WallStreetBets Stock Tips September Week 4 Roundup

Reddit group WallStreetBets has been in the limelight for triggering short squeezes in several stocks. While the group has been a lot less lethal of late, it is still a force to reckon with. Here are the top five WallStreetBets stocks that look good buys in the fourth week of September.

Thanks to Reddit traders, shorting stocks, which was always a risky strategy, has become even riskier. The group has especially pumped stocks with short interest which then leads to squeezes on collective buying.

1. ContextLogic (NYSE: WISH)

ContextLogic has been a favorite WallStreetBets stock for quite some time now. WISH went public last year pricing the shares at $24. However, the stock currently trades at only about a quarter of the IPO price. Last month, the e-commerce company fell to its all-time lows amid dismal earnings and guidance. However, after the crash, Reddit traders saw an opportunity in the stock.

WISH is a good WallStreetBets stock to buy for the long term

To be sure, WISH faces several headwinds in the near term. However, the company is taking measures to address the perennial losses and is now looking at consolidation rather than chasing growth at any cost. These measures would pay off in the long term. If you are looking at holding WISH for the long term, it looks among the best WallStreetBets stock to buy.

Wall Street is not too bullish on the stock though and it has only three buy ratings. Six analysts rate the stock as a hold while two have a sell rating. The stock’s median target price of $8 implies a 30% upside over the next 12 months. The street low target price of $5 is a discount of 18.6%. However, the street high target price of $19 would mean the stock more than tripling from these levels.

The stock is available at an NTM (next-12 months) EV (enterprise value)-to-revenue multiple of only about 1.2x which looks attractive. Overall, WISH looks like a reasonably valued WallStreetBets stock to buy.

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2. SoFi (NYSE: SOFI)

SoFi is another good WallStreetBets stock to buy. SOFI is a fintech company that went public through a SPAC reverse merger earlier this year. The stock was previously also popular on Reddit groups which took it to record highs but it subsequently tumbled. The stock has again been getting popular on social media groups and looks like a good WallStreetBets stock to buy.

Jefferies is also bullish on SOFI stock

Earlier this week, Jefferies issued a bullish note on SOFI stock and initiated coverage with a buy rating and $25 target price. “We believe that ‘Flywheel’, SoFi’s synergistic business model, will continue to drive significant user growth, product adoption, and margin expansion. SoFi has also made progress on obtaining a bank charter – all of which should support attractive long-term growth,” said Jefferies analysts in their note.

Fintech revolution makes SOFI a good WallStreetBets stock to buy

The fintech revolution where noebanks like SOFI are snatching market share from traditional banks makes fintech companies attractive. SOFI is also expected to get a bank charter which will drive long-term growth.

“Synergies between SoFi and Galileo present a unique value proposition beyond vertical integration. Consolidation between the two present marketing efficiencies that result in significant cross-selling opportunities between the customer base of both companies as SoFi will be able to serve both a B2B and B2C customers,” said Jefferies in its note.

SOFI’s valuations look reasonable considering the string topline growth that it has forecasted. The company’s diversified business model makes it among the best WallStreetBets stock to buy.

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3. Cleveland-Cliffs (NYSE: CLF)

Cleveland-Cliffs is current a popular WallStreetBets stock. The company is an integrated steel company having both steel and iron ore operations. The stock has come off its 2021 highs as global seaborne iron ore prices have plummeted amid China’s steel production cuts. Also, the Evergrande crisis has led to a fall in all metals and mining stocks.

CLF is a good WallStreetBets stock to buy and play the infrastructure theme

The Biden administration has pledged billions of dollars towards developing physical infrastructures like roads and bridges. This would lead to higher demand for steel in the US and bodes well for domestic companies like CLF. If you want to play the infrastructure theme, CLF looks among the best WallStreetBets stocks to buy.

Steel companies are making record profits

US steel companies like CLF are making record profits amid the multi-year high steel prices. CLF has been using its cash flows to pay its debt and expects to become net debt neutral by next year. The deleveraging would help support the company’s valuation multiples over the long term.

Meanwhile, if China’s Evergrande were to collapse, it could lead to a steep fall in all metal and mining names including CLF. However, for now, a complete collapse of Evergrande does not look like a realistic assumption given its consequences for the Chinese economy. With an NTM PE of only about 3X, CLF looks like a good WallStreetBets stock to buy at these prices.

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4. Canoo (NYSE: GOEV)

Canoo is another good WallStreetBets stock. The company is a startup electric vehicle company and intends to begin the deliveries of its first lifestyle model by the end of the next year. Last month, it had released its second-quarter earnings. It posted an adjusted EBITDA loss of $76.7 million which was wider than the $17.7 million that it posted in the corresponding period of 2020. The company reported negative operating cash flows of $108.8 million and ended the quarter with $563.6 million of cash. It meanwhile said that it has received 9,500 non-binding orders for its vehicles.

Canoo is a good EV stock to buy

At the investors’ day earlier this year, Canoo tried to pitch itself as a long-term investment. “We’re in it for the long run. I’m in it for the long run,” said its CEO Tony Aquila at the event. Notably, Aquila has added to his stake in the company.

Meanwhile, Wall Street, as well as the markets, are not too optimistic on GOEV stock. While Bank of America analyst John Murphy called the event “as relatively constructive,” he added, “We remain a bit hesitant as the company still has no binding orders and its business model still appears to be evolving.”

All said, Canoo has a differentiated approach and is coming up with a highly versatile skateboard chassis. If you are looking at a reasonably priced electric vehicle stock with a strong growth outlook, GOEV would be among the WallStreetBets stock that would interest you. While analysts have a mixed forecast for the stock, its median target price implies an upside of over 67% from these levels.

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5. Nike (NYSE: NKE)

Nike stock is also trending on WallStreetBets after its quarterly earnings. The company lowered its sales outlook for the fiscal year 2022. Like many of the US companies, Nike is battling with supply chain issues, which in its case have been compounded by the COVID-19 situation in Vietnam. The company sources a lot of products from Vietnam and the shutdown of factories in the country has taken a toll on its supply chain.

To be sure, Nike stock had fallen before the earnings release also as the market was expecting supply chain issues to take a toll on its earnings. “Over its history, Nike’s stock has been most tightly correlated with sales growth, so with growing evidence that sales will likely stall, we believe Nike’s stock will at best tread water until more clarity is had around its manufacturing issues,” BTIG analyst Camilo Lyon had said before the earnings release.

WallStreetBets thinks issues are priced in Nike stock

A lot of WallStreetBets members think that the supply chain issues with Nike were known beforehand and were priced in. Wall Street analysts have a bullish forecast for Nike stock. Of the 29 analysts covering NKE, 24 rate it as a buy or equivalent while four rate it as a hold. One analyst has a sell rating on the stock. NKE stock has a median target price of $185 which is a 16% upside over current prices. Its street high target price is $221 which is a premium of 38.6% over current prices. The stock looks set to fall below the street low target price of $157 today.

Meanwhile, the supply chain issues are a short-term bottleneck for Nike and the long-term growth trajectory looks intact. Given its strong brand and reasonable valuations, Nike looks among the best WallStreetBets stocks to buy in September.

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