WallStreetBets Stock Tips October Week 4 Roundup

Every week we bring to you some of the fundamentally strong and reasonably valued stocks that are popular on Reddit group WallStreetBets. Here are the five best WallStreetBets stocks that you can buy in the fourth week of October.

1. ContextLogic (NYSE: WISH)

ContextLogic stock has been a popular WallStreetBets stock. The stock has recovered from its all-time low of $4.61 even as it is still a fraction of its all-time high of $32.85. WISH stock has had a troubled ride as a publicly traded company. To be sure not much has gone right for WISH stock since it was listed.

The company has been posting wider losses and the topline growth turned negative in the second quarter. Also, it disappointed on almost all the operating metrics in the quarter. The abrupt exit of the company’s CFO only added to the pessimism.

However, looking at the strong growth outlook for the e-commerce sector, WISH looks like a good buy. The company is changing its business strategy to focus more on the retention of the existing user base rather than growth. These efforts would only reflect in the company’s performance in the medium to long term.

If you are willing to be patient and not get too perturbed by the short-term volatility, WISH looks like a good WallStreetBets stock to buy in October. With an NTM (next-12 months) EV (enterprise value)-to-sales multiple of around 1.2x, WISH stock looks attractive at these prices.

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2. PayPal (NYSE: PYPL)

PayPal is currently among the popular WallStreetBets stock. The stock fell yesterday on reports that it plans to acquire Pinterest. Meanwhile, Wall Street analysts have a mixed opinion of the deal. Mizuho analyst Dan Dolev is among those who are apprehensive about the transaction.

“We see several potential concerns including unknown degree of user overlap, rapid deceleration in Pinterest user growth in recent quarters, and the deal potentially signaling that PayPal’s organic net new adds in the second half of 2021 may be weaker than hoped,” said Dolev.

However, Deutsche Bank analyst Bryan Keane sounds constructive on the transaction. “Integrating PINS’ experience-based platform into PayPal’s recently rolled out Super App and in-app shopping capabilities through Honey should significantly increase transactions per user,” said Keane. Bank of America also sounded bullish on the transaction and sees cross-selling opportunities for PayPal.

WallStreetBets is talking about the acquisition

WallStreetBets members are also talking about the pros and cons of the acquisition. Notably, the deal would also need to be approved by The US Federal Trade Commission, whose new chair Lina Khan has sounded more hawkish than her predecessor when it comes to the monopolies of tech giants.

All said PayPal is among the best fintech names to hold. The company has also allowed some cryptocurrencies in the US and the UK and could expand crypto transactions further. Wall Street analysts are also bullish on PayPal stock and consensus estimates call for an upside of 34% over the next 12 months.

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3. Disney (NYSE: DIS)

Disney is another popular WallStreetBets stock. It has fallen sharply from its peaks and is now trading with a year-to-date loss even as the US stock markets are near record highs. Last month, the company said that the subscriber growth in the quarter would be low which led to a sell-off. However, the management has reiterated the long-term business forecasts.

WallStreetBets is bullish on Disney’s streaming business

Some WallStreetBets members are bullish on Disney amid the pivot towards streaming. Over the long term, the streaming business would contribute significantly to Disney’s earnings. While the operations are currently posting losses, they are expected to become profitable in the coming years and drive the company’s profitability.

While Disney is not the typical meme stock even as it is popular on WallStreetBets, it looks a good buy both for the short term as well as the long term. In the short term, we’ll see a revival in the company’s earnings led by the Parks segment. For the long-term, streaming would add value.

Overall, Disney looks like a good WallStreetBets stock that should be on your radar in October. With the fall from the peaks, DIS stock looks quite attractive now. Wall Street analysts are also bullish on the stock and its average target price of $215.06 is an upside of almost 25% from these levels.

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4. Crocs (NYSE: CROX)

Crocs stock became popular on WallStreetBets stock after it reported better than expected earnings. The company’s revenues were $626 million in the third quarter which was ahead of the $610 million that analysts were expecting. The company’s EPS of $2.47 was also ahead of the $1.88 that analysts were expecting. It also raised its full-year revenue growth forecast to 62-65% from the previous guidance of 60-65%.

WallStreetBets is impressed with CROX’s earnings

WallStreetBets members seem impressed with CROX’s earnings which are coming at a time when US retailers are grappling with severe supply chain issues. Meanwhile, CROX stock is up over 140% for the year, outperforming most peers. Wall Street analysts see more upside in the stock and its consensus target price of $180 is a premium of 21.7% over current prices.

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5. Cleveland-Cliffs (NYSE: CLF)

CLF is an integrated steel producer. The stock has been a popular WallStreetBets stock for quite some time now. However, while the stock is still up 46% for the year, it has come down sharply from its 52-week highs. There are concerns over the longevity of the steel cycle and some analysts have been downgrading steel stocks.

Most WallStreetBets members are bullish on CLF stock

Meanwhile, most WallStreetBets members have a bullish view of CLF stock. Notably, while steel prices might have peaked, they might not crash from these levels. Also, if Biden’s infrastructure bill gets approved, it would lead to a higher demand for steel in the US. Steel companies are posting record profits and might continue to report stellar results for the next few quarters.

CLF is using the cash flows to deleverage and the company expects to become neutral on the net debt in 2022. This would help support a structural re-rating of CLF stock. The current valuations appear tempting and CLF trades at an NTM PE of only about 2.8x.

While the valuations of commodity companies bottom at the cyclical peaks, CLF looks too cheap to ignore at these prices. If you are looking to buy a steel stock that WallStreetBets also loves, CLF would fit the bill.

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