We recently published a list of 10 Stocks That Will Go to the Moon According to Reddit. In this article, we are going to take a look at where DTE Energy Company (NYSE:DTE) stands against the other stocks.
FINRA Investor Education Foundation and CFA Institute (2023) revealed that ~37% of Gen-Z investors in the US and ~38% in the UK come to social media influencers regarding investment decisions. Therefore, it is important to explore the role finfluencers (influencers sharing financial advice on social media) play in providing investment information and how Gen-Z investors engage with finfluencers. Young investors are considering memes and viral videos as the primary source of investment advice.
Social Media and Investments: Do They Complement Each Other?
Experts believe that retail or non-professional investors are now becoming dependent on digital channels, like social media platforms such as TikTok, when it comes to investing.
FINRA revealed that ~60% of US investors under age 35 believe that social media can be used as a source of investment information. This compares to ~57% who use finance professionals. This increase is probably because digital channels are becoming easily accessible, with ~60% of the global population utilizing social media (as per DataReportal).
Quick-scroll websites are now considered the go-to spot for investment ideas and inspiration. This is because of their bite-sized format and easy access. Ofcom, which tracks news consumption in the UK – revealed that TikTok’s reach for news went up from ~1% in 2020 to ~7% in 2022. This was mainly seen in younger folks aged between 16 – 24 years. Pew Research mentioned that, in the US, this increased from ~3% in 2020 to ~10% in 2022.
Financial advice content, which is shared on social media, has been contributing to the growth of the “creator economy,” which is pegged at ~$127 billion globally (as per Coherent Market Insights). This is expected to reach US$528.39 billion by 2030, with growth stemming from higher demand for user-generated content and increased monetization opportunities. Financial institutions and investment advisory companies are now focusing on creating pathways from social media to their product and services to exploit strong market opportunities. Therefore, most retail investors continue to make investing decisions under social media’s influence.
Retail Traders Making a Significant Portion in The US Stock Options
JPMorgan Chase & Co. highlighted that non-professional investors are now making a bigger part of the US options market as they continue to pour money mainly into short-term bets and technology stocks. The bank highlighted that retail traders accounted for ~18.3% of the total options activity in June. Social media and online investing communities have influenced retail investors to the extent that these investors don’t shy away from making investments in the downturn.
In late July and early August 2024, when there was a sharp decline in popular technology shares, retail investors turned out to be net buyers.
Vanda Research mentioned that individual investors, who were caught up in the market downturn, continued to be net buyers of shares of leading technology and AI-related companies. Just to balance out the risks, retail investors directed significant buying to an ETF tracking 20-Y Treasury bonds. Wall Street experts and enthusiasts believe that this confidence comes from the online investing communities and social media platforms, where there were discussions about going long on leading technology shares as they were trading at “decent levels.”
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An aerial view of a power plant surrounded by majestic rolling hills.
DTE Energy Company (NYSE:DTE)
Number of hedge fund holders: 25
DTE Energy Company (NYSE:DTE), a diversified energy company, is engaged in developing and managing energy-related businesses and services nationwide. The Company generates, purchases, transmits, distributes, and sells electric energy.
DTE Energy Company (NYSE:DTE)’s long-term growth prospects stem from its extensive and well-established utility infrastructure. Its regulated utilities, DTE Electric and DTE Gas, continue to address a substantial customer base in Michigan, which includes economically significant regions of southeastern Michigan and Detroit.
DTE Energy Company (NYSE:DTE)’s strategic investments in renewable energy, like wind and solar, and the company’s plans to retire coal-fired power plants by 2032 should help it achieve growth over the next 10 years. Also, these goals align with the increased demand for environmentally responsible energy solutions. This should enhance the DTE Energy Company (NYSE:DTE)’s brand reputation. The company will be able to capitalize on the promising market for clean energy and related government incentives. Collectively, these drivers should lead to long-term growth and profitability.
DTE Energy Company (NYSE:DTE) has an opportunity to expand its renewable energy portfolio. Given the fact that the state of Michigan requires a 100% clean energy portfolio by the year 2040, the company appears to be well-placed to exploit existing investments in renewables and capitalize on this regulatory tailwind. It invested more than ~$2 billion in 1H 2024, on pace for a full-year investment of over $4 billion. The focus is on making electric and natural gas infrastructure more resilient.
Therefore, its strong financial health and constructive regulatory environment should support the company in generating healthy and stable cash flows.
Wells Fargo & Company upped their price objective on shares of DTE Energy Company (NYSE:DTE) from $125.00 to $133.00, giving it an “Overweight” rating on 26th July.
Overall DTE ranks 7th on our list of stocks that will go to the moon. While we acknowledge the potential of DTE as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than DTE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’
Disclosure: None. This article is originally published at Insider Monkey.
