Reddit’s 5 Meme Stocks Ranked From Best to Worst According to Hedge Funds

In this article, we discuss Reddit’s 5 meme stocks ranked from best to worst according to hedge funds. If you want to see more stocks in this selection, check out Reddit’s 10 Meme Stocks Ranked From Best to Worst According to Hedge Funds. 

5. Nokia Oyj (NYSE:NOK)

Number of Hedge Fund Holders: 17

Nokia Oyj (NYSE:NOK) is a Finnish multinational provider of mobile, fixed, and cloud network solutions worldwide. The company operates through four segments – Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies. It is one of the top Reddit meme stocks to watch. On January 30, Nokia Oyj (NYSE:NOK) reported a Q4 non-GAAP EPS of Є0.16 and a revenue of Є7.45 billion, outperforming Wall Street estimates by Є0.03 and Є350 million, respectively. 

On February 14, Credit Suisse analyst Adithya Metuku maintained an Outperform rating on Nokia Oyj (NYSE:NOK) but lowered the firm’s price target on the shares to EUR 5.61 from EUR 6.05. 

According to Insider Monkey’s fourth quarter database, Nokia Oyj (NYSE:NOK) was part of 17 hedge fund portfolios, compared to 24 in the prior quarter. LMR Partners is the largest stakeholder of the company, with 10.3 million shares worth $47.8 million. 

4. Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Number of Hedge Fund Holders: 15

Bed Bath & Beyond Inc. (NASDAQ:BBBY) is a New Jersey-based company that operates a chain of retail stores, selling domestic merchandise including bed linens, bath items, kitchen textiles, and home furnishings. Bed Bath & Beyond Inc. (NASDAQ:BBBY) is one of the most popular Reddit meme stocks. 

On March 8, Bed Bath & Beyond Inc. (NASDAQ:BBBY) exercised preferred stock warrants that were issued in its previously announced equity offering, resulting in approximately $135 million in gross proceeds. The company has now received a total of $360 million through March 7, 2023. The proceeds from the exercise of warrants will be used to repay outstanding revolving loans, which will create additional liquidity opportunities to support the company’s business operating activities.

Wedbush analyst Seth Basham increased the firm’s price target on Bed Bath & Beyond Inc. (NASDAQ:BBBY) to $0.25 from $0, while maintaining an Underperform rating on the shares on February 8. According to the analyst, Bed Bath & Beyond Inc. (NASDAQ:BBBY) has managed to secure financing for up to $1.125 billion in additional capital, reducing the near-term risk of bankruptcy and giving the company more time to carry out its efforts to turn things around. However, this financing comes at a significant cost to existing shareholders, who could face over 80% dilution from convertible preferred shares and warrants if they are fully executed. As Wedbush sees a low likelihood of the company achieving its 2023 turnaround plan, the firm assigned little-to-no value to the company’s equity on a probability-weighted basis.

According to Insider Monkey’s Q4 data, 15 hedge funds were long Bed Bath & Beyond Inc. (NASDAQ:BBBY), compared to 12 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a significant position holder in the company, with 1.2 million shares worth $3 million. 

Miller Value Partners made the following comment about Bed Bath & Beyond Inc. (NASDAQ:BBBY) in its Q3 2022 investor letter:

“Bed Bath & Beyond Inc. (NASDAQ:BBBY) saw significant volatility during the quarter as the share price increased from less than $5/share to more than $20/share at one point. Bed Bath’s management has had ongoing challenges with their turnaround plan. With the company balance sheet significantly weakening over the past two quarters and reports of vendor relationships becoming strained, we see significantly less margin of safety. We decided to take advantage of the price strength during the quarter and exited our position at a profit.”

3. BlackBerry Limited (NYSE:BB)

Number of Hedge Fund Holders: 15

BlackBerry Limited (NYSE:BB) was incorporated in 1984 and is headquartered in Waterloo, Canada. The company specializes in intelligent security software and services for enterprises and governments worldwide. BlackBerry Limited (NYSE:BB) anticipates its Q4 revenue to be around $151 million, which is lower than the market consensus of $166.4 million. Additionally, the company expects its full-year revenue to be approximately $656 million, which is also below the Street estimates of $679.28 million.

On March 8, RBC Capital lowered the firm’s price target on BlackBerry Limited (NYSE:BB) to C$4.50 from C$5.50 and kept a Sector Perform rating on the shares.

According to Insider Monkey’s fourth quarter database, 15 hedge funds were bullish on BlackBerry Limited (NYSE:BB), compared to 16 funds in the prior quarter. Fairfax Financial Holdings is a prominent stakeholder of the company, with 46.7 million shares worth $151.85 million. 

2. GameStop Corp. (NYSE:GME)

Number of Hedge Fund Holders: 14

GameStop Corp. (NYSE:GME) is perhaps the most popular Reddit meme stock. It is a Texas-based specialty retailer that sells games and entertainment products through its e-commerce channels and stores in the United States, Canada, Australia, and Europe. On December 8, Wedbush analyst Michael Pachter lowered the firm’s price target on GameStop Corp. (NYSE:GME) to $5.30 from $6 and kept an Underperform rating on the shares, following the company’s failure to meet revenue and EPS expectations. The analyst claimed that GameStop Corp. (NYSE:GME)’s efforts to revive its business have not yielded positive results so far, as evidenced by the announcement of staff cuts later this year. Pachter noted that GameStop Corp. (NYSE:GME) is facing several short-term challenges, including poor NFT marketplace results, a decline in the overall NFT industry, hardware limitations, and cash burn. In the long run, GameStop Corp. (NYSE:GME) may also face liquidity problems and competition from a trend towards digital downloads throughout the industry, the analyst wrote in a research note. 

According to Insider Monkey’s fourth quarter database, 14 hedge funds were bullish on GameStop Corp. (NYSE:GME), compared to 13 funds in the last quarter. Mason Capital Management is a prominent stakeholder of the company, with 518,445 shares worth $21.3 million. 

Here is what Bireme Capital specifically said about GameStop Corp. (NYSE:GME) in its Q2 2022 investor letter:

“Amazingly, GameStop Corp. (NYSE:GME) is one of our only short positions to not fall in 2022. The stock trades at an $11.5b market cap, exceeding its pre-pandemic peak by billions of dollars. This is despite the fact that revenue is down 30% from the peak, gross margins are down 1500 bps, and the company has generated a negative free cash outflow of $700m in the last four quarters (we had to double check that number because it is so high).

Wall Street has consistently revised downward their estimates of Gamestop’s profitability, making its stock price stability in 2022 even more perplexing. Analysts currently estimate an EBITDA loss of around $400m, markedly worse than their estimates as of 2/3/22 of a loss of $60m. Their recently launched NFT marketplace will do nothing to fix their core business and comes about a year too late to be relevant in the NFT space. Instead, we see this as another example of a meme stock company hoping it can ape its way into a new business model, utilizing the popularity of the stock to drive new lines of business. We are not optimistic, and think the $11.5b market cap drastically overestimates the capability of Gamestop to pivot into something more profitable. We find it unlikely that Gamestop books a GAAP profit ever again.”

1. Canoo Inc. (NASDAQ:GOEV)

Number of Hedge Fund Holders: 13

Canoo Inc. (NASDAQ:GOEV) is a California-based mobility technology company that designs, engineers, and manufactures electric vehicles for commercial and consumer markets in the United States. On February 6, Canoo Inc. (NASDAQ:GOEV)’s stock plummeted by over 20% in the pre-market trading session after the company declared that it would be releasing 50 million common shares along with warrants to purchase up to 50 million shares at a combined price of $1.05 per share. The company expects to generate approximately $52.5 million in total from the sale. The warrants have a validity of five years and can be exercised six months following the issuance date, with an exercise price of $1.30 per share. It is one of the most popular Reddit meme stocks to monitor. 

On November 10, R.F. Lafferty analyst Jaime Perez lowered the firm’s price target on Canoo Inc. (NASDAQ:GOEV) to $6 from $15 and reiterated a Buy rating on the shares. The reason for the lowered target is Perez’s forecast for 2023 sales of $385 million, as opposed to the previous prediction of $605 million. The analyst attributed this reduction to a slow increase in production during the latter half of the year, while the company completes tooling and equipment for its new manufacturing plant in Oklahoma City. 

According to Insider Monkey’s fourth quarter database, 13 hedge funds were long Canoo Inc. (NASDAQ:GOEV), compared to 12 funds in the prior quarter. Steve Cohen’s Point72 Asset Management is a prominent stakeholder of the company, with 1.5 million shares worth $1.90 million. 

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