September is historically considered the worst month for investing. And given the resurgence of COVID-19 cases and the rising inflation, many analysts expect the stock market to remain under pressure in the near term. So, we think one of the best strategies this month could be to bet on popular stocks.

The zero-commission online brokerage platform provider Robinhood Markets, Inc. (HOOD), which went public in July, is known to be one of the top choices of millennial and Gen Z traders. As a result, stocks transacted through this platform are assumed to be highly popular.

Therefore, we think it could be a smart decision to bet on Microsoft Corporation (MSFT), Facebook, Inc. (FB), Pfizer Inc. (PFE), Starbucks Corporation (SBUX), and GoPro, Inc. (GPRO) that are favorites of Robinhood traders. In addition to their fundamental strength, these stocks’ popularity could help them outperform the broader market this month.

Microsoft Corporation (MSFT)

MSFT develops, supports, licenses, and sells various software products, services and solutions worldwide. The Redmond, Wash.-based company also manufactures and sells PCs, tablets, gaming and entertainment consoles, other intelligent devices, and related accessories through OEMs, distributors, resellers, digital marketplaces, and retail stores. It is ranked #2 in the Robinhood Top 100 list.

MSFT and EY (or Ernst & Young Global Limited), a multinational professional services network in London, expanded their strategic relationship on August 11, 2021, to further align EY business ingenuity with MSFT’s cloud technologies by launching new solutions and platforms. By further extending the operation of the EY Microsoft Services Group, EY hopes to help clients gain access to managed services that fuel client transformation, unlock value and develop a first-of-its-kind, enterprise-scale, trusted data fabric to achieve a $15 billion growth opportunity over the next five years.

On July 14, 2021, MSFT unveiled Windows 365, a cloud service that introduces a new way to experience Windows 10 or Windows 11 to businesses of all sizes. Secure by design and built with the principles of Zero Trust, Windows 365 secures and stores information in the cloud, not on the device, providing a secure, productive experience for its users. MSFT expects to generate high demand for this cloud service as organizations continue to adopt hybrid work models.

MSFT’s total revenue increased 21.3% year-over-year to $46.15 billion for its fiscal fourth quarter, ended June 30, 2021. The company’s gross profit came in at $32.16 billion, up 25.2% from the prior-year period. Its operating income came in at $19.10 billion, representing a 42.4% year-over-year improvement. MSFT’s net income was $16.46 billion, up 46.9% from the prior-year period. Its EPS increased 48.6% year-over-year to $2.17. As of June 30, 2021, the company had $14.22 billion in cash and cash equivalents.

Analysts expect MSFT’s EPS to increase 13.8% year-over-year to $2.07 in the current quarter, ending September 30, 2021. A $44.01 billion  consensus revenue estimate for the current quarter reflects an 18.5% increase year-over-year. MSFT surpassed the Street’s EPS estimates in each of the four trailing quarters. The stock’s EPS is expected to grow at a 15.3% rate per annum over the next five years.

The stock has gained 40.6% in price over the past nine months and 4.9% over the past month. It closed Friday’s trading session at $301.14.

MSFT’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

MSFT has a B grade for Stability, Sentiment, and Quality. In the 146-stock Software – Application industry, it is ranked #13.

To see additional POWR Ratings for Growth, Value, and Momentum for MSFT, click here.

Click here to check out our Software Industry Report for 2021

Facebook, Inc. (FB)

FB develops social media applications to connect through mobile devices, personal computers, virtual reality headsets, and in-home devices worldwide. The  Menlo Park, Calif.-based company’s products include Facebook, Instagram, Messenger, WhatsApp, and Oculus. It is ranked #40 in the Robinhood Top 100 list.

On August 11, 2021, FB announced new features to help protect people from abuse on Instagram, one of FB’s photo and video-sharing social networking platforms, by introducing Limits. This feature will automatically hide comments and DM requests from people and deliver stronger warnings when posting potentially offensive comments. This should provide a better and safer experience for its users and keep more people engaged in the platform.

During its fiscal second quarter, ended June 30, 2021, FB’s revenue increased 55.6% year-over-year to $29.08 billion. The company’s income from operations came in at $12.37 billion, up 107.4% from the prior-year period. While its net income increased 100.7% year-over-year to $10.39 billion, its EPS increased 100.6% year-over-year to $3.61. The company had $16.51 billion in cash and cash equivalents as of June 30, 2021.

Analysts expect FB’s EPS to grow 31.9% year-over-year to $3.17 in the current quarter, ending September 30, 2021. A $29.46 billion consensus revenue estimate for the current quarter indicates a 37.2% rise from the year-ago period. Furthermore , FB has surpassed consensus EPS estimates in each of the four trailing quarters. FB’s EPS is expected to grow at a 28.6% rate per annum over the next five years.

The stock has gained 47.3% in price over the past six months and 7.1% over the past month. FB closed Friday’s trading session at $376.26.

FB’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to Buy. In addition, FB has an A grade for Quality, and a B grade for Sentiment.

Moreover, it is ranked #4 of 76 stocks in the Internet industry.

In addition to the POWR Rating grades we’ve highlighted, one can see FB’s ratings for Growth, Stability, Value, and Momentum here.

Pfizer Inc. (PFE)

PFE in New York City operates as a pharmaceutical company that offers medicines, vaccines, medical devices, and consumer healthcare products worldwide for oncology, inflammation, cardiovascular, and other therapeutic areas. It serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, and individual provider offices, as well as disease control and prevention centers. It is ranked #22 in the Robinhood Top 100 list.

On August 26, 2021, PFE and BioNTech SE (BNTX) signed a letter of intent with Eurofarma Laboratórios SA, a Brazilian biopharmaceutical company, to manufacture COMIRNATY (COVID-19 Vaccine, mRNA) for distribution within Latin America. Eurofarma will handle manufacturing activities within PFE’s and BNTX’s global COVID-19 vaccine supply chain and manufacturing network and expects to exceed 100 million finished doses annually. The companies expect to witness expanding market reach in the coming months.

On August 23, the U.S. Food and Drug Administration (FDA) approved the Biologics License Application (BLA) for COMIRNATY to prevent COVID-19 in individuals 16 years of age and older. This full approval underlines the vaccine’s high efficacy and favorable safety profile.

PFE’s revenue for its  fiscal second quarter, ended July 4, 2021, came in at $18.98 billion, representing a 92.4% rise from the prior-year period. The company’s non-GAAP income from operations came in at $6.11 billion, up 75.5% from the prior-year period. Its non-GAAP net income was  $6.08 billion, representing a 75.2% improvement from the year-ago period. Its non-GAAP EPS increased 72.6% year-over-year to $1.07. As of June 30, 2021, the company had $2.37 billion in cash and cash equivalents.

Analysts estimate PFE’s EPS to be $1.09 for the current quarter, ending September 30, 2021, representing a 51.2% improvement year-over-year. PFE surpassed consensus EPS estimates in three of the trailing four quarters. A $22.75 billion consensus revenue estimate for the current quarter represents an 87.6% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 12.4% rate per annum over the next five years.

PFE has gained 36.2% over the past six months and 2.5% over the past month. It ended Friday’s trading session at $46.84.

PFE’s POWR Ratings reflect this promising outlook. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system.

The stock has a B grade for Growth, Value, and Quality. Click here to see the additional ratings for PFE (Sentiment, Momentum, and Stability).

Of the 216 stocks in the Medical – Pharmaceuticals industry, PFE is ranked #7.

Click here to checkout our Healthcare Sector Report for 2021

Starbucks Corporation (SBUX)

SBUX, in Seattle, Wash., operates as a multinational chain of coffeehouses where it retails, roasts, and provides its own brand of specialty coffee. Its stores offer a line of ice creams and various food products. The company also licenses its trademarks through licensed stores and grocery and foodservice accounts. It is ranked #42 in the Robinhood Top 100 list.

SBUX’s Starbucks Coffee Company opened its first Farmer Support Center in Brazil on August 17, 2021, to extend its presence in a key coffee-producing region and provide valuable resources to local coffee communities as part of its commitment to source coffee. SBUX will work alongside local producers, suppliers, and agencies to gain greater knowledge of advanced growing techniques and produce high-quality coffee in the future.

On July 26, 2021, SBUX and Nestlé (NSRGY) announced a new collaboration to bring Starbucks Ready-to-Drink (RTD) coffee beverages to select markets across Southeast Asia, Oceania, and Latin America and to help it reach out to consumers there. Both companies will focus initially on rolling out SBUX’s most popular RTD products, such as Starbucks Frappuccino and Starbucks Doubleshot, and will continue developing a robust innovation pipeline. This collaboration could help the companies benefit from customers’ evolving needs.

For its fiscal third quarter, ended June 27, 2021, SBUX’s total net revenues increased 77.6% year-over-year to $7.50 billion. The company’s non-GAAP operating income came in at $1.54 billion versus a $530.20 million loss in the prior-year period. SBUX’s net income has been reported at $1.15 billion for the quarter, versus a $678.40 million loss in the year-ago period. Its non-GAAP EPS has been reported at $1.01, compared to a $0.46 loss per share in the prior-year period. As of June 27, 2021, the company had $4.75 billion in cash and cash equivalents.

Analysts expect the stock’s EPS to improve 98.4% year-over-year to $1.01 in the current quarter, ending September 30, 2021. It surpassed the Street’s EPS estimates in each of the four trailing quarters. Its $8.28 billion revenue estimate for the current quarter represents a 33.5% year-over-year improvement. SBUX’s EPS is expected to grow at a 54.8% rate  per annum over the next five years. SBUX has gained 17.1% in price over the past nine months to end Friday’s trading session at $117.19.

It’s no surprise that SBUX has an overall rating of A, which translates to Strong Buy in our POWR Ratings system. In addition, the stock has a B grade for Growth, Sentiment, and Quality.

The stock is ranked #4 of 46 stocks in the A-rated Restaurants industry.

Click here to see additional POWR Ratings in Value, Momentum, and Stability for SBUX.

GoPro, Inc. (GPRO)

GPRO develops and sells cameras, drones, and mountable and wearable accessories internationally that are designed for use in activities ranging from action sports to professional videography. The company also offers mobile applications and software to enable users to edit, manage, and share their files and sells its products through its website, retailers, and distributors. GPRO is ranked #27 in the Robinhood Top 100 list. GPRO is based in  San Mateo, Calif.

As of September 2, 2021, GPRO’s U.S. Patent Portfolio surpassed 1,000 granted patents. GPRO is looking forward to expanding its market reach in the coming months.

On June 22, 2021, GPRO announced ‘Open GoPro,’ an open API initiative that makes it easy for third-party developers to integrate HERO9 Black Waterproof Action Camera into their own development efforts. Also, GPRO released a new firmware update in HERO9 Black camera that improved its camera power on/off speed and consistency, and touch screen sensitivity. GPRO expects to witness high demand for this product in the coming months.

GPRO’s revenue for the fiscal second quarter, ended June 30, 2021, increased 85.9% year-over-year to $249.59 million. The company’s gross profit came in at $99.28 million, up 144% from the prior-year period. Its non-GAAP income from operations was $20.72 million, versus a  $26.66 million loss in the prior-year period. GPRO’s non-GAAP net income came in at $19.86 million, compared to a $29.72 million loss in the prior-year period. Its non-GAAP EPS came in at $0.12, versus a $0.20 loss per share in the year-ago period. As of June 30, 2021, the company had $285.81 million in cash and cash equivalents.

The $0.75 consensus EPS estimate for the current year represents an 841% improvement year-over-year. GPRO surpassed consensus EPS estimates in each of the trailing four quarters. A $1.15 billion consensus revenue estimate for the current year represents a 28.7% gain from the prior-year period. Analysts expect the stock’s EPS to grow at a 10% rate per annum over the next five years. GPRO gained 17% in price over the past six months and ended Friday’s trading session at $9.91.

GPRO’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system.

The stock has an A grade for Growth and Quality, and a B grade for Value and Momentum. We also have graded GPRO for Sentiment and Stability. Click here to access all GPRO ratings.

Of the 46 stocks in the B-rated Technology – Hardware industry, GPRO is ranked #7.

MSFT shares were trading at $300.02 per share on Tuesday morning, down $1.12 (-0.37%). Year-to-date, MSFT has gained 35.77%, versus a 21.58% rise in the benchmark S&P 500 index during the same period.

About the Author: Sweta Vijayan

Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...

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