The combination of the stay-at-home orders, stimulus checks, and explosive rebound in stocks have led to increased activity among retail traders. Nowhere is this more apparent than at Robinhood, a brokerage with free commissions that are built for the next generation of traders.
The company releases a list of the top 100 most popular stocks on its platform. Many of the favorites are well-known like the mega-cap tech giants, and others are bets on small and midcap stocks returning to pre-coronavirus levels as the economy opens back up again like cruises and airlines.
The stock market in June has been range-bound. The S&P 500 started the month at 3,055, and it’s opening at 3,053 on the last day of the month. In between, it got as high as 3,320 and made a few, brief forays under 3,000. However, within this sideways market, there was a considerable amount of rotation with some stocks breaking out and others breaking down.
This is apparent from the three best-performing stocks in the Robinhood 100:
Workhorse Group (WKHS)
WKHS is a small manufacturer of electric vehicles, and its stock is higher by 510% month-to-date. WKSH opened the month at $2.48 and is set to open above $17 today. Electric vehicles have been one of the hottest market themes this month, as investors get excited by the potential of larger companies like Tesla (TSLA) and Nikola (NKLA).
Other catalysts for WKSH’s strength are its 10% stake in Lordstown Motors which is competing with Tesla and Nikola to bring an electric pickup truck to market. The company also is developing electric delivery vans that would be suited for FedEx (FDX) and UPS (UPS). It also has a unit focused on making delivery drones.
WKHS also has a very strong POWR Ratings with a “Strong Buy Rating”. It also has an “A” for Trade Grade, Buy & Hold Grade, and Peer Grade with a “B” in Industry Grade. It’s ranked #4 among Auto & Vehicle Manufacturers.
NIO is a Chinese company, competing in the electric vehicle space. For much of this year, its stock had been depressed due to concerns that it didn’t have enough cash to survive and had to borrow money to make payroll.
This was compounded by some Chinese companies being outed for accounting fraud at the same time, so there was unease about investing money into an already speculative endeavor. Additionally, there was the coronavirus which led to shutdown for much of February and early-March.
However, NIO’s stock is 111% higher in June. The main catalyst is the Chinese government decided to extend subsidies for companies developing battery technology like NIO, and the local government’s infusion of $1.4 billion to relieve short-term liquidity issues. Another factor is that sentiment and risk appetites towards electric vehicles have become frothy.
NIO is rated a “Buy” by the POWR Ratings. It has an “A” in Trade Grade, Peer Grade, and Industry Rank with a “B” in Buy & Hold Grade. It’s ranked #17 among Chinese stocks.
INO is up 106% in June. The stock’s major focus is on developing DNA-based vaccines for infectious diseases which makes it the ideal company for this moment. It has been running clinical trials to test its experimental vaccine, INO-4800.
There’s been excitement around stocks that are developing a vaccine for the coronavirus especially with “Operation Warp Speed” which is the US government’s efforts to support and expedite these efforts. The stock gave up some recent gains as phase 1 of its clinical trial underwhelmed relative to investors’ expectations, although it said that 36 out of 40 recipients showed an immune response. The company is starting a phase 2/3 trial later this summer.
INO’s stock is rated a “Strong Buy” by POWR Ratings. It has an “A” in all categories including Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. Among the biotech group, it’s ranked #11.
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WKHS shares were trading at $17.79 per share on Tuesday afternoon, up $3.28 (+22.61%). Year-to-date, WKHS has gained 485.20%, versus a -3.84% rise in the benchmark S&P 500 index during the same period.
About the Author: Jaimini Desai
Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. As a reporter, he covered the bond market, earnings, and economic data, publishing multiple times a day to readers all over the world. Learn more about Jaimini’s background, along with links to his most recent articles. More...
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