S&P 500: Robinhood investors refuse to give up 10 losing stocks

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You must return it to Robin Hood (HOOD) investors. They’re not letting a bad start to the year for the S&P 500 totally scare them off from all their favorite stocks.




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Robinhood investors continue to hold strong conviction in 10 stocks, including You’re here (TSLA), Apple (AAPL) and CMA (CMA), based on the just released Robinhood Investor Index. Strong ownership remains in these stocks, even though all 10 of them are down this year and all but three are underperforming the S&P 500, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

“Over the past few years, we have seen our clients become a powerful force in the markets and usher in a new era for Wall Street,” Robinhood said in its Investor Index. “With that, there has been a lot of speculation about our clients’ portfolios. Today we are unveiling the Robinhood Investor Index to show how our clients invest.”

Difficult year for Robinhood investors

2022 has been a tough year for most investors, including Robinhood investors.

The Robinhood Investor Index peaked in May 2021 and has been falling ever since. And the pain got even worse this year. The index is down about 20% this year alone, largely in line with the decline in the Nasdaq Composite Index.

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

Robinhood investors refuel with Tesla

It’s not that surprising given its popularity with Gen Z investors, but Tesla is also Robinhood’s primary investor holding company.

But it hasn’t been easy this year. Tesla shares are down 13.6% this year at 304.42. Analysts, too, are at least not bearish on the stock. They will claim that the stock will be worth 308.07 per share in 12 months. And if true, that would be a gain of about 1%. Much depends on profitability this year. Analysts believe that the company’s profit should increase by 85% this year.

Believe in the S&P 500 Big Tech

Robinhood investors are notorious for owning speculative stocks. But that’s not quite the case.

Over 75% of the Robinhood Investor Index is made up of large-cap stocks, many of them in the S&P 500. And the largest sector in the index is information technology.

It is therefore not surprising to see Apple and Microsoft as large holding companies. Apple is the second largest position in the Robinhood Index. Apple has done well for investors like Warren Buffett this year, losing just 8%. But keeping conviction high is harder for Microsoft stock owners. The shares are down 21% this year. And yet, Microsoft is also a top buying position for many large institutional investors.

Hanging with meme stocks

Robinhood investors’ nerves of steel are clearer with AMC and GameStop (EMG). Shares of these unprofitable companies are down more than 80% and 50% from their 52-week highs, respectively. This year alone, movie theater chain AMC is down 62% while video game vendor GameStop is down 21%.

And yet, both stocks remain heavily weighted in Robinhood portfolios. However, it remains to be seen how long investors can endure the pain.

The most popular stocks with Robinhood investors

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

Company Symbol YTD Sector
You’re here (TSLA) -13.6% Consumer Discretionary
Apple (AAPL) -8.0% Computer science
Ford engine (F) -25.2% Consumer Discretionary
Amazon.co.uk (AMZN) -18.2% Consumer Discretionary
AMC Entertainment Holding (CMA) -62.4% Communication Services
Microsoft (MSFT) -20.7% Computer science
NIO (NIO) -31.3% Consumer Discretionary
waltz disney (SAY) -24.9% Communication Services
Favorite AMC Entertainment (MONKEY) -4.5% Consumer Discretionary
GameStop (EMG) -21.2% Consumer Discretionary
Sources: IBD, S&P Global Market Intelligence, Robinhood

Follow Matt Krantz on Twitter @mattkrantz

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