Best WallStreetBets Stocks to Buy December Week 1 Roundup

This week, we’ve seen some new entrants in the WallStreetBets “hall of fame.” The Reddit group is notorious for pumping several stocks where retail traders act as a cohort to squeeze out short-sellers.

Not all WallStreetBets stocks are the typical meme names and some of them look good buys. Here are the five best WallStreetBets stocks that you can buy in the first week of December.

1. DocuSign (NYSE: DOCU)

DOCU is currently the most popular stock on WallStreetBets. DocuSign stock has been weak in 2021, like other “stay-at-home” stocks. The company is witnessing slowing growth and has forecast a 30% increase in sales for the current quarter. Prior to that, its revenues have increased in excess of 40% for six straight quarters. Meanwhile, investors have given a thumbs down to the company’s guidance and the stock looks set to hit a new 52-week low today.

WallStreetBets likes DocuSign despite tepid guidance

Some WallStreetBets members like DOCU stock despite the sales miss. Notably, after the crash today, the company’s valuations would drift closer to its pre-pandemic valuations. Meanwhile, as expected several analysts have lowered DocuSign’s target price after the earnings release.

“The pandemic tailwinds came to a much faster than expected halt for DocuSign, catching the company off guard. … Sales now needs to pivot from a focus on demand fulfillment to demand generation, and we think that this will take a couple of quarters to play out,” said JPMorgan analyst Sterling Auty. Auty believes that the company’s sales growth could be lower in the first half of the next fiscal year also. Some of the other brokerages including UBS, Piper Sandler, and Wedbush also downgraded the stock.

Meanwhile, after the crash, DOCU looks like a good stock to buy considering the massive market opportunity. While Wall Street analysts have become bearish on the stock after the earnings release, it nonetheless looks like a good WallStreetBets stock to buy in December.

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2. Alibaba (NYSE: BABA)

Alibaba stock has been a long-time favorite stock of WallStreetBets members. However, its price action has disappointed Wall Street analysts as well as WallStreetBets. The stock hit a new 52-week low yesterday and might hit a new low today as Chinese stocks plunge following reports of Didi getting delisted. There are fears that Alibaba might also get delisted in the US as it is structured as a variable interest entity, something that both China as well as the US SEC are now skeptical of.

WallStreetBets members are not too perturbed

Meanwhile, WallStreetBets members are not too perturbed with the feared delisting and see massive value in Alibaba stock. It trades at a significant discount to global e-commerce companies. Notably, fund managers have a mixed opinion over BABA stock. Cathie Wood of ARK Invest exited the stock sometime back and even famed investor Mohnish Pabrai has sold BABA shares. However, Charlie Munger has added more BABA shares.

Now, Ashwath Damodaran, who’s known as the “dean of valuation” has also said that he’s now ready to buy BABA stock. He said “At the prices at which it’s trading, I think not withstanding all the worries about corporate governance and the Chinese government, I think it’s well positioned to be a long-term investment. He called BABA a solid company and said that he likes the stock as a long-term investment.

Indeed, while BABA stock could be volatile in the short term amid the noise over delisting as well as slowing growth in China, it looks among the best stocks to buy for the long term. For a change, both Damodaran and WallStreetBets see value in one stock. If you are comfortable holding BABA stock for a decade, it looks like a compelling buy at these prices.

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3. NIO (NYSE: NIO)

NIO stock is also under pressure amid delisting fears. It is also structured as a variable interest entity like BABA. Meanwhile, NIO stock has underperformed other EV stocks by a wide margin this year and both WallStreetBets, as well as Wall Street analysts, expect it to bounce back. The upcoming NIO day could be another catalyst to take NIO stock higher.

WallStreetBets is bullish on NIO ahead of the investors’ day

WallStreetBets members are bullish on NIO ahead of the investors’ day. Yesterday, Morgan Stanley also issued a bullish note on NIO stock. It said, “The stock has lagged peers YTD as growth stalled on the component crunch, plant restructuring and no new products. However, it’s time to turn the page — a superior ecosystem, broadening customer and distinct branding make the setup unique and favorable for NIO to gather strength into 2022.”

Some of the other brokerages like Goldman Sachs and Citi have also issued bullish notes on NIO stock over the last two months. EV stocks have long been favorites of WallStreetBets members and currently, both Tesla and NIO are top trending names on the group. If you are looking to buy an EV stock that WallStreetBets also loves, NIO would fit the bill. The stock’s valuations also look reasonable when compared with other EV names.

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4. Robinhood (NYSE: HOOD)

Robinhood is another popular name on WallStreetBets. Many of the traders on the group trade on the Robinhood platform only. While Robinhood irked many retail traders by blocking trading in meme names earlier this year, WallStreetBets members triggered a short squeeze in the stock after its listing. Currently, the stock trades near its 52-week lows and is down sharply from the IPO price.

WallStreetBets members were irked by Robinhood

Some of the Wall Street analysts also turned bearish on HOOD stock after it missed earnings estimates in the third quarter and its revenues and users fell on a quarterly basis. The guidance for the fourth quarter also looked depressing. However, the company is working on long-term growth and is expected to add more cryptos as well as services like staking and lending on the platform.

Cathie Wood of ARK Invest has also been adding more HOOD shares amid the crash. Tesla, which is a popular WallStreetBets stock, is the biggest holding for ARK Invest.

Meanwhile, HOOD stock looks reasonably valued after the fall even as its growth in the short-term would be tepid. At these prices, it looks like a WallStreetBets stock worth having in your portfolio.

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5. Disney (NYSE: DIS)

Disney has also been popular on WallStreetBets for quite some time now. The stock has been weak this year amid concerns over slowing growth in its streaming service. The emergence of the omicron variant has also put pressure on DIS stock. However, the growth slowdown in the streaming business looks momentary and growth should pick up next year as the company adds more content.

DIS is a WallStreetBets stock worth buying

DIS stock is trading near its 52-week lows. While there are valid concerns over the Omicron variant hurting its Parks segment, the valuations look reasonable at these prices. The stock looks a good buy at these prices, especially for long-term investors.

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