While it’s great to see young people using time as leverage to invest in their futures, it’s also puzzling that Robinhood hasn’t given these millennial and newbie investors the tools to truly succeed. Many do not understand the importance of long term investing or capitalization, and have instead chosen to chase penny stocks or otherwise terrible companies.
Still, you might be surprised to learn that some of the most widely held Robinhood stocks were bought hand-in-hand by billionaire fund managers in the third quarter. Here are four of the most sought after Robinhood stocks in Q3.
This is not a joke. Chronic underperforming marijuana stock Cannabis Aurora (NYSE: ACB) was a popular buy among 13F filers in the third quarter and among a handful of billionaire fund managers. Renaissance Technologies of Jim Simons opened a position of 447,378 shares during the quarter, with Citadel Advisors of Ken Griffin adding 418,994 shares to an existing position.
Despite having once been the most held title on the Robinhood platform, Aurora has been a train wreck, which makes these billionaire buys so surprising. It is a company that has been ravaged by regulatory problems at the federal and provincial levels in Canada, as well as by the overzealousness of its former management team. Aurora Cannabis significantly overestimated its capacity requirements and overpaid its acquisitions by a considerable amount. The Canadian net loss of $ 3.3 billion last year was mainly due to write-downs related to overvalued buybacks and excess capacity.
Aurora Cannabis has also shown little desire to do what’s best for shareholders. Between June 2014 and October 2020, the number of outstanding shares in the company increased by more than 11,800%, as the company’s board of directors recently approved a market offer of $ 500 million (US) to raise capital whenever it sees fit. It drowns its shareholders in dilution and is not even a lock to survive at this point.
Although it did not become a publicly traded company until the last day of the third quarter, 13F filings show that the data mining company Technologies Palantir (NYSE: PLTR) was a hot buy among 13F depositors and some billionaires. Steven Cohen’s Point72 Asset Management gobbled up 29.9 million shares, with Larry Fink Black rock and Soros Fund Management, led by George Soros, with 29.3 million and 18.5 million shares, respectively.
The appeal of Palantir is twofold. First, it opted for a direct listing instead of a traditional initial public offering. Without the investment banks that stepped aside, Palantir’s initial valuation did not explode in the stratosphere. This has allowed fund managers and retail investors to build up a position at a somewhat reasonable valuation.
The other factor that has excited investors is the accelerating growth of Palantir amid the pandemic. Providing its data mining and analytics services to the federal government through its Gotham platform is certainly lucrative. Yet it is Palantir’s opportunity with corporate clients through the Foundry platform that will be the longer-term and more secure engine of growth. Investors should expect double-digit annual sales growth for a long time.
Connect the power
Another billionaire stock marketer couldn’t stop buying in the third quarter was the provider of hydrogen fuel cell solutions Connect the power (NASDAQ: PLUG). In total, 13F depositors increased their stake in Plug Power by more than 18% in the third quarter, with BlackRock’s Larry Fink taking the largest share with an additional 7.63 million shares.
Concerns about climate change are driving a renewable energy revolution that goes far beyond large-scale electric utilities. Plug Power supplies its hydrogen powered technology mobility solutions (eg forklifts) to a number of branded retailers and grocers. This drive to go green, coupled with the 2019 coronavirus disease pandemic (COVID-19), which is dramatically increasing demand for many of Plug Power’s major customers, has led to a record year. Plug’s annual forecast implies annual sales growth of around 35%.
In addition, Plug Power wisely locked some of its most important customers with warranty contracts. In 2017, Amazone (NASDAQ: AMZN) has obtained warrants to acquire up to 55.3 million shares of Plug, these warrants being acquired on the basis of Amazon’s orders for Plug’s fuel cell and hydrogen technology. Given that Plug Power’s stock has skyrocketed since this announcement, Amazon has a full incentive to exercise these warrants and continue to deepen its relationship with Plug.
Although still years after recurring profitability, the Plug Power renewable energy stock is definitely grabbing the attention of Wall Street.
Fourth and finally, billionaire investors and high-value fund managers have been intrigued by Software as a Service (SaaS) stocks. Technologies Slack (NYSE: WORK). In total, 13F depositors added more than 50 million net Slack shares to their portfolios in the third quarter, with Larry Fink’s BlackRock increasing his position by 6.65 million shares.
The Slack buying thesis is built on the same premise that drove SaaS actions for much of 2020: Businesses are increasingly dynamic and remote, so technology in the workplace needs to grow. adapt to quickly share information. Slack is designed to be that trusted inter-company collaborative service. During the quarter ended in July, it added approximately 8,000 new net paying customers and counted 87 paying customers with north of $ 1 million in annual recurring revenue.
But Slack also competes with certain powers. Microsoftfrom (NASDAQ: MSFT) Communication platform for teams and Focus on video communications (NASDAQ: ZM) have really kept Slack’s valuation at bay. Microsoft’s deep pockets and branding, along with Zoom’s seemingly exponential video growth, have raised doubts about Slack’s ability to compete and retain customers. Then again, with Zoom focused on video and Microsoft working on more projects than I can count, it’s also possible that Slack has the advantage of becoming the go-to collaborative service (maybe not on the video side). At work.
It is certainly a stock to watch closely.