The hype surrounding meme stocks has died down recently. Yet, with roughly 13.5 million members, Reddit’s r/wallstreetbets community is certainly a force to be reckoned with in the equities market. And while plenty of low-quality stocks have trended on the platform, the best Reddit stocks are the market stalwarts that could get a boost from heightened retail trader interest.
So, whether you’re an avid investor or simply looking to dip your toes into stock trading, Reddit may be the perfect place to start.
|MPW||Medical Properties Trust||$13.72|
Best Reddit Stocks: Nio (NIO)
Nio (NYSE:NIO) is a juggernaut in the Chinese electric vehicle space, the largest EV market in the world. Nio capped off 2022 by reporting December deliveries of 15,815 vehicles, up 51% year over year to a new monthly record. For all of 2022, Nio’s vehicle deliveries were up 34% to 122,486.
This growth is particularly impressive when you consider the challenges the company faced last year, including supply chain issues and Covid-19 lockdowns in China. But with China easing its Covid-19 policies, Nio appears to be putting those issues in the rearview.
The stock got hammered in 2022, with shares falling 69% as investors abandoned growth stocks. However, NIO has shot up 13.5% so far this year on broader market strength. Whether the risk-on trade truly is back remains to be seen, as the market continues to face numerous headwinds. Yet, with the Federal Reserve likely to stop raising interest rates later this year, NIO could experience a snapback rally.
Walt Disney (DIS)
Shares of entertainment powerhouse Walt Disney (NYSE:DIS) have struggled mightily since topping out in March 2021 above $200 a share. They were dragged down in part by the broader bear market and concerns related to inflation and the potential impact of a global recession on travel and its theme park business. However, mounting streaming costs, a big fiscal Q4 earnings miss and political controversy surrounding former CEO Bob Chapek played a large role.
The stock sits nearly 50% below its all-time high, presenting a great opportunity for investors to pick up shares at discount. That’s because DIS has rewarded long-term shareholders handsomely. Even taking into account its recent decline, the stock has gained 354% over the past 20 years, compared with a 268% return for the S&P 500. Shares have also handily outperformed the broader market so far in 2023, rising 19% versus a 1.5% gain for the index.
DIS’ comeback is likely to continue in 2023 for two main reasons. The first is the return of former CEO Bob Iger. Hailed as one of the best CEOs of this millennium, he oversaw numerous successful acquisitions such as Pixar and Marvel. Under Iger’s leadership, there is great potential for long-term growth and increased shareholder returns.
The second reason is that management said the Disney+ streaming service hit “peak losses” of $1.5 billion in the most recently reported quarter. Going forward, losses should narrow as Disney prioritizes income over growth. It’s also worth noting that Disney ended the quarter with a combined total of 235.7 million subscribers across its platforms, including Hulu and ESPN+, beating out Netflix’s (NASDAQ:NFLX) 223.09 million global subscribers.
Best Reddit Stocks: Visa (V)
Visa (NYSE:V) has come a long way since launching its first credit card in 1958. Today, it dominates the credit card business with nearly 4 billion cards in circulation and processing $14 trillion in payments over the 12-month period that ended June 30.
Visa’s continued innovation in the financial services industry has made it a leader in the digital payments space. According to McKinsey & Company, digital payments penetration hit 89% in the United States last year. Furthermore, the global digital payments space is expected to grow at a compound annual rate of 20.5% through 2030.
By keeping up with emerging technology, Visa is positioned to create new customer experiences that can lead to greater convenience and improved security. Moreover, the company’s net profit margin stands at more than 50%, putting it in a prime position to remain profitable despite economic headwinds.
V stock has outperformed the broader market over the past year, up nearly 9% versus an 11% loss for the S&P 500. All in all, it’s clear that Visa is an industry leader with a bright future ahead.
Gartner (NYSE:IT) is a market leader in the provision of research and insights for the technology sector. Its broad portfolio covers cloud computing, enterprise applications and other emerging trends.
With businesses of all sizes turning to digital transformation, Gartner stands poised to capitalize on providing innovative services. Its subscription-based business model has successfully bolstered its income and user base quarter after quarter. The firm has exceeded analyst earnings estimates by a wide margin in each of the past four quarters and revenue has grown by double-digit percentages.
According to Gartner, worldwide IT spending is projected to increase 5.1% this year to hit $4.6 trillion, with demand remaining strong despite continued economic uncertainty.
“Enterprise IT spending is recession-proof as CEOs and CFOs, rather than cutting IT budgets, are increasing spending on digital business initiatives,” said Gartner analyst John-David Lovelock.
Over the past year, IT stock has performed well, rising 21%. The firm and its stock should continue to benefit from the acceleration of digital transformation as companies adopt novel technologies.
Best Reddit Stocks: Alibaba (BABA)
Alibaba (NYSE:BABA) shareholders have had a rough few years since the stock topped out in October 2020, just below $320. Today shares trade for roughly $120 after losing 62% of their value.
During this time, Alibaba’s core e-commerce business stumbled due to slowing cross-border volume, the resurgence of the coronavirus in China and a crackdown by Chinese regulators on the country’s internet giants. On top of that, shares got whacked on fears that the Securities and Exchange Commission might delist BABA and other high-profile U.S.-listed Chinese firms over a failure to comply with U.S. auditing requirements.
Yet, the tide seems to have turned in Alibaba’s favor recently. In early December, China began easing its Covid-19 restrictions. This was followed later in the month by news that the U.S. Public Company Accounting Oversight Board was granted full access to inspect Chinese companies, including Alibaba, thus avoiding delisting. And, in January, it was reported that Alibaba and the government of Hangzhou, the city where the company is headquartered, signed a cooperation agreement amid what looks to be improving relations between Chinese officials and the country’s tech companies.
BABA stock is up 36% so far in 2023 amid renewed investor optimism. Yet, it remains well below its all-time high and could be presenting an attractive entry point for long-term investors who don’t mind the additional volatility that comes with the sector.
Medical Properties Trust (MPW)
Medical Properties Trust (NYSE:MPW) is a health care real estate investment trust with a portfolio of 434 properties across 10 countries worth $21.1 billion, making it one of the largest private owners of hospitals in the world. Its average remaining lease length is 17.6 years.
This is a bit of a contrarian play, as the investment has underperformed the broader market in most timeframes.
Yet, as SeekingAlpha contributor Jussi Askola notes, management has been “taking steps to de-risk the company.” This includes selling some of its properties and approving a share repurchase program worth up to $500 million. Askola also points out that the REIT’s dividend has been rising and “seems well-covered by the company’s AFFO (adjusted funds from operations), which has been growing YoY.”
Currently, Medical Properties Trust pays a quarterly dividend of 29 cents a share for a forward annual yield of 8.5%.
Shares are off to a strong start in 2023, rising more than 23%. Yet, the stock trades with a forward P/E of less than 8, adding to its long-term bull case.
Best Reddit Stocks: Oracle (ORCL)
Software giant Oracle (NYSE:ORCL) held up much better than the majority of the tech sector last year, declining just 6%. And it’s kicked off 2023 with a 7%-plus advance.
The company posted its latest quarterly results in mid-December. Both revenue and earnings exceeded analyst estimates. Despite a tough macroeconomic environment, Oracle still managed to grow revenue by 18% year over year to $12.3 billion. Net income came in at $1.74 billion, while adjusted operating margin of 41% was up from 39% in the previous quarter. Oracle’s resiliency in the current economic climate speaks volumes.
What’s more, the company pays a nice dividend, a rarity in the tech sector. Its 32-cent quarterly dividend translates into a current yield of 1.5%.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.