In this article, we discuss 5 Reddit stocks that are getting crushed in March. If you want to see some more stocks in this selection, click These 10 Reddit Stocks Are Getting Crushed in March.
5. Ally Financial Inc. (NYSE:ALLY)
1-Month Decline in Share Price as of March 29: 10.10%
Number of Hedge Fund Holders: 48
Ally Financial Inc. (NYSE:ALLY) was founded in 1919 and is based in Detroit, Michigan. The company provides digital financial services to customers in the United States and Canada. Ally Financial Inc. (NYSE:ALLY) operates via four business segments – Automotive Finance Operations, Insurance Operations, Mortgage Finance Operations, and Corporate Finance Operations. Over the last month, the stock has dropped by more than 10%.
On March 28, Morgan Stanley analyst Betsy Graseck reduced the price target on Ally Financial Inc. (NYSE:ALLY) to $55 from $73 and reiterated an Overweight rating on the shares. The analyst contended that rampant inflation owing to the war macro backdrop increases credit risk, which could slow growth and possibly lead to recession. These factors led to the downgrade of the financial services sector to In-Line from Attractive.
Among the hedge funds tracked by Insider Monkey, 48 funds were bullish on Ally Financial Inc. (NYSE:ALLY) in Q4 2021, down from 57 funds in the earlier quarter. Harris Associates is the largest shareholder of the company, with roughly 25 million shares worth $1.18 billion.
4. Zoom Video Communications, Inc. (NASDAQ:ZM)
1-Month Decline in Share Price as of March 29: 8.18%
Number of Hedge Fund Holders: 48
Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications platform that enables online video, voice, chat, and content sharing. Although the company reached new highs at the peak of the COVID-19 pandemic, it has been losing value ever since the virus situation has come under relative control. In the last month, the stock declined 8.18% and multiple Redditors posted losses on their bullish Zoom Video Communications, Inc. (NASDAQ:ZM) calls.
On March 15, Wells Fargo analyst Michael Turrin lowered the price target on Zoom Video Communications, Inc. (NASDAQ:ZM) to $105 from $145 on multiple compression in broader software. The analyst maintained an Equal Weight rating on the shares.
According to Insider Monkey’s Q4 data, 48 hedge funds held long positions in Zoom Video Communications, Inc. (NASDAQ:ZM), down from 56 funds in the prior quarter. ARK Investment Management owned the biggest stake in the company, worth $1.2 billion.
Here is what Artisan Partners has to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2021 investor letter:
“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”
3. RH (NYSE:RH)
1-Month Decline in Share Price as of March 29: 4.04%
Number of Hedge Fund Holders: 58
RH (NYSE:RH) is a home furnishings retailer headquartered in Corte Madera, California. The company sells furniture, lighting, textiles, and bathware. The stock has declined 4.04% in the last month.
On March 9, Wells Fargo analyst Zachary Fadem maintained an Overweight rating on RH (NYSE:RH) but lowered the price target to $500 from $750 ahead of Home Furnishings reporting season. The analyst noted that the category slowed through Q4, and the rising inflation and supply chain challenges will likely drive higher levels of sales and margin variability.
According to the fourth quarter database of Insider Monkey, 58 hedge funds placed long bets on RH (NYSE:RH), compared to 57 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company, with 1.8 million shares worth $973.5 million.
Here is what Polen Global SMID Company Growth Fund has to say about RH (NYSE:RH) in its Q4 2021 investor letter:
“Our most significant detractors from performance over the fourth quarter includes RH. Upscale home-furnishings company RH underperformed over the quarter and the year amid rising costs that weighed on expectations and heightened concerns of reduced discretionary spending amid the ongoing pandemic. We expect the company to grow revenues as it rolls out additional galleries across the globe and thoughtfully expands into adjacencies like guest homes and design services. Along with steady margin growth through fixed cost leverage, which the company has consistently shown it can achieve, we believe this expansion should lead to favorable cash earnings growth going forward.”
2. JD.com, Inc. (NASDAQ:JD)
1-Month Decline in Share Price as of March 29: 11.63%
Number of Hedge Fund Holders: 67
JD.com, Inc. (NASDAQ:JD) is a Chinese e-commerce retailer that offers a wide range of products including consumer electronics, home appliances, beverage and fresh produce, furniture and household goods, personal care items, and fashion accessories. The stock has been a top pick of Redditors but they have posted losses as the shares declined 11.63% over the last month.
On March 14, JPMorgan analyst Andre Chang double downgraded JD.com, Inc. (NASDAQ:JD) to Underweight from Overweight with a price target of $35, down from $100, citing his view that the sector-wide selloff might continue without valuation support in the near-term and global investors are decidedly backing away from their Chinese investments.
Among the hedge funds tracked by Insider Monkey, 67 funds were long JD.com, Inc. (NASDAQ:JD) at the end of the fourth quarter of 2021, compared to 66 funds in the third quarter. Tiger Global Management owns the biggest position in the company, with 53.7 million shares worth $3.76 billion.
Here is what Argosy Investors has to say about JD.com, Inc. (NASDAQ:JD) in its Q3 2021 investor letter:
“We sold JD as a result of the furor over Chinese stocks during the quarter. We had been concerned about China’s lack of respect for investor rights for some time, and Beijing has become significantly more aggressive in asserting itself of late. In addition, the legal structure Chinese companies use to come public in the U.S., a Cayman Islands shell corporation leaves American investors with an unsure path to recovering value should these companies cease to trade on U.S. exchanges. Because of the uncertainty, we exited our position in JD completely. We still love JD’s long-term prospects, but we cannot estimate the legal/regulatory risk associated with these companies anymore. More broadly, we are freeing up cash for some other positions we already own which have declined in this market, and after additional review, remain attractive.”
1. QUALCOMM Incorporated (NASDAQ:QCOM)
1-Month Decline in Share Price as of March 29: 7.93%
Number of Hedge Fund Holders: 75
QUALCOMM Incorporated (NASDAQ:QCOM) is a San Diego-based company that develops semiconductors and software for the wireless industry worldwide. The share price has declined close to 8% in the last month.
On March 9, QUALCOMM Incorporated (NASDAQ:QCOM) declared a $0.75 per share quarterly dividend, a 10.3% increase from its prior dividend of $0.68. This raise is effective after March 24, 2022.
Piper Sandler analyst Harsh Kumar on March 18 reiterated an Overweight rating on QUALCOMM Incorporated (NASDAQ:QCOM) with a $225 price target. According to the analyst, QUALCOMM Incorporated (NASDAQ:QCOM) is “set to capitalize on an already proliferating” internet of things opportunity. The analyst believes QUALCOMM Incorporated (NASDAQ:QCOM) shares are “currently mis-valued”.
According to the Q4 database of Insider Monkey, 75 hedge funds placed long bets on QUALCOMM Incorporated (NASDAQ:QCOM), compared to 70 funds in the earlier quarter. Alkeon Capital Management is the biggest shareholder of the company, with 5.30 million shares worth over $970 million.
Here is what ClearBridge Investments has to say about QUALCOMM Incorporated (NASDAQ:QCOM) in its Q1 2021 investor letter:
“Within IT, we have also increased exposure to a cyclical semiconductor industry currently working through a severe supply shortage due to several years of capacity reductions, COVID-19 shutdowns and one-off production delays as well as demand resilience in areas like autos and smartphones. The main risk for semiconductors is short-term revenue pressure until capacity catches up with demand, which hurts wireless chipmaker Qualcomm. Looking past current constraints, we expect the industry to see a strong second half and solid growth in 2022.”
You can also take a look at 10 Undervalued Small-Cap Stocks to Buy Now and 10 Penny Stocks with Upcoming Growth Catalysts.
