In this article, we discuss the 10 Reddit stocks to buy in November. If you want to skip our detailed analysis of these stocks, go directly to the 5 Reddit Stocks to Buy in November.
Retail traders, who often use internet platform Reddit to exchange investment ideas, have helped push the social media firm into the global spotlight. Amid tough competition, the user growth of Reddit has significantly lagged behind peers like Twitter and Facebook over the years. However, times are changing. According to a report in the Financial Times, the advertising revenue of Reddit jumped 192% year-over-year in the second quarter and crossed $100 million for the first time. The firm also raised $700 million at a funding round in August that helped push the valuation beyond $10 billion. The numbers indicate that the company only lags behind the TikTok platform in terms of percentage growth over the past year among peers. Retail traders, who use Reddit forums like WallStreetBets and Cryptocurrency, are responsible for much of this growth.
Since these retail traders have also become an important market force in recent months, there is increased interest around their activities on Reddit. Investors who want to get a sense of the kind of sectors that these traders prefer should check out some of the top Reddit stocks to buy in November that include Peloton Interactive, Inc. (NASDAQ:PTON), Cloudflare, Inc. (NYSE:NET), and Penn National Gaming, Inc. (NASDAQ:PENN), among others discussed in detail below.
Our Methodology
These were picked from the hype around the companies on different Reddit forums related to finance. The business fundamentals of each along with analyst ratings are discussed below to provide readers with some context for their investment decisions.
The hedge fund sentiment around each stock was calculated using the data of 873 hedge funds tracked by Insider Monkey.
Why pay attention to hedge fund holdings? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021 our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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Reddit Stocks to Buy in November
10. Rivian Automotive, Inc. (NASDAQ:RIVN)
Number of Hedge Fund Holders: N/A
Rivian Automotive, Inc. (NASDAQ:RIVN) markets electric vehicles geared towards off-roading and adventure travel. The company debuted on the market on November 10, with shares surging as much as 53% from the initial price of $78 per share. The firm finished the first day of trading with a valuation of around $100 billion, the biggest initial public offering globally so far this year. Rivian is backed by ecommerce giant Amazon and carmaker Ford.
The rally in Rivian Automotive, Inc. (NASDAQ:RIVN) stock continued on the second day of trading, with the stock gaining 18% amid chatter on Reddit forums often frequented by retail investors who are an important market force.
Rivian Automotive, Inc. (NASDAQ:RIVN) has already landed 55,400 pre-orders for the R1S SUV and the R1T pickup truck it markets. It also has a deal with Amazon to build 100,000 electric vans for the retail giant.
Just like Peloton Interactive, Inc. (NASDAQ:PTON), Cloudflare, Inc. (NYSE:NET), and Penn National Gaming, Inc. (NASDAQ:PENN), Rivian Automotive, Inc. (NASDAQ:RIVN) is one of the stocks attracting the attention of retail investors.
9. ReWalk Robotics Ltd. (NASDAQ:RWLK)
Number of Hedge Fund Holders: 3
ReWalk Robotics Ltd. (NASDAQ:RWLK) is a healthcare equipment firm that focuses on the development of wearable robotic exoskeletons for people with mobility impairments or other medical conditions. The company recently posted earnings for the third quarter, reporting a revenue of close to $2 million, up 162% year-on-year and beating market predictions by $0.37 million. The share price of the firm jumped over 5% after the release of earnings.
By far the biggest jump in ReWalk Robotics Ltd. (NASDAQ:RWLK) stock came on November 5 when the share price climbed over 50% after regulatory bodies awarded the Breakthrough Device designation to ReBoot, a battery-powered orthotic exo-suit being developed by ReWalk.
Among the hedge funds being tracked by Insider Monkey, New Jersey-based investment firm Sabby Capital is a leading shareholder in ReWalk Robotics Ltd. (NASDAQ:RWLK) with 1.3 million shares worth more than $2.3 million.
8. Progenity, Inc. (NASDAQ:PROG)
Number of Hedge Fund Holders: 6
Progenity, Inc. (NASDAQ:PROG) makes and sells molecular testing products. The stock has surged in the past weeks, returning 38% to investors in the past month as the firm announced that it had been granted patents related to a new ingestible therapeutics technology it was developing. The new technology will help deliver drugs being developed by drug giants like Pfizer, a key growth catalyst highlighted by Redditors.
HC Wainwright analyst Joseph Pantginis recently initiated coverage of Progenity, Inc. (NASDAQ:PROG) stock with a Buy rating and a price target of $4, noting the “differentiated” drug pipeline of the firm.
At the end of the second quarter of 2021, 6 hedge funds in the database of Insider Monkey held stakes worth $34 million in Progenity, Inc. (NASDAQ:PROG), down from 9 in the previous quarter worth $17 million.
7. Cassava Sciences, Inc. (NASDAQ:SAVA)
Number of Hedge Fund Holders: 13
Cassava Sciences, Inc. (NASDAQ:SAVA) is a biotech firm that focuses on the development of drugs for the treatment of neurodegenerative diseases. Even though the short interest on the stock is very high, at over 30%, Redditors have been busy highlighting a recent report in a medical journal that there was no evidence of data manipulation in an article published by Cassava in the journal earlier to highlight efficacy of an Alzheimer’s drug under development.
On September 23, investment advisory B Riley maintained a Buy rating on Cassava Sciences, Inc. (NASDAQ:SAVA) stock with a price target of $108. Mayank Mamtani, an analyst at the advisory, issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Cassava Sciences, Inc. (NASDAQ:SAVA) with 311,538 shares worth more than $26 million.
6. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 26
DraftKings Inc. (NASDAQ:DKNG) operates as a digital sports gaming and entertainment firm. The company posted earnings results for the third quarter on November 5, reporting a revenue of $213 million, up 60% year-on-year. The revenue growth came about as user acquisition, retention and engagement trends continued on a strong trajectory. However, since the third quarter revenue fell below analyst expectations, there was a sell-off of the stock at the market.
Analysts have identified this sell-off as a “buying opportunity”. Craig-Hallum analyst Ryan Sigdahl recently maintained a Buy rating on DraftKings Inc. (NASDAQ:DKNG) stock with a price target of $60, noting the firm would soon be a leader in online gaming and sports betting.
At the end of the second quarter of 2021, 26 hedge funds in the database of Insider Monkey held stakes worth $927 million in DraftKings Inc. (NASDAQ:DKNG), down from 43 the preceding quarter worth $966 million.
In addition to Peloton Interactive, Inc. (NASDAQ:PTON), Cloudflare, Inc. (NYSE:NET), and Penn National Gaming, Inc. (NASDAQ:PENN), DraftKings Inc. (NASDAQ:DKNG) is one of the stocks that hedge funds are buying.
In its Q2 2021 investor letter, Alger, an asset management firm, highlighted a few stocks and DraftKings Inc. (NASDAQ:DKNG) was one of them. Here is what the fund said:
“DraftKings is an online gaming operator. Its legacy Daily Fantasy Sports (DFS) allows users to virtually draft teams of players from professional sports leagues and potentially earn a payout based on how athletes perform. DraftKings Online Sports Betting (OSB) involves the company taking wagers or bets from customers on sporting events. The company’s third offering, Online Casino (iGaming), involves customers betting real money when playing casino games like slots and blackjack online.
DFS is legal in most states, while approximately 25% of the country’s population has access to OSB and approximately 10% has access to iGaming. Within a year, we expect approximately 40% or more of the population to have access to OSB as legalization moves rapidly.
The company reported a strong quarter, with revenues exceeding expectations by more than 30%. We think the stock underperformed due to the time period between the conclusion of March Madness and the start of the NFL season being a weaker betting period and concerns about more intense competition. Concerns around tough comps have also hindered performance of DraftKings shares. We note that monthly state data continues to be robust, showing no signs of slowing from reopening. We also believe DraftKings is increasing its potential to gain market share by moving its tech-platform to SBTech, which is a sports betting platform the company acquired as part of a SPAC deal. Legalization of sports betting by states has also been robust.”
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Disclosure. None. 10 Reddit Stocks to Buy in November is originally published on Insider Monkey.
