Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Investors Business Daily
Investors Business Daily
Business
MATT KRANTZ

Robinhood Investors Refuse To Give Up On 10 Losing Stocks

You've got to hand it to Robinhood investors. They're not letting an ugly start to the year for the S&P 500 totally scare them away from all their favorite stocks.

Robinhood investors continue to maintain high conviction in 10 stocks, including Tesla, Apple and AMC, based on the just-released Robinhood Investor Index. High ownership remains in these stocks, even as all 10 of them are down this year and all but three are underperforming the S&P 500, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

"Over the last several years, we've seen our customers become a powerful force in the markets and usher in a new era for Wall Street," Robinhood said in its Investor Index. "With this has come a lot of speculation about our customers' portfolios. Today, we're unveiling the Robinhood Investor Index to show how our customers are investing."

Rough Year For Robinhood Investors

It's been a tough 2022 for most investors, including Robinhood investors.

The Robinhood Investor Index peaked in May 2021, and has been sinking ever since. And the pain has gotten worse still this year. The index is down more than 20% just this year, largely in line with the drop of the Nasdaq composite Index.

But Robinhood investors are staying the course, at least with the 10 stocks they have the most conviction in.

Robinhood Investors Load Up With Tesla

It's not all that surprising given its popularity with Gen Z investors, but Tesla is the top holding with Robinhood investors, too.

But it's not been a smooth ride, this year. Shares of Tesla are down 24.7% this year to 265.25. Analysts, too, are at least not bearish on the stock. They'll calling for the stock to be worth 308.32 a share in 12 months time. And if that's right, it would be a roughly 16% gain. Much hinges on profitability this year. Analysts think the company's profit should rise 85% this year.

Believing In S&P 500 Big Tech

Robinhood investors are famous for owning speculative stocks. But that's not entirely the case.

More than 75% of the Robinhood Investor Index is wrapped up with large cap stocks, including many in the S&P 500. And the largest sector in the index is information technology.

So it's not surprising to see Apple and Microsoft as large holdings. Apple is the No. 2 largest position in the Robinhood index. Apple is starting to hurt investors like Warren Buffett this year, dipping 22%. But keeping conviction high is tougher on owners of Microsoft stock. Shares are down 31% this year. And yet, Microsoft is also a top buy position for many large institutional investors.

Hanging In With Meme Stocks

Robinhood investors' nerves of steel are most clear with AMC and GameStop. Shares of these unprofitable companies are down more than 80% and 50% from their 52-week highs, respectively. Just this year, theater chain AMC is off 74% while video-game seller GameStop is down 32%.

And still, both stocks remain highly weighted in Robinhood portfolios. How long investors can take the pain, though, remains to be seen.

Most Popular Stocks With Robinhood Investors

Showing most conviction in Robinhood Investor Index, but all are down this year

Company Symbol YTD % change Sector
Tesla -24.7% Consumer Discretionary
Apple -22.1 Information Technology
Ford Motor -46.1 Consumer Discretionary
Amazon.com -32.2 Consumer Discretionary
AMC Entertainment Holding -74.4 Communication Services
Microsoft -30.7 Information Technology
NIO -50.2 Consumer Discretionary
Walt Disney -39.1 Communication Services
AMC Entertainment Preferred -4.5 Consumer Discretionary
GameStop -21.2 Consumer Discretionary
Sources: IBD, S&P Global Market Intelligence, Robinhood

Follow Matt Krantz on Twitter @mattkrantz

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.