In this article, we will take a look at the 5 stocks that will bounce back according to Reddit. To see more such companies, go directly to 10 Stocks that Will Bounce Back According to Reddit.
5. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 73
Pfizer Inc. (NYSE:PFE) is one of the top stocks that Redditors believe can rebound. Pfizer Inc. (NYSE:PFE) is one of the biggest healthcare companies in the world with major growth catalysts for the long term. But Pfizer Inc. (NYSE:PFE) has lost about 33% in value year to date through September 13.
Recently, the FDA approved the updated COVID-19 vaccines by Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE)/BioNTech (NASDAQ:BNTX) for people aged six months or older for the fall vaccination season.
Diamond Hill Large Cap Strategy made the following comment about Pfizer Inc. (NYSE:PFE) in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, biopharmaceutical company Pfizer Inc. (NYSE:PFE) and global entertainment company Disney. Pharmaceutical giant Pfizer has been dealing with a decline in sales due to lower COVID vaccination levels. Additionally, in 2023, management is increasing spend as the company invests in new product launches. That said, we remain positive about the long-term company fundamentals.”
4. Oracle Corporation (NASDAQ:ORCL)
Number of Hedge Fund Holders: 84
Oracle Corporation (NASDAQ:ORCL) shares recently saw record lows after the company posted fiscal Q1’2024 results. Revenue and guidance were weak, pointing to a slowdown in Cloud growth. Analysts also believe investors had high expectations regarding Oracle Corporation (NASDAQ:ORCL)’s AI offerings. However, Redditors believe the sell-off is overdone and the reason why the stock fell was mostly because Oracle Corporation (NASDAQ:ORCL)’s management did not use the buzzword “AI” enough during its quarterly results presentation and call.
Reddit believes Oracle Corporation (NASDAQ:ORCL) will bounce back. Here is an interesting comment from a Redditor on Oracle selloff:
“People didn’t like the revenue guidance even though it was due to shifting their Cerner customers from licenses (booked up front) to subscriptions (booked over the life of deal). The stock will be fine long term. ORCL is a very unique set of assets (Cerner, cloud, modern AI infrastructure) and while the stock may not rebound immediately the company is in better shape than their former days of relying on ‘on prem database applications’.”
ClearBridge Large Cap Value Strategy made the following comment about Oracle Corporation (NYSE:ORCL) in its Q2 2023 investor letter:
“The Strategy outperformed in the quarter, benefiting from recent opportunistic additions such as Meta Platforms as well as medium and long-term holdings such as Vertiv, Oracle Corporation (NYSE:ORCL) and Martin Marietta Materials.
Expectations that rapidly developing generative AI technology will drive another wave of cloud adoption were also a boon for Oracle, the dominant provider of on-premise database software for large enterprises globally, with growing cloud and SaaS businesses. Oracle noted that generative AI cloud customers have already signed contracts to purchase more than $2 billion of cloud capacity, reflecting the strengths of its technology as well as its aggressive go-to-market strategy.”
3. Paypal Holdings Inc. (NASDAQ:PYPL)
Number of Hedge Fund Holders: 86
Paypal Holdings Inc. (NASDAQ:PYPL) ranks 3rd in our list of the stocks Redditors believe have the potential to rebound. Paypal Holdings Inc. (NASDAQ:PYPL) stock is down about 15% year to date. Paypal Holdings Inc. (NASDAQ:PYPL) was crushed after it was revealed that Elliott Investment Management exited the company in the second quarter. But Paypal Holdings Inc. (NASDAQ:PYPL) is cutting its costs significantly and buying back its shares. Paypal Holdings Inc. (NASDAQ:PYPL) recently announced a bold move by launching a stablecoin.
As of the end of the second quarter of 2023, John Overdeck and David Siegel’s Two Sigma Advisors own a $381 million stake in Paypal Holdings Inc. (NASDAQ:PYPL).
RiverPark Large Growth Fund made the following comment about PayPal Holdings, Inc. (NASDAQ:PYPL) in its Q2 2023 investor letter:
“PayPal Holdings, Inc. (NASDAQ:PYPL): PayPal shares were a top detractor in the quarter despite reporting better than anticipated 1Q earnings and raising guidance for the remainder of 2023. Revenue of $7 billion grew 9% year over year, an acceleration from the prior year and quarter. EPS of 1.17 grew 33% year over year on better cost discipline leading to better operating margins. The disappointment was centered around weaker gross margins, as unbranded checkout, which has lower gross margins, accelerated faster than branded checkout. Management anticipates this trend to continue and therefore guided to lower gross margins for the remainder of the year. Despite the gross margin headwind, operating margins continue to expand due to expense discipline.
PayPal is the most accepted digital wallet – with almost triple the acceptance of Apple Pay, the number two digital wallet – providing the purest exposure to the secular growth in ecommerce-driven digital payments. PayPal is also a key beneficiary of consumer-to-consumer payment trends through its Venmo peer-to-peer (P2P) payment service. With a 1Q non-GAAP operating margin of 23%, PYPL also has significant margin expansion potential given that competitors Adyen, Visa and Mastercard have 50%-65% operating margins. We believe the combination of the secular growth of eCommerce and P2P payments, along with expanding operating leverage and the strategic use of the company’s significant and growing cash balance should fuel at least a high teens earnings growth rate over the next five years. This, to us, presents an excellent risk/reward given that PYPL trades at a below market multiple.”
2. The Charles Schwab Corporation (NYSE:SCHW)
Number of Hedge Fund Holders: 88
The Charles Schwab Corporation (NYSE:SCHW) ranks 2nd in our list of the stocks that will bounce back according to Reddit. The Charles Schwab Corporation (NYSE:SCHW) has lost about 26% year to date through September 13. The Charles Schwab Corporation (NYSE:SCHW) suffered massively after a major banking crisis jolted the industry. But analysts believe Charles Schwab Corporation (NYSE:SCHW) is out of the woods and many also praised the company for handling the crisis well. Redditors also believe SCHW is providing an attractive entry point.
As of the end of the second quarter of 2023, 88 hedge funds out of the 910 funds tracked by Insider Monkey were long The Charles Schwab Corporation (NYSE:SCHW). The biggest stakeholder of The Charles Schwab Corporation (NYSE:SCHW) was Natixis Global Asset Management’s Harris Associates which owns a $1.1 billion stake in the company.
ClearBridge Large Cap Value Strategy made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its Q2 2023 investor letter:
“We have done so recently with The Charles Schwab Corporation (NYSE:SCHW), which got caught up in investor concerns over regional banks, due to the perception of an asset/liability mismatch on Schwab’s balance sheet. While there are similarities with regional banks, Schwab has minimal credit risk and far higher organic growth than traditional banks. In addition, Schwab’s mostly retail customers are not pulling money out of its ecosystem. On the contrary, the company continues to grow client assets at a mid-single-digit percentage rate despite the banking selloff. Concerned over interest rate risk, we trimmed our position last year and earlier this year. As the stock pulled back this spring, we added back aggressively. It remains an exceptionally strong franchise in terms of asset gathering and customer loyalty and runs a unique business model that continues to attract client assets; we are pleased to have the opportunity to express our differentiated view.”
1. The Walt Disney Company (NYSE:DIS)
Number of Hedge Fund Holders: 92
The Walt Disney Company (NYSE:DIS) is having a difficult time amid huge competition from other streaming services and lack of growth. The Walt Disney Company (NYSE:DIS) was recently able to resolve its dispute with Charter Communications that had caused a blackout of Disney’s channels. Analysts believe The Walt Disney Company (NYSE:DIS) will continue to face challenges in the near term. For example, UBS Group AG (NYSE:UBS) recently said that The Walt Disney Company (NYSE:DIS) is having trouble maintaining its subscriber count amid competition and industry issues.
“Subscriber growth in the U.S. has effectively ground to a halt and international markets are not proving to be the fertile hunting grounds the media companies envisioned when launching their DTC services. We estimate the U.S. added <2M subscribers in 2Q, the lowest tally since we began tracking the metric in 2017,” UBS’ John Hodulik said in a note.
But Redditors believe the selloff around The Walt Disney Company (NYSE:DIS) is a good buying opportunity as the company could resolve its issues in the long term.
Diamond Hill Large Cap Strategy made the following comment about The Walt Disney Company (NYSE:DIS) in its Q2 2023 investor letter:
“Our bottom contributors in Q2 included health insurance company Humana, biopharmaceutical company Pfizer and global entertainment company The Walt Disney Company (NYSE:DIS). Disney’s Bob Iger returned to the CEO’s seat in November 2022, replacing Bob Chapek, who left following a turbulent tenure. As a result of disappointing quarterly results and incremental commentary suggesting a more inline strategy with other media, the market has become less confident that Iger will achieve a turnaround by the end of his 1.5- year contract. We continue to believe Disney has a unique collection of assets and owns some of the best content among all media companies. Their ability to monetize this content across many platforms — studio, theme park, toys, streaming — is incredibly valuable; thus we remain investors.”
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