The 6 Best Reddit Stocks To Buy Right Now

March 10, 2021
By The Investing Insider Staff

These six stocks - better known as “stonks” - are catching fire.  Don’t miss out.

Stonks... Diamond hands... HODL... YOLO… Apes…

If you’re an investor that’s not already familiar with these common Reddit terms, then you ought to learn them - and do it as quickly as possible.

Reddit stocks discussed in subreddits like r/WallStreetBets, r/RobinHood, and r/pennystocks have recently been thrust into the spotlight - with some retail investors making millions of dollars practically overnight by buying shares of the most popular “meme” stocks.

In fact, this army of retail investors have quickly become a massive and legitimate force to contend with.

Just ask some of the Wall Street hedge funds that were nearly wiped out during the infamous short squeeze in shares of GameStop Corp. (NYSE:GME) back in January of this year.

Melvin Capital, Viking Global Investors, and D1 Capital Partners are just three of the companies that racked up massive losses as retail investors banded together to force these funds to cover their short positions.

For Melvin Capital in particular, the Wall Street Journal reported that the hedge fund lost a staggering 53% during the month of January as share prices of GME and other heavily shorted stocks soared.  

In fact, it took a massive $2.75 billion financial lifeline from prominent hedge funds Citadel and Point72 Asset Management in order to save the company.

Simply put, the newfound power of these retail investors is stunning - which is why Reddit stocks have exploded in popularity in recent weeks.

To help you navigate this red-hot sector, here’s a look at 6 of the best stocks being discussed in the subreddit communities right now. 

Rocket Companies (NYSE:RKT)

Koss Corporation (NASDAQ: KOSS) 

AMC Entertainment Holdings (NYSE: AMC) 

BlackBerry Inc. (NYSE: BB) 

Nokia (NYSE: NOK)  GameStop Corp. (NYSE:GME)

Rocket Companies (NYSE:RKT)

RKT has become a favorite of Reddit investors and it’s easy to see why.

Founded by Dan Gilbert, the co-founder of Quicken Loans and the owner of the National Basketball Association's Cleveland Cavaliers, Rocket Companies is a Detroit-based holding company that provides real estate, mortgage, and financial services.

Rocket Companies consists of personal finance and consumer service brands that include Rocket Mortgage, Rocket Homes, Rocket Loans, Rocket Auto, Rock Central, Amrock, Core Digital Media, Rock Connections, Lendesk, and Edison Financial. 

On February 21, RKT announced record results for the quarter and year ended December 31, 2020.  Annual revenues grew 208% YOY from $5.12 billion to $15.74 billion while net income grew 948% YOY from $897 million to $9.4 billion.

And it looks like RKT’s rapid growth trajectory is likely to continue. According to Jay Farner, Rocket Companies’ Vice Chairman and CEO, the company will, “continue to invest in our world-class technology driven solutions that allow us to diversify our scalable platform business model.”

Koss Corporation (NASDAQ:KOSS) 

Founded in 1953 and headquartered in Milwaukee, Wisconsin, Koss Corp designs, manufactures, and sells stereo headphones and related accessory products.  Koss Corporation also offers digital audiophile compact disc recordings of American orchestras on its Koss Classic Label.

To give you an idea of how popular this stock is with the Reddit crowd, KOSS traded as low as $3.45 on January 25, 2021.  3 days later on January 28, the stock soared to a high of $127.45 for a staggering gain of 3,594%.

However, the stock still remains a favorite for Reddit investors. For the 6 months ended December 31, 2020, the company reported revenues of $10.1 million and net income of $640 million.  That’s a huge improvement YOY when the company reported revenues of $9.6 million and a net loss of $526 million. 

AMC Entertainment Holdings (NYSE:AMC) 

AMC Entertainment Holdings Inc. is a movie theater chain that operates in the U.S. and Europe.

As you probably know, the COVID-19 outbreak forced many theaters to close their doors for months.  Even when some venues reopened with safety precautions in place, audiences remained hesitant to frequent their local cinemas.  Making matters worse, Hollywood studios delayed major big-budget film releases and began offering these movies on streaming platforms instead.

Not surprisingly, AMC’s stock tumbled throughout the pandemic to hit a low of just $1.91 per share on January 5, 2021.

But not long after, Reddit investors piled into the stock and orchestrated a short squeeze that sent the stock soaring to a high of $20.36 on January 27, 2021.

Although the future of AMC remains uncertain, the markets clearly believe that the company will likely survive the COVID-19 pandemic and will eventually return to profitability some time in the near future.  The company recently announced that 98% of their U.S. theaters would be open for business by March 19, 2021.

BlackBerry Inc. (NYSE:BB) 

BlackBerry was once the world’s largest smartphone manufacturer.  However, the company has since pivoted into software and now solely provides end-to-end secure communication for enterprises - specializing in regulated industries like government, as well as embedded software to the automotive, medical, and industrial markets.

BB has been a favorite of Reddit users for several months now.  After trading flat for the first 7 months of the coronavirus pandemic, a Reddit-orchestrated short squeeze pushed the stock to a high of $28.77 per share in January 2021.

Although shares have since pulled back from the peak, they’re still trading well above pre-pandemic levels.

For the 9 months ended November 30, 2020, the company reported revenue of $683 million and a net loss of $789 million.

Nokia (NYSE:NOK) 

Founded in 1865 and headquartered in Espoo, Finland, Nokia is a leading vendor in the telecommunications equipment industry.  The company operates through several business groups including Mobile Networks, Global Services, Fixed Networks, IP/Optical Networks, Nokia Software, Nokia Enterprise, and Nokia Technologies.

Similar to the other stocks in this list, NOK saw its shares run up during the month of January when Reddit investors banded together to pressure short sellers.

The stock surged to a high of $9.79 per share before quickly falling back to the $4.00 per share range.

However, the company still remains one of the most discussed topics on subreddits with many investors betting on a turnaround for the company. For the year ended December 31, 2020, NOK generated €21.85 billion in revenue and reported a net loss of €2.516 billion.

GameStop Corp. (NYSE:GME)

While you would think that the wild volatility in shares of GME would turn off investors, it still remains the most popular stock discussed amongst Reddit users today.

As mentioned, the video game retailer saw its stock spike in late January to as high as $483 per share during the massive short squeeze orchestrated by members of the subreddit r/WallStreetBets. 

But what happened after is perhaps even more interesting.

Although the stock subsequently fell to a low of just $38.50, they’ve since rebounded spectacularly - recently touching a high of $348.50 per share.

However, while the stock remains popular with the army of Reddit and Robinhood investors, it has become just as popular with the Wall Street crowd as well.  

“Bond King” Bill Gross recently revealed that he made over $10 million on GME by shorting the stock.  And as of Feb 26, 2021, the short interest is still 20.36% of the outstanding shares and 52.04% of the float outstanding.

What does the future hold?  Chewy founder Ryan Cohen bought 9 million shares of the retailer back in August of last year. He and two associates would later join the board in January 2021.

It was recently announced that Cohen will chair a new board committee tasked with transforming GME’s business model to become an e-commerce player that sells more than just video games - rather than focusing on maintaining a brick-and-mortar presence.  The new strategic planning and capital allocation committee will include Cohen, Alan Attal, and Kurt Wolf.

It will be very interesting to see what will happen with this company over the next several months.  Stay tuned.

-Investing Insider Staff
This article is informational purposes only and is not investment advice.  See full disclaimer here
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