We are into the second phase of 2021 and the stock market is already creating new entry points. For more than a year, volatility has been a big theme for Wall Street. There has been the quickest decline of at least 30% in history for the benchmark S&P 500 during the first quarter of 2020. And the strongest bounce-back rally from a bear-market bottom of all time. Robinhood is one of the most prominent platforms for investors. This is likely because of its commission-free trading in stocks, ETFs, options, and cryptocurrencies.
There are thousands of stocks trading on the NYSE and Nasdaq. But to generate big gains, you have to find the very best. The best Robinhood stocks for investors will be those that offer a mix of earnings and stock market performance.
There’s the latest update on Robinhood. Securities and Exchange Commission Chairman Gary Gensler has hinted at banning the controversial practice of payment for order flow. Also, know as PFOF.
Payment for order flow is one of Robinhood’s largest revenue sources. That’s the way the Robinhood trading app is able to provide zero-commission trading. Payment for order flow is a controversial practice. And, lately, it has been under the radar of legal authorities. SEC Chairman said that PFOF has an inherent conflict of interest.
However, Robinhood has highlighted that if the PFOF model changed, the brokerage and the industry could adapt.
Johnson & Johnson Stock (JNJ)
Johnson & Johnson (JNJ) will not have a swift pump anytime soon, but it won’t collapse as suddenly, either. JNJ is one of the oldest medical firms in the industry with a solid reputation. It is also one of the most valuable companies in the market.
The company has been successful in regularly growing its revenue, maintaining profitability, and delivering consistent returns to investors as dividends and share buybacks.
The key reason for JNJ’s success is its strong background in consumer healthcare and pharmaceutical products. This brings in the majority of the revenue for the company.
Moreover, the ongoing demand for Johnson & Johnson’s goods supports the growth and safety of its dividend in the long term. Over the last 58 years and counting, Johnson & Johnson has raised its dividend payout, making it one of the dividend kings in the industry. As of now, the stock’s dividend yield is about 2.39%, which is higher than the S&P 500’s average yield of 1.35%.
Johnson & Johnson is a strong long-term buy at the moment in Robinhood stock’s top list.
Nvidia Stock (NVDA)
Nvidia (NVDA), the graphics-chip maker, is one of the hot stocks in the Robinhood list. The Nvidia stock is expected to make a correction after touching its all-time high recently. In the long run, the stock would create new entry options for investors.
The relative strength line is trying to make progress again after a dip during its consolidation. As mentioned, Nvidia stock will consolidate and the recent pump is being pushed by strong second-quarter results. An increase in gaming sales and solid data-center processor revenue supported the strong Q2 outcomes.
Nvidia stock has a perfect IBD Composite Rating of 99. Also, the stock has outperformed the S&P 500’s gain of over 19%, up to around 68%.
For the current quarter, Nvidia expects to generate sales of about $6.8 billion, up 44% year over year. The intriguing part is that Wall Street has anticipated a strong third quarter. Wall Street expects Nvidia stock to report earnings of $1.05 per share on sales of $6.57 billion.
So, Nvidia holds a powerful position both in the short and long term.
Power stock (PLUG)
Plug Power (PLUG) comes up with a lot of potential and is in line with those companies which would dominate their industries in the future. The fuel cell company is a top Robinhood stock focuses on hydrogen cell technology has grown its revenue impressively in the last few years. However, it is still nowhere near profitability. That’s a mixed signal.
It may take quite a few years before Plug Power reaches that profitability mark. But, for a growing company, that isn’t necessarily a concern.
Just like Tesla (TSLA), which has not been in profit but the stock has outperformed in recent times. Plug Power stock has the same potential of growth in the long run.
Using hydrogen as a fuel is increasingly gaining traction. Many countries are actively promoting hydrogen as they try to make pollution-free energy. For instance, South Korea is targeting 81,000 fuel cell electric vehicles in use by 2022. And, hopes to increase this number to 2.9 million by 2040.
However, looking at the gross margin’s stats, Plug Power hasn’t been impressive at all. In over two decades, the company has reported losses. To your surprise, Plug Power’s second-quarter loss stood at $99.6 million, compared to a loss of $9.4 million in the second quarter of 2020.
Plug Power is backing on stockholders’ funds and believes that it would finally generate a gross margin of over 30% by 2024.
Square (SQ) stock has fallen back into a base after surging earlier this month. The recent downtrend has offered aggressive entries. The stock currently holds a very impressive Composite Rating of 97. So far, Squares’ shares have soared up to 24% in 2021.
Earlier this year, Square posted a first-quarter sales increase of 266% to $5.05 billion. Whereas, the EPS jumped to $0.41 per share from a loss of $0.20 per share.
The key for square has been its increasing subscriptions. The company has significantly increased its revenue from its subscription and services-based products. Another aspect that could act as a catalyst for Square stock is its love for Bitcoin.
Squares’ CEO Dorsey said the company will create a new business line to help developers build financial services products focused on Bitcoin. Square is building an open developer platform to improve decentralized financial services.
Catalyst Pharmaceuticals (CPRX)
Catalyst Pharmaceuticals (CPRX) is the one stock that many investors might not know of or fancy. Maybe is the riskiest stock on the Robinhood list today. Catalyst Pharmaceuticals is a profitable small biotech company that’s profitable and is growing its revenue slowly.
Catalyst’s once approved drug, for a rare autoimmune disease known as Lambert-Eaton myasthenic syndrome, made only $30.2 million in the first quarter. That’s merely an increase of 3.7% year over year. It’s improving and the reason we’ve chosen this stock is that there’s more to the company than that one drug.
Catalyst’s management plans to uplift its research and development spending this year. The company is also looking to acquire other promising small biotechs as well. This is an indicator that things could turn for good for Catalyst Pharmaceuticals stock.
In simple words, Catalyst’s growth prospects and its financial performance can change. And when those things do change, the market’s valuation of the stock will, too.