3 Robinhood stocks to buy right now
Do you trust the crowd using Robinhood Markets‘ (HOOD 11.70%) trading app? It would be understandable if you didn’t. The track record of stock picks from users of the trading platform has been haphazard at best.
However, retail investors have come a long way in their stock picking over the past few years, and Robinhood clients in particular. While arguably more aggressive than the average investor, these folks still have a preference for widely recognized names and quality blue chips.
Here’s a look at three of their most widely held picks right now that would likely feel right at home in your wallet.
1. PayPal Credits
The past few months have been tough for most stocks, but downright awful for PayPal Credits (PYPL 9.25%). The online payment powerhouse’s stock prices are down about 68% from last year’s high on the back of the revival of in-person shopping and the continued rollout of competing fintech platforms.
PayPal sellers, however, exceeded their target.
Of course, any other payment intermediary poses a threat to PayPal’s dominance. Bringing down the biggest player in the industry is no easy task, however. Nor dethrone the name that actually founded the online payment industry. The company still controls about half of this market despite the entry of competing services. And, despite these new digital payment options, PayPal is still expected to grow revenue to the tune of 11% this year before accelerating revenue growth by 16% next year, en route to record profits of $4.74 per share in 2023. The stock’s pullback over the past 12 months has prompted far more pessimism than is warranted.
That being said, potential investors may want to act quickly. Since last month, the strong sell-off had dragged stocks to new multi-year lows, including below its early-2020 nadir of $82.07, when the COVID-19-fueled panic selling turned everything upside down. There is little chance that this company or its shares will be worth less now than they have been at any time in the past few years, which at least partly explains the stock’s continued strength since last month’s low. This effort may well mark a bigger turning point for PayPal shares.
2.Ford Motor Company
For years, the shares of Ford Motor Company (F 3.50%) waded, and rightly so. Between the so-called peak in auto sales in 2016, the subsequent deterioration of Ford’s fiscal results, the advent of electric vehicles for which Ford was not quite ready, and then the disruption of supply chains of auto manufacturing, there wasn’t much for investors to like.
Ford’s foreseeable future, however, looks much better than its recent past.
Perhaps the biggest reason for optimism is the company’s increased efforts on the electric vehicle front. Ford had previously pledged to invest $30 billion in its electric vehicle business, but in March this year that figure increased, aiming to reach $50 billion by 2026. By 2030, up to half of its car production (and no less than 40%) should be electric vehicles.
And it’s a good start on that front. The company’s battery-powered Mustang Mach-E has been replaced You’re here‘s Model 3 as Consumer Reports’ favorite electric vehicle for 2022, while demand for its battery-powered F-150 Lightning pickup truck has been so strong that Ford has been forced to stop taking reservations for it.
In the meantime, the company’s combustion auto business is doing fairly well despite supply chain issues. The $40.2 billion in revenue last quarter not only topped the depressed numbers reported amid the pandemic. That number is back in sight of the company’s pre-pandemic sales levels and was Ford’s best second-quarter revenue ever. In fact, projected revenue of $159.3 billion for next year is only $1 billion away from Ford’s best 12-month sales of $160.3 billion, which it made in 2018. Clearly, the company is doing something right.
Finally, add Microsoft (MSFT 2.78%) to the list of actions Robinhood users love that you might also want to consider.
Anyone watching the software giant will likely know that Microsoft’s recently ended fourth quarter was a bit disappointing. Earnings per share of $2.23 and revenue of $51.9 billion were both below estimates of $2.29 per share and $52.4 billion, respectively. A combination of unfavorable exchange rates and falling consumer spending — especially on PCs — accounted for much of the shortfall, though its cloud computing operation also saw headwinds. In short, like most others, this company is starting to feel the fallout from the weak economy, so much so that it even started laying off a small number of its employees last month. It is also slowing down its hiring.
There’s a reason Microsoft’s stock has rallied rather than fallen since that news broke, though: all of those issues have already been factored into the stock price — and more. Analysts still expect revenue growth of 11% this year to accelerate to more than 14% next year, paving the way for record earnings of $12.11 per share in 2023 .
These growth prospects are not hard to believe either. Despite last quarter’s lackluster results, Microsoft’s Windows is still the operating system installed on three-quarters of the world’s computers, according to Global Stats, while company productivity software like Word, Excel and Outlook remain the essential choice for businesses and consumers. Meanwhile, market research firm Canalys believes Microsoft’s cloud business is gaining share over rival Amazon. Namely, Microsoft’s cloud revenue growth of 40% in the second calendar quarter of the year leaves it with a 24% share of a cloud market that Precedence Research predicts will grow on average by more than 17%. % per year until 2030.
In short, Microsoft has a nice avenue of growth ahead of it.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. James Brumley has no position in any of the stocks mentioned. The Motley Fool holds positions and endorses Amazon, Microsoft, PayPal Holdings and Tesla. The Motley Fool has a disclosure policy.