In this article, we discuss AMTD Digital and 9 other stocks Redditors are buying in August. If you want to see more stocks that Redditors are buying this month, click AMTD Digital and 4 Other Stocks Redditors are Buying in August.
A meme stock typically gets popular among retail investors through social media. A little-known Chinese financial services company, AMTD Digital Inc. (NYSE:HKD), seems to be the latest fixation of retail investors on Reddit’s WallStreetBets, a community where traders discuss their stock portfolios, and post their wins and losses.
The Rise of AMTD Digital
AMTD Digital Inc. (NYSE:HKD) stock has shot up exponentially since its July 15 IPO, trading at about $1679 per share on August 3, up dramatically from the IPO price of $7.80. AMTD Digital Inc. (NYSE:HKD), a relatively unknown firm that made $25 million in revenue last year, has a banging valuation that exceeded $300 billion in the last few days, and stands at $148 billion as of August 5, all because of the obsessive inflow of retail investors in such a short time since the initial public offering.
The current investing frenzy is similar to the 2021 mania around GameStop Corp. (NYSE:GME) and AMC Entertainment Holdings, Inc. (NYSE:AMC), which were meme stocks that ballooned upon massive inflows from retail investors on Reddit’s WallStreetBets. According to a Bloomberg report dated August 3, AMTD Digital Inc. (NYSE:HKD) was the fifth-largest listed financial company in the world according to market capitalization, in league with Berkshire Hathaway Inc. (NYSE:BRK-A), JPMorgan Chase & Co. (NYSE:JPM), Bank of America Corporation (NYSE:BAC), and Industrial & Commercial Bank of China Ltd.
Thomas Nip, a research analyst at Valuable Capital Ltd. in Hong Kong, said that “the stock is highly overvalued”, and a few big shareholders will easily amp up the price. Similarly, Oktay Kavrak, director at Leverage Shares, observed that AMTD Digital Inc. (NYSE:HKD) will likely nosedive and retail investors should cash out their profits before the valuation comes down to real levels. However, Redditors remain adamant on their path to buy AMTD Digital Inc. (NYSE:HKD), as well as memes stocks like GameStop Corp. (NYSE:GME) and Revlon, Inc. (NYSE:REV) in August.
Photo by AlphaTradeZone
Our Methodology
We explored the latest threads in the subreddit r/wallstreetbets for this analysis, selecting the 10 most popular stocks that Redditors are buying in August. We have ranked the list according to the hedge fund sentiment around the holdings as of Q1 2022, which was gauged from Insider Monkey’s database of 900+ elite hedge funds.
10. Workhorse Group Inc. (NASDAQ:WKHS)
Number of Hedge Fund Holders: 11
Lately, Redditors are actively trading Workhorse Group Inc. (NASDAQ:WKHS). Workhorse Group Inc. (NASDAQ:WKHS) is an Ohio-based manufacturer of commercial electric vehicles, Horsefly delivery drones, and telematics software systems. The United States Parcel Service said on July 20 that it plans to purchase more than 34,500 commercial off-the-shelf delivery vehicles over the next two years, which is a positive catalyst for Workhorse Group (NASDAQ:WKHS). The stock climbed about 8% on this announcement.
On May 16, DA Davidson analyst Michael Shlisky reiterated a Neutral rating on Workhorse Group (NASDAQ:WKHS) and lowered the price target on the shares to $3 from $5. The company seems to be on-track with its plan to turn things around and even disclosed the purchase orders for the W750, though Workhorse Group (NASDAQ:WKHS) is already on its way to producing more vehicles than ever in the second half of 2022 alone, which might prove to be a challenge, the analyst told investors in a research note. He added that Workhorse Group (NASDAQ:WKHS) also has possible revenue upside compared to his model from its Aviation division.
Among the hedge funds tracked by Insider Monkey, 11 funds were bullish on Workhorse Group (NASDAQ:WKHS) at the end of Q1 2022, with collective stakes worth $21.85 million, up from 9 funds the prior quarter worth $8.2 million. D E Shaw is the biggest stakeholder of the company, with 1.85 million shares worth $9.3 million.
Like AMTD Digital Inc. (NYSE:HKD), GameStop Corp. (NYSE:GME), and Revlon, Inc. (NYSE:REV), Redditors are backing Workhorse Group (NASDAQ:WKHS) in August.
9. MicroStrategy Incorporated (NASDAQ:MSTR)
Number of Hedge Fund Holders: 14
MicroStrategy Incorporated (NASDAQ:MSTR) is a Virginia-based company that specializes in business intelligence, mobile software, and cloud services. Redditors are flocking to MicroStrategy Incorporated (NASDAQ:MSTR), which is a meme stock that has gained about 65% in the last month as of August 4. On August 3, the stock jumped 12.7% as Bitcoin climbed 2.3% to $23,510, since the company holds about 130,000 Bitcoin on its balance sheet.
On August 3, Canaccord analyst Joseph Vafi reiterated a Buy recommendation on MicroStrategy Incorporated (NASDAQ:MSTR) but lowered the firm’s price target on the stock to $372 from $453. The analyst said the core value driver for the company remains its Bitcoin holdings, which rose again this quarter. Given his view that BTC will gain over time, he cannot help but be bullish on the stock.
According to Insider Monkey’s data, 14 hedge funds were long MicroStrategy Incorporated (NASDAQ:MSTR) at the end of Q1 2022, with combined stakes exceeding $85 million, compared to 16 funds in the earlier quarter holding stakes in the company worth $62.3 million. Jim Simons’ Renaissance Technologies held a notable position in MicroStrategy Incorporated (NASDAQ:MSTR), comprising 86,300 shares valued at about $42 million.
Here is what Alger Mid Cap Focus Fund has to say about MicroStrategy Incorporated (NASDAQ:MSTR) in their Q1 2021 investor letter:
“MicroStrategy Incorporated was among the top contributors to performance. MicroStrategy is a global leader in enterprise analytics software and services. MicroStrategy’s core software platform provides customers with visualization and reporting capabilities, mobility features and custom applications to help with complex business questions. Today, MicroStrategy has over 4,000 customers worldwide. In August 2020, MicroStrategy decided to make bitcoin its preferred reserve currency. To date, MicroStrategy has purchased over 90,000 bitcoins at an aggregate purchase price of $2.17 bi11 ion and an average price of over $23,985 per bitcoin. Going forward, MicroStrategy plans to use excess cash generated by its core business to purchase additional bitcoin.
Shares of MicroStrategy outperformed in the first quarter due to the appreciation of the company’s bitcoin asset, as the price of bitcoin relative to the U.S. dollar rose materially in the quarter. This bitcoin appreciation was driven by concerns about U.S. dollar inflation as well as other public companies deciding to acquire bitcoin to diversify reserve assets. MicroStrategy is establishing itself as a thought leader in the bitcoin space, and the company hosted an event at its February user conference to help other organizations understand the benefits of bitcoin as a reserve asset. MicroStrategy’s core software business is also benefiting from its status as a leader in the bitcoin space, with the increased public attention aiding MicroStrategy’s recruitment and marketing efforts as the software business continues to transition to a cloud-based subscription model.”
8. Lucid Group, Inc. (NASDAQ:LCID)
Number of Hedge Fund Holders: 16
Lucid Group, Inc. (NASDAQ:LCID) generated major buzz on the back of its merger with a SPAC in the beginning of 2021. The stock is gaining popularity among Redditors lately. Lucid Group, Inc. (NASDAQ:LCID) operates as an electric vehicle manufacturer and it is headquartered in Newark, California. The company reported a revenue of $97 million in Q2 and deliveries of 679 vehicles. Additionally, Lucid Group, Inc. (NASDAQ:LCID) announced solid demand for Lucid Air, with reservations of over 37,000 units. These reservations represent potential sales of about $3.5 billion. However, the company slashed its 2022 production outlook to 6,000-7,000 vehicles, compared to the earlier production guidance of 12,000-14,000 units.
On May 9, Citi analyst Itay Michaeli reaffirmed a Buy rating on Lucid Group, Inc. (NASDAQ:LCID) but lowered the firm’s price target on the stock to $36 from $45. There were no big surprises in Lucid Group, Inc. (NASDAQ:LCID)’s Q1 results and the company posted a “fairly encouraging update,” the analyst told investors in a research note.
According to Insider Monkey’s data, 16 hedge funds were long Lucid Group, Inc. (NASDAQ:LCID) at the conclusion of Q1 2022, with combined stakes worth $159 million, up from 14 funds in the previous quarter, holding stakes in the company valued at $149 million.
7. AMC Entertainment Holdings, Inc. (NYSE:AMC)
Number of Hedge Fund Holders: 16
AMC Entertainment Holdings, Inc. (NYSE:AMC) is one of the most popular meme stocks of 2021, and Redditors are once again pouring into the company. There was a lot of buzz in the Reddit community about Cliff Asness’ short position on AMC Entertainment Holdings, Inc. (NYSE:AMC) and the hedge fund manager’s ‘arrogant’ comments about retail investors, and many Redditors want to prove him wrong. AMC Entertainment Holdings, Inc. (NYSE:AMC) owns and operates theaters in the United States and Europe.
In Q2 2022, AMC Entertainment Holdings, Inc. (NYSE:AMC) posted a loss per share of $0.20, ahead of consensus estimates by $0.03. Revenue over the period climbed 162.3% year over year to $1.16 billion but missed Wall Street forecasts by $20 million. The attendance in AMC Entertainment Holdings, Inc. (NYSE:AMC)’s theaters during Q2 was 59,129 versus 39,075 in the last quarter.
Citi analyst Jason Bazinet on July 7 lowered the price target on AMC Entertainment Holdings, Inc. (NYSE:AMC) to $5 from $6 and reiterated a Sell rating on the shares, citing recession fears that are hammering most advertising and entertainment stocks. Recession risks are “usually most acute for firms with high ad exposure and lower levels of contractual revenue,” contended the analyst.
Among the hedge funds tracked by Insider Monkey, D E Shaw held the leading stake in the company, consisting of 11.60 million shares worth $286 million. Overall, 16 hedge funds were long AMC Entertainment Holdings, Inc. (NYSE:AMC) at the end of March 2022, with combined stakes worth $407.4 million, compared to 17 funds a quarter ago worth $328 million.
Here is what Bronte Capital Amalthea Fund has to say about AMC Entertainment Holdings, Inc. (NYSE:AMC) in its Q1 2022 investor letter:
“We are short, in small quantities, almost all the meme stocks. The aggregate “meme stock” position is a few percent, though no individual position is large. We will not name any of these positions other than AMC and Gamestop, the two most iconic meme stocks and the objects of the largest short squeezes in February 2020. Note the positions are small, but they are indicative of what is going on. AMC is an over-levered chain of movie theaters in America with (broadly speaking) slightly less attendance every year. Both these companies raised enough money that bankruptcy is not an immediately likely outcome. (Both would have gone bankrupt except for the willingness of largely retail investors to provide them with much more cash.) Both have bad financial results.”
6. Canoo Inc. (NASDAQ:GOEV)
Number of Hedge Fund Holders: 19
Canoo Inc. (NASDAQ:GOEV) is an American manufacturer of electrified delivery vehicles, lifestyle vehicles, multi-purpose vehicles, and pickups. In late 2021, Canoo Inc. (NASDAQ:GOEV) was one of the most discussed EV growth stocks on Reddit after it became public via a SPAC merger. Lately, Redditors have been pouring into Canoo Inc. (NASDAQ:GOEV) once again. The company announced on July 14 that it has won a contract with the U.S. Army to supply an electric vehicle for analysis and demonstration of its adaptive capacity in operational and special case environments. Similarly, Canoo Inc. (NASDAQ:GOEV) recently delivered its multi-purpose platform to NASA for transportation vehicles to drop astronauts to the Artemis launch site for space missions.
On July 14, R.F. Lafferty analyst Jaime Perez maintained a Buy rating on Canoo Inc. (NASDAQ:GOEV) and lowered the price target on the shares to $17 from $20. The company reported an EV fleet purchase agreement with Walmart Inc. (NYSE:WMT) for 10,000 vehicles and this contract was valued at approximately $300 million, the analyst told investors. The slashed price target factors in the higher share count, and the analyst also reduced Canoo Inc. (NASDAQ:GOEV)’s 2023 revenue estimate to $700 million to account for the low end of management’s guidance of 14,000-16,000 deliveries for 2023.
Among the hedge funds tracked by Insider Monkey, 19 funds reported owning stakes worth $9.8 million in Canoo Inc. (NASDAQ:GOEV) at the end of the first quarter of 2022, up from 18 funds in the earlier quarter, holding stakes in the company amounting to $29 million.
In addition to AMTD Digital Inc. (NYSE:HKD), GameStop Corp. (NYSE:GME), and Revlon, Inc. (NYSE:REV), Canoo Inc. (NASDAQ:GOEV) is one of the stocks on the radar of Reddit’s WallStreetBets community.
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Disclosure: None. AMTD Digital and 9 Other Stocks Redditors are Buying in August is originally published on Insider Monkey.
