $11.16 billion, missing analysts’ predictions by $450 million. The company also approved $3 billion in dividends and interest on capital to be paid in September. The amount was calculated based on 1H2022 results, in line with Vale S.A. (NYSE:VALE)’s Shareholder Remuneration Policy.
Itau BBA analyst Daniel Sasson downgraded Vale S.A. (NYSE:VALE) to ‘Market Perform’ from ‘Outperform’, slashing the price target to $15 from $20. Vale S.A. (NYSE:VALE)’s cash generation will potentially decline due to weakening momentum in China’s steel production, the analyst told investors. The analyst said China’s commitment to its zero-COVID policy has been hindering economic growth, and its property sector has not improved so far. He now expects iron ore to average $115 a ton in 2022, down from $125 previously.
According to Insider Monkey’s Q2 data, 27 hedge funds were bullish on Vale S.A. (NYSE:VALE), with collective stakes worth $1.78 billion. Tang Capital Management is a prominent stakeholder of the company, with 4.6 million shares worth $52.3 million.
Like Apple Inc. (NASDAQ:AAPL), Meta Platforms, Inc. (NASDAQ:META), and Netflix, Inc. (NASDAQ:NFLX), Vale S.A. (NYSE:VALE) is one of the stocks that Redditors are monitoring lately.
In its Q1 2022 investor letter, Grantham Mayo Van Otterloo & Co. LLC, an asset management firm, highlighted a few stocks and Vale S.A. (NYSE:VALE) was one of them. Here is what the fund said:
“Let’s look at Vale S.A. (NYSE:VALE), the world’s largest iron ore producer, as a case study for how shareholders can be rewarded. Vale’s stock price is about where it was at the beginning of last year. Despite the market’s lack of enthusiasm, the company generated about $20 billion of free cash flow last year. Not bad for a company with a market cap of a little over $100 billion and no substantive debt as of the end of March. 4 What did the company do with all that cash? Last year, Vale S.A. (NYSE:VALE) paid out about $9 billion in regularly scheduled dividends and distributed another $10 billion between extra dividends and share repurchases. Combined with dividends distributed in the first quarter of this year and a recently announced share repurchase, Vale has returned or announced the return of over $33 billion since the beginning of last year, almost a 32% yield relative to the market cap of the company. Not a bad way to win.”
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Disclosure: None. 10 Best Stocks to Invest Your $1000 According to Reddit is originally published on Insider Monkey.
