What Are Robinhood Investors Buying In March?
Every month, the investing platform Robinhood releases the list of top 100 stocks and ETF's that their users are investing in. But why do we care?
Because it's Robinhood! This isn't Charles Schwab or TD Ameritrade, where your grandparents make their responsible, long-term investments. Robinhood is uniquely positioned as "the platform for young retail investors" thanks to its mobile-first build, ease of use and ability to YOLO your life savings into irresponsible options trading. Looking at Robinhood's top stocks each month gives us a view into what the kids are buying. So, without further ado, here are the top 5 stocks on Robinhood for March 2022:
5. Tesla
This one makes sense, right? It's the cool, cutting-edge tech company with the enigmatic leader that produces gaming changing stuff, making them the leader in the category. Did we think it would be a car company? Probably not, but this is one of the OG meme stocks.
The product is solid, and popular. Tesla produces millions of cars per year and generates billions of dollars in profit on their inventory each year, increasing quarter-over-quarter. They are also developing new products, like the Truck, Robot, Semi-truck and battery walls galore. Not to mention their acquisition of Solar City (which is currently being investigated thanks to Musk's ownership of both companies). There's also talk of Tesla launching their own "Tesla Insurance" company, which would be a potential masterstroke. Recent reports also suggest that Tesla is interested in issuing a dividend soon, which is a weird move.
For all of this, however, this company is valued like Gamestop just pulled its head out of a pile of Columbia's finest. At the end of the day, it's still a car company, but it's valued like a SaaS startup with 5 employees that has monthly company retreats to Aspen. For a full write up and my long-term opinion on Tesla, check out my analysis below.
Related: Investing In Tesla - Can It Still Grow?
4. SoFi Technologies
Ah yes, the king of the 2022 NFL postseason. The sponsor of the Inglewood palace that hosted both the NFC Championship and the Super Bowl, SoFi's brand awareness was at an all-time high this winter.
For the uninitiated, SoFi is a bank...kind of. Well, they are now that they received their official federal bank charter, but they're kind of a new-agey bank for millennials. They got started as a student loan debt restructuring company that gradually grew into every single financial tool you could possibly imagine.
They've become the *cool* bank to have for most of their customers, and their customers seem to love them. The average SoFi Customer has more than one product from the company, and that number is accelerating as more customers hop aboard.
On the investing side, they offer tax advantaged accounts, fractional shares, DRIP, crypto and more.
However, the performance of this company since its public market debut has been nothing short of abysmal. This is a good company caught up in the deluge of SPAC nonsense from last year, but investors aren't so quick to notice. I cover the full long-term outlook of the company in my full write-up, which you can find below.
3. SPDR S&P 500 ETF
I want to stop and take this one in for a minute. A few years ago, I don't think that this S&P 500 index fund would be on this list. Too many retail investors on the Robinhood platform were caught up in the frenzy of memestocks like Gamestop and AMC Theaters. Not enough young investors had a long-term mindset, though this seems to have changed over the last few years. Why?
Genuinely, I attribute this to two people: Warren Buffett and Graham Stephan. Hear me out.
Warren Buffett is the first name you probably think of when you think of "investing." He's the man, the myth and the legend. He's also hugely popular with investing social media circles, and his number one edict for beginner investors is to just invest in an index fund and then leave it alone. Why? For that answer, you'll have to check out my piece on his big bet versus a hedge fund.
The other name on the list is Graham Stephan. The infamous finance YouTuber, despite his "sky is falling" thumbnails, actually espouses the benefits of index funds in basically every video. He discusses the benefits of the natural diversification brought about by index funds, and the "set it and forget it" nature of using these to amass long term wealth. For more on Stephan and his work, you can check out his podcast "Millennial Money."
2. Microsoft
This one, along with our number one company this month, are no brainers for pretty much everyone. Microsoft is the gift that keeps on giving. They've figured out how to make a previously single-download disc into a monthly subscription model, and then blasted that model across the entire company.
What used to be your dad's favorite computer manufacturer is now cutting edge, developing direct iPad competitors in the Surface tablet, aggressively jumping into sponsorships like the NFL and are leaders in the cloud storage and computing game. This company PRINTS cash, and it's all thanks to one of the greatest CEO performances of all time when Satya Nadella took over the corner office from Steve Ballmer in 2014.
Nadella took the job with gusto, immediately getting acquisitive. During his watch, he acquired Mojang, the maker of Minecraft when that was still relevant, as well as Xamarin, LinkedIn and GitHub. He's also expanded the "gaming division" (a.k.a Xbox) and reportedly oversaw a sea change in the corporate culture to foster more development from within.
All of this has paid off, with Microsoft growing at a 27% compound annual growth rate since 2014, obliterating the market and nearly everyone in their path, except the next company...
1. Apple
If there's a CEO that gives Nadella a run for his money, it's Apple CEO Tim Cook. Cook was put in the unenviable situation of taking over directly from company co-founder Steve Jobs, who was nearing the end of his battle with cancer in 2011. Since Cook moved into the big chair, however, Apple has experienced its greatest run in the company's history. Coincidence?
Cook has taken Apple from niche computer manufacture with a side project music player into the biggest company in the world. He presided over the iPhone becoming the dominant player in the U.S, the iMac revolution and now the Services and Wearables generation of Apple's income sheet. Cook is directly responsible for a standard 38% gross margin on their products until 2021, when that ludicrous figure jumped to over 40% thanks to dramatic margin increases in the Services division.
Cook has also stockpiled cash, with Apple's reserves now over $200 billion, largely contributing to its $3 trillion market capitalization, a first in human history. He's also dedicating a few bands of that incredible cash reserve to the ever expanding Apple TV+ service, and the results are already starting to show.
The Morning Show, despite being a complete disaster, is raking in users and splashing the cash like nobody's business. They also purchased a small indie movie out of last year's Sundance movie festival called Coda, which only won "Best Picture" at the 2022 Academy Awards, as well as the director winning the "Best Director" Oscar and claiming another nod for "Best Supporting Actor." Not a bad start for life on the Apple TV+ service.
Do you like this list? Do you want to see more breakdowns like this in future months? Let me know in the comments below, and don't forget to get a FREE stock worth up to $200 from my friends at Robinhood. Thanks for reading!
