In this article, we discuss the 5 stocks Reddit’s WallStreetBets is buying in July 2021. If you want to read our detailed analysis of these stocks, go directly to the 10 Stocks Reddit’s WallStreetBets is Buying in July 2021.
5. NVIDIA Corporation (NASDAQ: NVDA)
Number of Hedge Fund Holders: 80
NVIDIA Corporation (NASDAQ: NVDA) is ranked fifth on our list of 10 stocks Reddit’s WallStreetBets is buying in July 2021. The company’s shares have returned more than 110% to investors in the past year. The firm makes and sells visual computing hardware. On June 28, the company announced that it would be partnering with internet search engine Google to set up an artificial intelligence laboratory that would focus on innovations related to 5G networks. The lab would use Google software and NVIDIA hardware.
On July 1, investment advisory BMO maintained an Outperform rating on NVIDIA Corporation (NASDAQ: NVDA) stock and assigned the firm a price target of $1,000. Ambrish Srivastava, an analyst at the firm, noted the data centre business of the firm in a bullish analysis.
At the end of the first quarter of 2021, 80 hedge funds in the database of Insider Monkey held stakes worth $6.2 billion in NVIDIA Corporation (NASDAQ: NVDA), down from 88 the preceding quarter worth $8.6 billion.
In its Q1 2021 investor letter, Vulcan Value Partners, an asset management firm, highlighted a few stocks and NVIDIA Corporation (NASDAQ: NVDA) was one of them. Here is what the fund said:
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. NVIDIA’s GPUs are at the intersection of a number of important computing trends including the movement to the Cloud, artificial intelligence, autonomous vehicles, edge computing, gaming, and more. We previously owned NVIDIA and sold it in the third quarter of 2020 as the price to value gap closed and our margin of safety was reduced. As with all our MVP companies, we continued to follow NVIDIA closely. Since that time, NVIDIA reported excellent results and its value has compounded rapidly. The technology selloff at the beginning of the year negatively affected the stock price while our estimate of NVIDIA’s value per share increased. This happy combination of events created a margin of safety and an opportunity to once again add NVIDIA to the portfolio.”
4. Clover Health Investments, Corp. (NASDAQ: CLOV)
Number of Hedge Fund Holders: 23
Clover Health Investments, Corp. (NASDAQ: CLOV) stock has returned 34% to investors in the past three months. The company provides health insurance products. It is placed fourth on our list of 10 stocks Reddit’s WallStreetBets is buying in July 2021. On July 6, the share price of the firm dropped by close to 10% as a share lock-up period, which had begun when the firm went public earlier this year, prohibiting those involved in the IPO to sell shares, came to an end. Reddit interest in the firm, which was waning, has increased again in the past few days.
Clover Health Investments, Corp. (NASDAQ: CLOV) shares jumped closed to 8% in premarket trading earlier this month after the firm announced plans to expand its insurance services to more than 100 new counties across the United States.
Out of the hedge funds being tracked by Insider Monkey, San Francisco-based investment firm Greenoaks Capital is a leading shareholder in Clover Health Investments, Corp. (NASDAQ: CLOV) with 96.3 million shares worth more than $728 million.
3. ContextLogic Inc. (NASDAQ: WISH)
Number of Hedge Fund Holders: 25
ContextLogic Inc. (NASDAQ: WISH) is a mobile ecommerce firm based in California. It is ranked third on our list of 10 stocks Reddit’s WallStreetBets is buying in July 2021. The company’s shares have returned 55% to investors in the past four weeks. On July 6, the share price of the firm jumped close to 7% amid an increase in the number of mentions of the stock on Reddit forum WallStreetBets.
On July 6, the Dutch arm of ContextLogic Inc. (NASDAQ: WISH) announced that it had received a payments service license that would allow the company to operate in the European Union region. The share price of the firm jumped more than 5% after the announcement.
Out of the hedge funds being tracked by Insider Monkey, New York-based firm JS Capital is a leading shareholder in ContextLogic Inc. (NASDAQ: WISH) with 8.3 million shares worth more than $131 million.
2. AMC Entertainment Holdings, Inc. (NYSE: AMC)
Number of hedge fund holders: 19
AMC Entertainment Holdings, Inc. (NYSE: AMC) is placed second on our list of 10 stocks Reddit’s WallStreetBets is buying in July 2021. The stock has offered investors returns exceeding 1,072% over the course of the past year. The company operates a movie theatre chain spread all over the globe. On July 2, the share price of the firm plunged by more than 10% after a new short bet against the firm was revealed by Iceberg Research.
On July 6, AMC Entertainment Holdings, Inc. (NYSE: AMC) announced that it would not be increasing share count by up to 25 million. The announcement was made through a filing with the United States Securities and Exchange Commission.
At the end of the first quarter of 2021, 19 hedge funds in the database of Insider Monkey held stakes worth $34 million in AMC Entertainment Holdings, Inc. (NYSE: AMC), up from 16 in the preceding quarter worth $24 million.
In its Q4 2020 investor letter, Mittleman Investment Management LLC, an asset management firm, highlighted a few stocks and AMC Entertainment Holdings, Inc. (NYSE: AMC) was one of them. Here is what the fund said:
“AMC Entertainment (AMC) was our only material loser in Q4, dropping from $4.71 to $2.12 (-55%). I planned on discussing here why it was worth at least the $10 per share that my recently reduced estimate of fair value claimed, but since then AMC raised more cash against their UK holdings and then the stock took off due to speculative players from reddit.com getting involved, so we sold it all around $14 during the last week of Jan. 2021. This was a modest profit for most clients, but a loss for some others, depending on when the account began, so check your statements to see where you came out. And yes, I recognize it as being a dose of good luck, which I heartily accept from the universe as it seemed somewhat lacking in the portfolio of late. After the sale of AMC in late January 2021, our exposure to the movie theater business is now exclusively in Canada via Cineplex, which has a 75% market share and much less leverage on its balance sheet.”
1. GameStop Corp. (NYSE: GME)
Number of Hedge Fund Holders: 13
GameStop Corp. (NYSE: GME) is a video game retailer that also sells other entertainment products. It is placed first on our list of 10 stocks Reddit’s WallStreetBets is buying in July 2021. The company’s shares have offered investors returns exceeding 4,545% over the course of the past twelve months. The stock is one of the most mentioned on Reddit forum WallStreetBets and has become a symbol of the market fight between retail investors and hedge funds.
On July 6, GameStop Corp. (NYSE: GME) announced that it would be leasing a new facility in Nevada as part of expansion plans. According to the company, the new facility could be functional as soon as next year.
Out of the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in GameStop Corp. (NYSE: GME) with 3.2 million shares worth more than $620 million.
In its Q1 2021 investor letter, Rhizome Partners, an asset management firm, highlighted a few stocks and GameStop Corp. (NYSE: GME) was one of them. Here is what the fund said:
“The first quarter saw some bizarre market reactions. Game Stop is a heavily shorted legacy video game retailer that saw its stock price rise from $17 to a peak of $483 within a month. It appears that retail investors on a Reddit.com forum called WallStreetBets used memes to create a viral feedback loop of forced buying. Game Stop reached $20 billion in market cap and had more daily trading volume than Apple at one point. The Game Stop short squeeze became a black swan event for the short sellers. Large hedge funds such as Melvin Capital suffered 50% losses during a short period and required emergency capital injections that resulted in costly dilution. Shorting is difficult and introduces a risk of ruin. This is especially true in situations where a large percentage of the float is shorted. We want to remind you that we hedge our portfolio via index puts, sector puts, and sometimes buying puts directly in our own portfolio companies. However, we rarely short because 1) we are not good at it 2) the potential for brain damage is too high and 3) we want to avoid the risk of ruin.”
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