Though Robinhood investors receive a lot of flack for their supposed naivete, many of these inexperienced traders are making healthy profits.

Sort through the top stocks traded on the Robinhood 100 and you’ll find some are truly worthy of the hype. In fact, some Robinhood stocks are rated as “Strong Buy” and poised to reach new highs in our proprietary POWR Ratings service.

Below, we shine the spotlight on three such Robinhood stocks ready to make new highs:

Alibaba (BABA)

The Robinhood traders are on the right track with BABA. This Chinese e-commerce behemoth is worthy of the hype and then some. BABA is expanding its horizons beyond e-commerce to cloud computing, food delivery and additional services. The company operates under the names of Tmall, Taobao and Alibaba.com. However, one-half of BABA’s sales stem from its web-based retail sales throughout China.

Every investor should be interested in this rapidly growing e-commerce superstar. BABA has “A” grades in the POWR Ratings components of Trade Grade, Buy & Hold Grade, Peer Grade and Industry Rank. If that were not enough to pique your interest, consider the fact that BABA is ranked first of 115 stocks in the China category.

TipRanks reports the top analysts have set an average price target of $328.86 for BABA, meaning it has about 5% potential upside. BABA’s rapid growth and bullish prospects have certainly generated interest in the stock yet its forward P/E is still hovering slightly above 30.

BABA has certainly enjoyed an epic run since the spring. However, there is a strong chance this stock will continue climbing higher and higher as we move forward into a future dominated by e-commerce as opposed to shopping in traditional retail stores.

BABA’s cloud computing operations grew nearly 60% in the first-quarter. This is comforting considering the shift toward the cloud. It is clear BABA executives are diversifying their operations, ensuring they can hold strong even if consumer spending decreases. BABA is clearly a buy and hold stock.

Walmart (WMT)

Robinhood traders have picked a winner in WMT.  WMT has seen significant success quickly pivoting toward online sales over the past few years. WMT recognized the societal shift toward shopping online and adjusted as necessary. WMT is now a legitimate omnichannel powerhouse likely to capture additional market share in the years ahead. 

WMT sells a little bit of everything at unbeatable prices, making it one of the best stocks to own through the pandemic and beyond. Those who convert into WMT shoppers during the pandemic will likely remain loyal to the company in the years ahead.

WMT has “A” POWR Rating grades in the following components: Trade Grade, Buy & Hold Grade and Industry Rank. WMT is ranked 5th of 18 stocks in the Grocery/Big Box Retailers space. TipRanks reports the analysts have established a $150.02 price target for WMT, meaning the stock is likely to increase by 3-4% in the near future.

WMT has an impressive earnings growth rate of 5.6%. The holiday season should help WMT reach even new heights as this big box retailer sells electronics, clothing, food and other sundries sure to attract holiday shoppers. WMT’s Walmart+ membership program is available for less than $100 per year, providing members with same-day grocery and merchandise delivery. This program will prove even more popular if there is a second wave of COVID-19 this autumn and winter, possibly helping WMT rise well beyond its 52 week high of $151.33.

PayPal (PYPL)

If you have not used PYPL services in the past, you will likely use them at some point in the near future. PYPL is becoming even more important as businesses and everyday people reduce their use of tangible currency, instead opting for digital exchanges. 

PYPL facilitates such payments through its PayPal and Venmo websites. Venmo is proving particularly popular during the pandemic, accounting for nearly 15% of PYPL’s aggregate payments. This percentage is more than a 50% increase from the year prior.

PYPL has “A” grades in the following POWR Rating components: Trade Grade, Peer Grade and Buy & Hold grade. PYPL is ranked 5th of 46 stocks in the Consumer Financial Services category. The top analysts believe PYPL will hit $221.93, meaning the stock has nearly 9% potential upside.

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BABA shares were trading at $309.06 per share on Monday afternoon, up $1.75 (+0.57%). Year-to-date, BABA has gained 45.71%, versus a 9.04% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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