The coronavirus pandemic and the market dynamics that followed infused huge changes in financial markets all over the world. One of the biggest such changes was the rise of retail investors. Flushed with disposable income and having access to platforms like Reddit, Robinhood, Stock Twits and social media in general, individual investors launched bets and showed their power by banding together to buy stocks shorted by hedge funds. Soon, retail investors became a power to reckon with, and played a key role in the overall movements of stock markets. Today, notable investment firms and institutional investors pay attention to what retail investors are up to. An important factor noted in the retail investor space is that most of these investors are young. These investors, equipped with the right set of tools and education, could make a huge mark in the stock markets. A World Economic Forum report says that about 70% of retail investors in a 2022 survey were under 45. The report said that a whopping 74% of retail investors say that they would likely invest more if they had more opportunities to learn about investing. Another important data point says that 55% of retail investors learned about investing after entering the job market, while less than 10% of them learned about investing in early schooling.
One of the latest and noteworthy moves by retail investors came after the SVB collapse. Surprisingly they piled into shares of large banks as small banks started to falter and Americans began to move their cash away from small banks to larger banks. According to data from VandaTrack, during the five-day period ending March 16, retail investors bought about $1 billion worth of stocks of major banks including Bank of America, Charles Schwab, Citigroup. Wells Fargo and JPMorgan.
It seems retail investors are big into buy-the-dip strategies. Data from Bank of America shows that retail investors bought the dip in January, which was one of the worst since the financial crisis. On the other hand, institutional investors sold off assets during the month.
Talking to Yahoo Finance, Interactive Brokers chief strategist Steve Sosnick said the following on this trend:
"'Buy the dip' has been a strategy that's worked since there have been markets. You know, a lot of investors have been trained to realize that buying the dip works."
Another important trend seen gaining traction among retail investors is index investing. According to an FTSE Russell report:
“Our survey indicates that the multi-year shift to index-based strategies looks set to continue in 2023, with a high rate of net ETF inflows. That contrasts with conventional wisdom that index strategies prosper in buoyant but not turbulent markets. Suggesting that 2023 will be another year of investors favoring index-based strategies, nearly four in ten (38%) U.S. retail investors who hold indexes plan to add to their investments in these strategies.”
Most Popular Retail Investor Stocks in 2023
Photo by Chris Liverani on Unsplash
Our Methodology
For this article we used the Robinhood Investor Index to see what are the most popular retail investor stocks in 2023. The Robinhood Investor Index, launched in 2022, is designed to track the performance of the 100 investments most popular among its user base. As Robinhood has over 11 million monthly active users, it’s perhaps the best platform the find out which stocks are popular among retail investors. The Robinhood Investor Index shows the 10 most popular stocks on the platform, so we took two additional stocks for this list by scouring the Wall Street Bets subreddit and picking two stocks that were the most talked about (with positive sentiment) over the past few days through April 17. To give you hedge fund sentiment for these stocks well, we mentioned the number of hedge fund investors for each of these stocks.
GameStop Corp. (NYSE:GME) shares have gained about 30% year to date. Most of these gains came in March after GameStop Corp. (NYSE:GME) posted strong Q4 results, crushing analyst estimates. GAAP EPS in the fourth quarter came in at $0.16, beating estimates by $0.29. Revenue in the period totaled $2.23 billion, beating estimates by $50 million.
As of the end of the fourth quarter of 2022, 14 hedge funds tracked by Insider Monkey were bullish on GameStop Corp. (NYSE:GME). The biggest hedge fund stakeholder of GameStop Corp. (NYSE:GME) was Kenneth Mario Garschina’s Mason Capital Management which owns a $21 million stake in the company.
Shares of AI company C3.ai, Inc. (NYSE:AI) have gained 100% in value in 2023 through April 17 because of the AI mania that started this year on the back of the ChatGPT launch. It is one of the most popular retail investor stocks in 2023. However, C3.ai, Inc. (NYSE:AI) lost value after a short report by Kerrisdale Capital alleged accounting issues at the company. C3.ai, Inc. (NYSE:AI) could also be a short squeeze target in the future if Redditors band together and pile into this stock in the coming weeks.
A total of 19 hedge funds tracked by Insider Monkey had stakes in C3.ai, Inc. (NYSE:AI). The total value of these stakes was $57 million. The biggest stakeholder of C3.ai, Inc. (NYSE:AI) is Ken Griffin’s Citadel Investment Group which owns an $11.7 million stake in the company.
Kerrisdale Capital made the following comment about C3.ai, Inc. (NYSE:AI) in the investor letter:
“We are short shares of C3.ai, Inc. (NYSE:AI), a $4 billion market capitalization enterprise software company that has risen from the ashes of its busted IPO based on the misconception that its self-proclaimed “AI leadership” somehow positions it to benefit from Silicon Valley’s current tech theme du jour: generative AI as represented by media obsession ChatGPT. We believe these speculative flames won’t burn bright much longer, as the realities of C3’s poor customer traction, failing sales partnerships, and financial pressures will catalyze what is likely to be a painful reality check.
In February, AMC Entertainment Holdings, Inc. (NYSE:AMC), which was once a darling of Reddit’s WSB bets and still remains one of the most popular stocks among retail investors, posted its Q4 results that crushed analyst estimates. Adjusted EPS in the period came in at -$0.14, beating estimates by $0.08. Revenue in the quarter decreased by about 15.3% year over year to $990.9 million, beating estimates by $13.24 million.
Hedge fund sentiment for AMC Entertainment Holdings, Inc. (NYSE:AMC) increased in the fourth quarter, as 23 hedge funds in Insider Monkey’s database reported owning stakes in AMC Entertainment Holdings, Inc. (NYSE:AMC) at the end of the period, up from 17 hedge funds at the end of the previous quarter.
NIO Inc. (NYSE:NIO) remains one of the top 10 investments of retail investors on Robinhood, according to Robinhood Investor Index. In March, it was reported that the Chinese EV company had started testing faster and more efficient battery swapping stations in China.
As of the end of the last quarter of 2022, 25 out of 943 hedge funds tracked by Insider Monkey had stakes in NIO Inc. (NYSE:NIO). The net worth of these hedge fund stakes was about $380 billion. The most notable hedge fund stakeholder of NIO Inc. (NYSE:NIO) is Jos Shaver’s Electron Capital Partners which owns a $61 million stake in the company.
Ford Motor Company (NYSE:F) shares rose earlier this month after the company posted upbeat sales data for the first quarter. Trucks and vans sales came in at 254,000, up about 19% from the year-ago period. Importantly, Ford Motor Company (NYSE:F)’s EV sales jumped 40% in the quarter.
Ford Motor Company (NYSE:F) is also a dividend-paying stock with a decent yield. Recently, Ford Motor Company (NYSE:F) declared a quarterly dividend of $0.15 per share. Forward dividend yield came in at over 4.8%.
As of the end of the fourth quarter of 2022, 40 hedge funds tracked by Insider Monkey had stakes in Ford Motor Company (NYSE:F). The most notable hedge fund stakeholder of Ford Motor Company (NYSE:F) during this period was Ken Griffin’s Citadel Investment Group which has a $204 million stake in the company.
Here is what Leaven Partners has to say about Ford Motor Company (NYSE:F) in its Q3 2022 investor letter:
“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Ford (NYSE:F), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”
Retail investors on Reddit, Robinhood, and other internet platforms have been enthusiastic about Tesla, Inc. (NASDAQ:TSLA) because of their liking for Elon Musk, the company’s cool products and the overall potential of the company. Hedge funds share this enthusiasm. Insider Monkey’s proprietary database of 943 hedge funds shows that 91 hedge funds tracked by Insider Monkey had stakes in Tesla, Inc. (NASDAQ:TSLA). The total worth of these hedge fund stakes was about $5.9 billion. The most notable hedge fund stakeholder of Tesla, Inc. (NASDAQ:TSLA) during this period was Ken Griffin of Citadel which had a $926 million stake in the company.
Earlier this month, Tesla, Inc. (NASDAQ:TSLA) reportedly cut prices on all U.S. models.
The Walt Disney Company (NYSE:DIS) shares have been on a roll since Bob Iger came back to the top seat. The Walt Disney Company (NYSE:DIS) is up about 12% year to date through April 17. Recently, BofA increased its estimates for The Walt Disney Company (NYSE:DIS) for the second quarter and praised Bob Iger’s initiatives to turn the company around. BofA analyst Jessica Reif Ehrlich likes Iger’s cost-cutting plans and his efforts to give control to creative execs, among other steps. The analyst increased The Walt Disney Company (NYSE:DIS)’s revenue estimate for the second quarter of 2023 to $21.6 billion and also upped operating income expectations to $3.0 billion.
The Walt Disney Company (NYSE:DIS) ranks 6th in our list of the most popular retail investor stocks in 2023.
As of the end of the fourth quarter of 2022, 99 hedge funds tracked by Insider Monkey have stakes in The Walt Disney Company (NYSE:DIS).
VGI Partners made the following comment about The Walt Disney Company (NYSE:DIS) in its 2022 annual investor letter:
“The Walt Disney Company (NYSE:DIS) is a diversified media conglomerate operating media networks, theme parks, film and TV studios and direct-to-consumer streaming services. It is the global leader in theme parks with hotels and cruise lines aimed at families. Key assets within Disney are the instantly recognisable entertainment franchises that have multiple avenues of monetisation such as Mickey Mouse, Star Wars, ABC and Marvel’s Avengers.
