While many pro investors ignore the Robinhood crowd, labeling them as undisciplined investors because of their speculatory bets, there’s nothing wrong with a stock being popular on a trading platform, even without enough fundamental strength. Even though every Robinhood-listed stock may not pan out and become winners in the long term, there could be certain high-quality stocks that possess the right ingredients, along with popularity, to deliver market-beating returns.
Robinhood’s list of popular stocks offers a peek into the stocks that millennials are focusing on and are bullish about. Some of these stocks are on the cutting edge of innovation while also having a proven track-record of past performance. As major tech stocks are pretty expensive right now thanks to their ability to capitalize on the pandemic, betting on some low-priced technology stocks from the Robinhood list that possess enough growth catalysts could result in exponential returns.
Robinhood stocks like Ericsson ADS (ERIC), Zynga, Inc. (ZNGA), and GoPro, Inc. (GPRO) have strong fundamentals and is poised for future growth. These technology stocks are making waves in their respective sectors and are beating the path to become market leaders.
Ericsson ADS (ERIC)
ERIC provides communication services and technology. The company’s offerings include services, software, and infrastructure for broadband and telecommunications. The stock closed yesterday’s trading session at $10.9, gaining 38% year-to-date.
The company’s 5G NR carrier solution is expected to be launched by the fourth quarter, and will see a global rollout in 2021. ERIC, in collaboration with China Telecom, has recently successfully tested the first 5G standalone data call using ERIC’s spectrum sharing. This will pave the way for wider commercial deployment of 5G in China. ERIC has partnered with Belgium-based Proximus for providing 5G core implementation and the modernization of their 4G core.
ERIC is expected to witness revenue growth of 14.2% in the next quarter and 6.3% in 2021. The company’s EPS is estimated to grow 61.5% in the next quarter and at a rate of 24.5% per annum over the next five years.
How does ERIC stack up for the POWR Ratings?
B for Trade Grade
B for Buy & Hold Grade
B for Peer Grade
B for Overall POWR Rating
The stock is also ranked #7 out of 35 stocks in the Telecom – Foreign industry.
Zynga, Inc. (ZNGA)
ZNGA develops and operates several online video games that can be played through the internet, social media, and mobile platforms. The company has operations in the United States, Europe, and Asia. The stock was priced at $8.99 at the close of trading hours on October 19th, gaining 46.9% year-to-date.
ZNGA has recently acquired Rollic, an Istanbul-based game developer, which has spearheaded the company’s foray into hyper-casual mobile games. This move will also help the company diversify its advertising revenue and give it access to an extensive network of game developers. The company has also acquired Peak, which is the creator of popular games such as Toon Blast and Toy Blast.
ZNGA is expected to witness revenue growth of 50% in the next quarter and 21.3% in 2021. The company’s EPS is estimated to grow 12.5% in the next quarter and at a rate of 16.75% per annum over the next five years.
It’s no surprise that ZNGA is rated a “Buy” in our POWR Ratings system, with a grade of “B” in Trade Grade, Peer Grade, and Industry Rank. In the 15-stock Entertainment – Toys & Video Games industry, it is ranked #4.
GoPro, Inc. (GPRO)
GPRO develops cameras and related accessories. The company’s range of premium accessories includes battery packs, smart remotes, LCD touch BacPac accessories, mounts, and so on. The stock closed yesterday’s trading session at $6.59, gaining 51.7% year-to-date.
GPRO has recently announced the global launch of its HERO9 Black camera that will feature 5K video capabilities and 30% longer battery life, among other upgrades. The company has also launched a new live streaming service that will help GoPro Plus subscribers to quickly live stream their videos. The company has also launched the GoPro Player for Windows which is a video-editing tool for 360-degree videos.
GPRO is expected to witness revenue growth of 78.8% for the quarter that ended September 2020 and 19% in 2021. The company’s EPS is estimated to grow 5,400% in 2021 and at a rate of 10% per annum over the next five years.
GPRO’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” in Trade Grade and Peer Grade, and a “B” in Buy & Hold Grade and Industry Rank. In the 30-stock Technology – Hardware industry, it is ranked #15.
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ERIC shares were trading at $11.28 per share on Tuesday afternoon, up $0.34 (+3.11%). Year-to-date, ERIC has gained 29.87%, versus a 9.29% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaryaman Aashind
Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks. More...
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