Wallstreetbets Crypto and Stock Tips – Weekly Reddit Roundup

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Reddit group WallStreetBets has been instrumental in pumping several stocks. Some of these like AMC Entertainment and GameStop are the usual meme names with questionable fundamentals and sky-high valuations.

However, some of the WallStreetBets stocks are fundamentally strong companies where even Wall Street analysts see upside potential. Here are the five such stocks that you can consider buying this week.

Wallstreetbets Next Target – Alibaba: (NYSE: BABA)

Alibaba is another popular WallStreetBets stock. It has underperformed tech peers by a wide margin over the last year. China’s crackdown on the company after its co-founder Jack Ma’s critical comments on the country’s financial regulators dampened sentiments. When things were stabilizing, the country launched a probe into recently listed Didi Global which led to a further sell-off in BABA and other Chinese tech companies. That said, BABA looks like a good WallStreetBets stock to buy now.

BABA is an attractive WallStreetBets stock to buy

Alibaba stock trades at an NTM (next-12 months) PE multiple of 21.5x which is not far away from its all-time low of 19x. Since the stock went public the NTM PE multiple has averaged 28x. The multiples are almost a third of what US e-commerce giant Amazon trades at. Even Amazon stock’s valuation multiples are currently near record lows. While Alibaba’s earnings are expected to rise, the stock has been trading flat since it peaked in the third quarter of 2020

Analysts expect Alibaba’s revenues to rise 30% in the current fiscal year which would end in March 2022. Its revenues are expected to rise 21% in the next fiscal year. The company’s net income is expected to be flat this fiscal year as it agreed to pay a $2.8 billion fine to the Chinese government. However, its net income is expected to rise 25% in the next fiscal year.

Looking at the technicals, BABA is facing strong resistance at the 50-day SMA which is currently at $215.43. If the stock breaks above the level it could then approach the 100-day SMA.

While China’s crackdown on tech companies is negative for BABA, it nonetheless looks like a good WallStreetBets stock to buy in July and bet on China’s e-commerce market.

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Next Wallstreetbets Target – ContextLogic (NYSE: WISH)

ContextLogic is another popular WallStreetBets stock. The company is an e-commerce platform and went public last year pricing the shares at $24. The stock now trades below $10. Recently, the company’s CFO Rajat Bahri said that he would resign on July 23. The news triggered a selling spree in the stock as it came amid the Reddit-driven rally.

wish wallstreetbets stock

While the company clarified that the exit is not related to any disagreement between the two parties, the markets were apparently not convinced. Meanwhile, WISH looks like a good WallStreetBets stock to buy now considering its low valuations. It trades at an NTM EV (enterprise value)-to-sales multiple of 1.33x which looks quite attractive and is way below other e-commerce stocks.

WISH looks like a good WallStreetBets stock to buy

Looking at the technical indicators, WISH stock has faced resistance at the 100-day SMA and 50-day SMA. It currently trades below both these levels. However, it is now getting near the oversold zone with a 14-day RSI of 37.

Wall Street analysts are also bullish on this WallStreetBets stock and its median target price of $19 implies a 94% upside over the next 12 months. The stock has eight buys and three hold ratings. Overall, WISH looks like an attractively priced WallStreetBets stock to buy in July.

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3. SoFi (NYSE: SOFI)

Social Finance went public earlier this year through a SPAC (special purpose acquisition company merger). It’s a fintech name and offers products ranging from student loans, mortgages, credit cards, stock trading, and cryptocurrency trading. The company is also expected to get a bank charter which will help uplift sentiments.

SOFI stock is down sharply from its highs but it looks like a good WallStreetBets stock to buy in July. The outlook for the fintech industry is positive and companies like SOFI are in a prime position to capitalize on the trend. The company has turned positive on the adjusted EBITDA level and should continue to report incrementally better earnings.

Wall Street analysts are also bullish on the stock and both the analysts covering it have rated it as a buy. While Oppenheimer has a target price of $25, last month Rosenblatt Securities initiated coverage on SoFi with a buy rating and $30 target price. Its median target price of $27.50 is a premium of 77% over current prices.

SoFi is a WallStreetBets stock to buy for the long term

Sounding a positive note on fintech companies, Rosenblatt analyst Sean Horgan said “The incumbent legacy banks face a challenging road ahead as a new wave of digitally native and mobile-first banks rush into the market.” Commenting on SoFi he said, “But for now, challenger banks face a ‘jump ball’ opportunity to seize market share from the old guard … and SOFI is well-positioned to capture a significant amount of the value hanging in the balance.”

From a valuation perspective also, SoFi looks attractive. If you are looking at a fintech stock to hold for the long run, this WallStreetBets stock will fit the bill.

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4. Cleveland-Cliffs (NYSE: CLF)

CLF is the only steel company that’s popular on WallStreetBets. US steel prices are trading near their all-time highs which have helped trigger a rally in CLF and other steel names. While CLF is a WallStreetBets stock is a fundamentally strong company with a good management team.

CLF was an iron ore miner but went for vertical integration by acquiring AK Steel in 2019. Last year, it also acquired the US operations of ArcelorMittal. In June it raised its earnings guidance and said that it expects to post an adjusted EBITDA of $5 billion in 2021 and $1.3 billion in the second quarter. From a valuation perspective, CLF stock trades at an NTM PE multiple of only 3.1x and looks quite attractive at these prices.

CLF looks like a good WallStreetBets stock

CLF sells most of its steel to automotive customers and will benefit from the expected uptick in US automotive production in the second half of the year. The vehicle production in the first half took a hit due to the global chip shortage with Ford being the worst affected. America’s second-largest automaker expects to lose half of its production in the second quarter due to the chip shortage. However, things are expected to get better in the second half of the year.

CLF stock trades above the 50-day SMA and the 200-day SMA which is a bullish indicator. While the stock has fallen from its highs, it has found strong support at the 50-day SMA.

In the medium term, Biden’s infrastructure plans and the continued strength of the US automotive industry will help propel the demand for this WallStreetBets stock. CLF is a good way to play the momentum in US steel prices.

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Finally, with Wallstreetbets Reddit – Apple (NYSE: AAPL)

apple wallstreetbets stock

Apple is the largest company by market capitalization on the planet and was the best performing FAANG stock in 2019 and 2020. Yesterday, the stock rose to its record highs on reports that it intends to ramp up iPhone production but is still underperforming FAANG peers this year.

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Apple is not exactly a WallStreetBets stock

To be sure, Apple is not exactly a WallStreetBets stock nor could the group use collective buying to pump up the stock considering its mammoth size. Reddit traders have been successful in triggering a short squeeze in many stocks but Apple wouldn’t fit the category. However, currently, the stock is the top discussion topic in the group.

Looking at the technicals, Apple stock has crossed above all the moving averages after scaling an all-time high. The 14-day RSI (relative strength index) meanwhile indicates that it is oversold. The valuations look reasonable with an NTM (next-12 months) PE multiple of 29x. It’s the largest holding for Berkshire Hathaway and can be a core holding for retail investors. In the medium term, Apple is a play on the iPhone supercycle and the pivot towards 5G. In the long term, it will benefit from the growing services revenues and the foray into electric cars.

Wall Street analysts see another 7% upside in Apple stock over the next 12 months and the stock could see upgrades post its quarterly earnings release later this month. Yesterday, JPMorgan analyst Samik Chatterjee raised his target price on Apple stock by $5 to $175.

Good WallStreetBets stocks to buy

“The combination of upside from iPhone 13, stemming from a better upgrade rate to 5G devices and a larger installed base, as well as upside from the launch of iPhone SE3 in calendar 2022 could set Apple up for an earnings upgrade cycle over the next 6-12 months,” Chatterjee said in his note. If you are looking at a fundamentally strong WallStreetBets stock with a lower risk profile, Apple stock will perfectly fit the bill.

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About Mohit PRO INVESTOR

Mohit Oberoi is a freelance finance writer based in India. He has completed his MBA with finance as majors and also holds a CFA charter. He has over 14 years of experience in financial markets. He has been writing extensively on global markets for the last seven years and has written over 7,500 articles. He covers metals, electric vehicles, asset managers, tech stocks, and other macroeconomic news. He also loves writing on personal finance and topics related to valuation.