These 5 Wall Street Bets Stocks Actually Have Staying Power

The Reddit trading frenzy created a lot of volatility, but it may have uncovered a handful of stocks that still have room to grow.

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Whether you’re an avid trader, a novice investor, or just read the news, you no doubt learned about the Reddit trading craze in which a group of individual investors, many trading on Robinhood, identified heavily shorted companies and began buying up shares. Stocks like GameStop (GME), AMC Entertainment (AMC) and BlackBerry (BB) rapidly reached all-time highs and just as rapidly gave back most of those gains.

GME and AMC still top the list of “trending stocks” on Reddit’s Wall Street Bets page and have recouped some of those losses, but are still trading roughly 50% below those January highs. Most retail investors that bought in during the frenzy ended up losing money; only investors that bought in advance of the rally, or after the shares corrected likely profited off the trades. But there are other “trending” stocks on the thread that are not only still performing well now, but have been for quite some time.

The following five stocks all made the top 20 on the Wall Street Bets trending page. All of them are either trading within a reasonable range of their all-time highs, or trading well above their 200-day moving averages. And all of them have posted market-beating returns in the past 12 months.

Here are five Reddit stocks that look well positioned for the long haul:

5 Reddit Stocks with a Shelf Life
Digital Turbine (APPS)
Millennials love apps, so why not invest in a stock with the same ticker symbol?! In reality, Reddit users’ fascination with APPS goes much deeper than that, and with good reason: the company provides apps for mobile phones and is, in fact, the only company imbedded in the Android operating system to allow for app downloading. With 6,000 apps being added per day to the Android platform, that’s an enormous – and growing – customer base, with big-name clients such as Netflix and Amazon.

With earnings expected to more than triple this year, and sales expected to more than double, there’s a whole lot to like about Digital Turbine. The valuation is high, and the stock has become super volatile of late, but you can’t argue with the performance over the last year.

Dycom Industries (DY)
Dycom supplies skilled workers for the telecommunications service provider industry. The sales growth is modest (1.4% expected this year), but the earnings growth is enticing (16.8% estimated). And obviously the returns have been quite impressive over the past year, with the stock stair-stepping higher for some time. Still, it’s unclear why Reddit users are so infatuated with this small-cap stock.

First Majestic Silver Corp (AG)
Silver stocks and ETFs have attracted the Reddit crowd’s wandering eye of late, none more so than this Mexican-based silver miner. Most of the stock’s gains in the last year came during the mad rush in late January, as AG peaked at 22 before crashing to 16 in the first week of February. It’s been up and down since, but is still holding nicely above its 200-day moving average. I’d wait for this one to stabilize before attempting to buy.

Palantir Technologies (PLTR)
Big data is big business these days, and Palantir is a software company that specializes in big data analytics. It’s growing like a weed: sales are expected to expand 35% this year, and earnings per share are expected to rise a whopping 700% (from 2 cents to 16 cents). PLTR came public in late September and is up over 100% since, despite a big pullback in February and mostly sideways trading in March. Having built a base for most of the last month, a breakout to the upside could be forthcoming if growth stocks continue to get their act together.

But as a recent IPO in a high-growth, tech-based industry, it’s easy to see why Palantir appeals to the Reddit crowd.

MSC Industrial Direct (MSM)
MSC is one of the largest industrial equipment distributors in the U.S., providing metalworking and other tools. With the Biden administration making improving America’s infrastructure one of its primary objectives, it’s no coincidence most of MSM’s gains have come since the November election. Right around 52-week highs, and with only modest volatility (1.06 beta), MSM looks buyable right here.

Did you trade in any of the Reddit “meme stocks” and what was your experience?

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