In this article, we discuss the 5 stocks Reddit’s WallStreetBets is buying for post-earnings gains. If you want to read our detailed analysis of these stocks, go directly to Reddit’s WallStreetBets is Buying these 10 Stocks for Post-Earnings Gains.
5. Roku, Inc. (NASDAQ: ROKU)
Number of Hedge Fund Holders: 63
Expected Earnings Date: August 4 (After Market Close)
Roku, Inc. (NASDAQ: ROKU) is placed fifth on our list of 10 stocks Reddit’s WallStreetBets is buying for post-earnings gains. The firm is based in California and operates a TV streaming platform. The firm is expected to release earnings results for the second quarter after the close of market on August 4. The stock has been trending on social media platforms recently and jumped more than 12% in a single day of trading on July 23 amid solid options and bullish options activity. The firm has a market cap of more than $56 billion.
On July 7, investment advisory Morgan Stanley kept an Underweight rating on Roku, Inc. (NASDAQ: ROKU) stock but raised the price target to $325 from $300, noting that the US ad market was the strongest it had been in decades and Roku would benefit from it.
At the end of the first quarter of 2021, 63 hedge funds in the database of Insider Monkey held stakes worth $3.7 billion in Roku, Inc. (NASDAQ: ROKU), up from 60 in the preceding quarter worth $3.2 billion.
In its Q4 2020 investor letter, RGA Investment Advisors, an asset management firm, highlighted a few stocks and Roku, Inc. (NASDAQ: ROKU) was one of them. Here is what the fund said:
“For two years running, Roku has now been either the largest or second largest driver of performance in portfolios. When we purchased Roku, obviously we never expected such a phenomenal outcome, so quickly—these things can only be chalked up to luck. However, we do think luck is the residue of design and Roku had all the hallmarks ex ante as the kind of position that could do something wildly spectacular. One of the first signs in seeing Roku’s potential was the sharp contrast between our modeled expectations for the top line of the business and where the consensus expectations were. This was the Shopify setup all over again. By this time, we had added an additional tool to our analytical framework, and this helped further enforce our conviction that not only was it we who were right about where things should go, but also that the very existence of this gap could be a potent source of fuel behind the stock as the world came around to our expectation. Specifically, we had become increasingly comfortable building lifetime value analyses of companies, and notably, when we bought Roku, we were quite confident that with only modest annual increases in average revenue per user (ARPU), and a 5-year average customer lifespan, we were buying the company for its existing customer base and nothing more. In other words, the growth at Roku was entirely free at the prevailing prices we bought into.”
4. Zillow Group, Inc. (NASDAQ: Z)
Number of Hedge Fund Holders: 82
Expected Earnings Date: August 5 (After Market Close)
Zillow Group, Inc. (NASDAQ: Z) is ranked fourth on our list of 10 stocks Reddit’s WallStreetBets is buying for post-earnings gains. The company operates an online platform related to real estate and is based in Washington. It is expected to post earnings results for the second quarter after the close of market on August 5. The stock is one of the most popular ones on Reddit forums these days, with chatter on the WallStreetBets platform in particular earning the firm a mention in the Bank of America hot Reddit list last month.
On July 21, investment advisory Berenberg initiated coverage of Zillow Group, Inc. (NASDAQ: Z) stock with a Buy rating and a price target of $156, underlining that the online market for real estate firms was growing and the fundamentals of the industry remained strong.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm SRS Investment Management is a leading shareholder in Zillow Group, Inc. (NASDAQ: Z) with 7.3 million shares worth more than $946 million.
In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Zillow Group, Inc. (NASDAQ: Z) was one of them. Here is what the fund said:
“Zillow Group, Inc. operates leading U.S. real estate sites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares fell during the quarter in concert with the broader rotation out of technology-based stocks despite the company’s continued inflection in mortgages revenue, strong profitability in its core business, and a positive real estate outlook as Zillow builds out its iBuying ecosystem. In our view, Zillow is a leader in the large online real estate advertising market with substantial upside from mortgages and Offers, and we remain investors.”
3. General Motors Company (NYSE: GM)
Number of Hedge Fund Holders: 86
Expected Earnings Date: August 4 (Before Market Open)
General Motors Company (NYSE: GM) is a Michigan-based company that makes and sells cars. It is placed third on our list of 10 stocks Reddit’s WallStreetBets is buying for post-earnings gains. The company will release earnings for the second quarter before the opening of the market on August 4. On July 19, the firm announced that it was working on the development of another electric pickup truck in addition to an upcoming release of the electric GMC Hummer.
On July 16, investment advisory Bank of America reiterated a Buy rating on General Motors Company (NYSE: GM) stock and raised the price target to $90 from $80, backing the firm to beat market expectations on earnings in the second quarter.
Out of the hedge funds being tracked by Insider Monkey, Nebraska-based investment firm Berkshire Hathaway is a leading shareholder in General Motors Company (NYSE: GM) with 67 million shares worth more than $3.8 billion.
Junto Investments, in its Q4 2020 investor letter, mentioned General Motors Company (NYSE: GM). Here is what the fund has to say about General Motors Company in its letter:
“General Motors was the biggest gainer. We managed to buy it at a screamingly cheap price in the middle of March. A lot of interesting news has emerged about GM recently, including the new electric product delivery system BrightDrop and GM Cruise’s team-up with Microsoft Azure to commercialize self-driving cars in 2021. GM’s intrinsic value is crystallizing and the company is worth a whole lot more than is still reflected in the market.”
2. ViacomCBS Inc. (NASDAQ: VIAC)
Number of Hedge Fund Holders: 89
Expected Earnings Date: August 5 (Before Market Open)
ViacomCBS Inc. (NASDAQ: VIAC) is a media and entertainment company headquartered in New York. It is ranked second on our list of 10 stocks Reddit’s WallStreetBets is buying for post-earnings gains. The company will post earnings results for the second quarter before the opening of the market on August 5. The firm has a market cap of over $26 billion and posted more than $25 billion in revenue last year. On August 3, it declared a quarterly dividend of $0.24 per share, in line with previous. The forward yield was 2.35%.
On May 20, investment advisory Bank of America upgraded ViacomCBS Inc. (NASDAQ: VIAC) stock to Buy from Underperform and hiked the price target up to $53 from $38, noting media consolidation in the industry as one of the reasons behind the update.
At the end of the first quarter of 2021, 89 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in ViacomCBS Inc. (NASDAQ: VIAC), up from 44 the preceding quarter worth $919 million.
1. Uber Technologies, Inc. (NYSE: UBER)
Number of Hedge Fund Holders: 130
Expected Earnings Date: August 4 (After Market Close)
Uber Technologies, Inc. (NYSE: UBER) is ranked first on our list of 10 stocks Reddit’s WallStreetBets is buying for post-earnings gains. The firm owns a ride-sharing application that does business around the globe. It also has stakes in other tech-related businesses. The firm is expected to unveil earnings for the second quarter after the close of market on August 4. On July 19, the firm announced that it would be expanding a grocery delivery partnership with Albertsons. Uber Eats, which markets the service, is now available in over 400 cities in the US.
On August 2, investment advisory Gordon Haskett initiated coverage of Uber Technologies, Inc. (NYSE: UBER) stock with a Buy rating and a price target of $65. Robert Mollins, an analyst at the firm, issued the ratings update.
Out of the hedge funds being tracked by Insider Monkey, California-based investment firm Altimeter Capital Management is a leading shareholder in the firm with 28 million shares worth more than $1.5 billion.
RiverPark Advisors, LLC, in its Q4 2020 investor letter, mentioned Uber Technologies, Inc. (NYSE: UBER). Here is what the fund has to say in its letter:
“UBER was also a strong contributor, as shares rallied following the approval of California’s Proposition 22 by voters, allowing the company’s California-based drivers to remain independent contractors (rather than become more expensive employees). We believe this news is not just about the 10%-15% of Uber’s revenue tied to California, but the influence this will have on other states reassessing driver pay. UBER also reported strong third quarter results with Delivery Gross Bookings growing 135% year-over-year which nearly fully offset a reduction in Mobility Gross Bookings, which were down 50% year over year. Total Gross Bookings for the quarter were down only 10% year over year as compared with down 35% last quarter.
Despite the COVID disruption, UBER remains the undisputed global leader in ride sharing (44% of the Company’s third quarter revenue), with greater than 50% share in every major region in which it operates. The company is also a leader in food delivery (46% of revenue), where it is number one or two in the more than 25 countries in which it operates. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its more than 100 million users (by comparison, Amazon Prime has 130+ million members) and penetrate new markets of on-demand services, such as grocery delivery, truck brokerage and worker staffing for shift work. At its current $96 billion market capitalization, UBER trades at only 6x next year’s revenue from its two core businesses. Additionally, the company has substantial, seemingly unrecognized, value in its several nascent development businesses and another $12 billion in equity stakes in synergistic businesses around the world.”
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