Top 3 Meme Stocks List for Your Portfolio
If you follow the stock market, you’ve probably heard of the term “meme stock.” And many investors will point to specific companies that you should add to your meme stocks list.
Specifically, a meme stock is a stock that has gone viral with social media popularity. Stocks that are considered meme stocks have seen a recent surge in viral activity, which is usually fueled by online social media platforms such as Reddit and Twitter.
Top 3 Meme Stocks List to Speculate On
Due to internet virality, meme stocks tend to see rapid price spikes. Because of this, the spikes are usually followed by an inevitable crash.
A large portion of these spikes are caused by Reddit forum WallStreetBets. And it’s common for retail investors on these platforms to target stocks that are heavily shorted. They look for stocks with high short percentage of float and look to create “short squeezes” in the process. A “short squeeze” situation can create fast upward movement in a stocks price, as investors who were short look to cover their short positions.
In a thread on the WallStreetBets subreddit, one user explained the meme stock cycle as:
- Early Adopter Phase: Investors who believe a particular stock is undervalued and begin to buy in large quantities. This causes the stock’s price to increase slowly.
- Middle Phase: People who are watching activity notice the increase in volume. More individuals start buying, and the stock’s price skyrockets.
- Late/FOMO Phase: The stock’s momentum begins to trend on social media and online forums. Thus, fear of missing out takes hold and more retail investors join in.
- Profit-Taking Phase: After a few days, buying peaks and the early adopters begin cashing out. Just like the buying phase, the selling phase becomes a chain reaction as people fear losing money. This is where the price goes down.
This user summed up the life cycle of a meme stock pretty well. Early adopters see the largest profit from these trending stocks.
Below is the top three meme stocks list for today’s market. And keep in mind, if you buy these stocks, plan to hold them for a short time. It’s purely a quick-hit, speculative trade.
AMC Entertainment Holdings (NYSE: AMC)
Before this meme stock revolution was even a thing, expert trader Bryan Bottarelli recommended AMC Entertainment Holdings (NYSE: AMC) for $3 a share. He recommended it to his YouTube subscribers, before his new FREE e-letter, Trade of the Day, was created. As a matter of fact, you can check it out below…
AMC has been the talk of the town in online investment communities due to its consistency… and just proves why this is a name to add to your meme stocks list.
GameStop (NYSE: GME)
The continued buzz surrounding GameStop (NYSE: GME) on social media is the main reason this stock is categorized as a meme stock. Even though the company closed 693 stores last year and plans on closing more this year, it’s shares have climbed more than 1,200%. And that’s all thanks to internet hype. Message boards with over 10 million users can generate enough excitement to drive stock prices.
The company is bringing in more goods from overseas, undergoing a transformation, and will be investing in customer service and logistics. And GameStop recently struck a deal with Chewy Inc. co-founder Ryan Cohen, that will add him and two former colleagues to the board – allowing the company to better focus on digital sales.
At the end of this week, the stock will also be moving from the Russell 2000 index to the Russell 1000 and analysts believe this could result in a spike in trading the stock. Even though GameStop has been acting like a short-term trade rather than a longer-term investment, the company continues to use the social media buzz surrounding it as a springboard to keep the momentum going making it a perfect name to add to your meme stocks list.
Tootsie Roll (NYSE: TR)
One name that trading expert Bryan Bottarelli believes has been completely overlooked is Tootsie Roll Industries (NYSE: TR).
Many of you might not have even realized that Tootsie Roll is listed on the stock market. In fact, it became a publicly traded company on the New York Stock Exchange in 1922. Here’s why Bryan believes this stock should be on your meme stocks list…
The Tootsie Roll company has a fascinating history. The company’s factory built engines for B-29 Superfortress bombers in World War II before it became the beloved candy factory we know today.
Tootsie Roll has always remained an independent company. Melvin Gordon, longtime Chairman and CEO, passed away in 2015. This made his wife, Ella Gordon, the new CEO.
Ella has stated many times that her goal is to continue with what has made Tootsie Roll so special to its consumers. Moreover, she has no interest in changing the way Tootsie Roll has been running. She’s content in keeping things consistent due to the company’s success.
For this reason, Tootsie Roll has minded its business, stayed out of the limelight, and currently trades for around $30 a share. Here’s something you might find interesting… recently, 23% of Tootsie Roll shares have been sold short. The fact that no Wall Street analyst covers this company is reason enough why any good news surrounding it could significantly move the shares higher.
And recently, Reddit forum WallStreetBets latched onto Tootsie Roll, pushing the stock up to nearly $50. Just think what could happen if the short squeeze takes hold again. There’s a tremendous amount of value that has yet to be fully unlocked. Definitely add Tootsie Roll to your meme stocks list.
The Meme Stock Craze
Meme stocks have continued to show just how profitable community really is. This “meme trend” is much larger than people realize. Furthermore, it’s the intersection of finance and social media. Online communities have continued to fuel this movement and it’s something that will continue to transform the market.
Trading experts Bryan Bottarelli and Karim Rahemtulla have been discussing meme stocks and other investment opportunities in their FREE e-letter, Trade of the Day. Take the next step in your trading journey by signing up to receive this premium content below!