If you’re updating your watchlist or getting ready to make a speculative buy, here are seven of the best Robinhood stocks to buy that are attractively priced at under $20.
Robinhood (NASDAQ:HOOD) came into existence by appealing to individual investors who were underserved by traditional brokerages. The ability to execute commission-free trading and the opportunity to buy fractional shares of equities was an example of disruptive technology.
One popular attribute of the Robinhood app is the ability for investors to indulge their preference for inexpensive stocks. In fact, the growth of the retail investor coined a new class of stocks called Robinhood stocks.
However, for many retail investors, the recent downturn in the market is keeping them on the sidelines. Robinhood is acknowledging decreased trading volumes, monthly active users (MAUs), and assets under custody. However, with 15.9 million monthly active users, the site is well equipped to service the individual investor who is looking to actively trade the market.
And if you’re one of those investors, here are seven stocks that are currently trading for less than $20 a share. That allows you to buy several shares without making a large investment.
|PLTR||Palantir Technologies Inc.||$9.18|
|SOFI||SoFi Technologies, Inc.||$6.66|
|LCID||Lucid Group, Inc.||$19.59|
|PLUG||Plug Power Inc.||$18.54|
|CHPT||ChargePoint Holdings, Inc.||$15.49|
|ET||Energy Transfer LP||$12.26|
Best Robinhood Stocks to Buy: Palantir (PLTR)
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Palantir (NYSE:PLTR) was one of the more controversial companies to go public in the last two years. One reason was the way it went public through a direct listing. Another reason is the company’s founder Peter Thiel is a controversial figure. And some of the company’s largest clients are in the U.S. government, specifically the defense industry.
However, the company has been consistently increasing the number of commercial clients on its roster. And in the company’s most recent earnings report the company posted a 54% year-over-year revenue increase in its commercial business. Plus, it continues to add clients within the government.
That being said, PLTR stock is now trading below its direct listing price. I’ve previously posed the question, what more does Palantir have to do? It could be that retail investors are beginning to ask the same question.
SoFi Technologies (SOFI)
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SoFi Technologies (NASDAQ:SOFI) is down 57% for the year. And for investors who bought SOFI stock at its 52-week high, the loss is even greater. SOFI entered the market at the height of the fintech bubble. However, investors are struggling to decide if the fintech firm represents a better alternative or is it just one of many.
One person who is placing his bets on SoFi being the former is its chief executive officer, Anthony Noto. He’s been buying shares with regularity. In fact, his most recent purchase was his 12th buy in the last 12 months. This is nearly always a bullish sign. Remember there are many reasons for insiders to sell a stock, but they typically only buy for one reason. That is, they believe the stock is undervalued. And at least one analyst shares that opinion. SoFi received a bullish upgrade from Piper Sandler.
Lucid Motors (LCID)
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The air has come out of the electric vehicle bubble. But while concerns about valuation remain, many of these stocks are trading far below their 52-week highs. That gives investors with realistic expectations a time to buy compelling EV stocks at a bargain price. Lucid Motors (NASDAQ:LCID) appears to be one of those candidates. The company is starting to deliver its vehicles. And because the company’s vehicles are being marketed to affluent consumers, demand should not be as sensitive to inflation.
Any EV stock is a long-term play at this point. One reason for that is that all of the companies in this space continue to face supply chain disruptions. That’s why I view the company’s production misses as an honest mistake. However, they do have to show that they can meet, or exceed lowered expectations. If they can, than LCID stock is likely to be a compelling option among EV stocks.
Best Robinhood Stocks to Buy: Plug Power (PLUG)
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I’ve made the analogy that building a portfolio is similar to building a fantasy football roster. At the end of every draft, many veteran fantasy players take an under-the-radar player on a hunch. If the hunch plays out, they may have made a move that can win them their league. And if it doesn’t work, they just put the player on waivers.
That’s the same way I feel about buying Plug Power (NYSE:PLUG). It’s not a stock that should get a dominant position in your portfolio. However, it is a pure play on the viability of hydrogen as a renewable energy source. But hydrogen does not have mass adoption yet and although it has revenue, profit may be years away if it happens at all.
But with PLUG stock trading below $20, it could be worth a small position for risk-tolerant investors.
ChargePoint Holdings (CHPT)
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Another of the best Robinhood stocks to buy for under $20 is ChargePoint (NASDAQ:CHPT). There are other companies in the charging infrastructure space. However ChargePoint is the largest company by a large margin. In fact, the company currently has over 109,000 locations where consumers can charge their vehicle.
That should allow the company to capture the lion’s share of the business that will come as a nationwide charging infrastructure is built. However, like many companies on this list, the company’s top-line growth over the next five years is not expected to lead to profitability.
CHPT stock has been volatile, but it’s showing signs of smoothing out. That could make it attractive for investors who are looking for stocks that will look better in the next 12 months or longer.
Energy Transfer (ET)
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The next of the best Robinhood stocks to buy on this list is the master limited partnership, Energy Transfer (NYSE:ET). For investors who are unfamiliar with the company, it develops infrastructure projects and is planning to spend over $2 billion in 2022 for expansion. Unlike many stocks on this list, ET stock appears to be undervalued by many fundamental metrics. And that’s even with the stock up 49% for the year.
As a master limited partnership, the company behaves similar to a real estate investment trust (REIT). As such it passes along a high percentage of its free cash flow as a dividend. The company sports a dividend yield of 6.7%.
Best Robinhood Stocks to Buy: DraftKings (DNKG)
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The last company on this list of the best Robinhood stocks to buy may be considered a real gamble, no pun intended. DraftKings (NASDAQ:DKNG) went public in 2021 amidst the buzz of the legalization of sports betting in many states. This isn’t happening as fast as investors would like and it will likely act as a ceiling on DKNG stock in the short term.
However, this is a company with a huge addressable market, a recognizable brand, and it’s well seeded in the sports betting market. Cash burn is an overriding concern for many investors as is the competition that exists in the sector. And investors may also be sour on the company because it went public via a special purpose acquisition company (SPAC). SPAC companies are always suspect because they can go to market without having to clear some of the regulatory hurdles required by companies that go public via a traditional initial public offering.
On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.