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A whole new generation of investors have taken the Robinhood brokerage app by storm. It is a mark of distinction for a company to be considered a “Robinhood stock”, that is to say among the 100 most popular stocks on the platform.
Long before Robinhood was available, the Motley Fool CAPS service offered a similar way for our community of investors to weigh in on the most popular stocks. The stock picker game allows members to select stocks to either outperform or underperform the market. CAPS then aggregates all the opinions of the entire community to get a score. A five-star rating makes a stock the cream of the crop, while a star is awarded to stocks that receive the least reception from our investment community.
As most investors know, the key to success is finding the best stocks before they gain popularity. With that in mind, here are three growth stocks that are yet to make Robinhood’s top 100, but have earned coveted five-star ratings on Motley Fool CAPS. Don’t wait to take a look – as they just might be on the Robinhood list before you know it.
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1. Axon Enterprise
Axon Enterprise (NASDAQ: AAXN) is best known for his tasers, and that’s what initially caught the attention of Fool members on CAPS. The title got nearly 1,600 active picks, and an overwhelming 94% of those were positive recommendations, so Axon earned its five-star rating. Its stock has more than doubled in price over the past 12 months.
Axon has gone beyond the Tasers to embrace a more comprehensive selection of technologies vital for law enforcement applications. The company’s body cameras and vehicle cameras have become increasingly needed, both for police surveillance and for legal proceedings. Axon has also developed a digital cloud-based evidence management platform designed to help agencies track the information they collect for prosecutions.
The future is bright for Axon. The company is looking into more cutting-edge applications, such as building artificial intelligence capabilities and distributing services across its offerings. Axon’s turnover represents only 2% of its addressable market. That leaves a lot of growth for the body camera maker.
Image source: Getty Images.
2. Magnite
Magnite (NASDAQ: MGNI) has largely harnessed the demand for programmatic advertising services, and it is paying off for shareholders. The stock has more than tripled in the past year, which has made it a growing favorite among Motley Fool CAPS members. Out of 369 picks, Magnite has convinced all but three rating the stock that it will outperform the wider stock market.
Magnite operates a service that enables publishers of websites, apps and connected TV content platforms to generate revenue by inviting advertisers to their platforms. His model on the supply side is essentially the mirror image of this The Trade Desk (NASDAQ: TTD) helps advertising companies find places to post advertising content.
The recent explosion in the volume of connected TV programs and other available advertising space has given Magnite a unique opportunity to grow alongside the markets it serves. If ad spending increases with the economy in general, there could easily be more room for the supply side ad platform.
3. Shockwave Medical
The past year has been kind to shareholders Shockwave Medical (NASDAQ: SWAV), because the stock has more than tripled since last January. The medical device maker is a pioneer in intravascular lithotripsy technology, which it uses to help patients with atherosclerotic cardiovascular disease. The equipment helps minimize patient trauma while simplifying medical procedures, reducing complications and lowering costs.
Shockwave continues to build its sequel on Motley Fool CAPS, but early pickers love what they see. Of those who rate the stock, 180 out of 182 believe it will outperform the market.
The U.S. Food and Drug Administration has approved Shockwave’s platform to treat certain illnesses, but the company hopes its use can be much broader. Investors will want to watch closely as Shockwave goes through more clinical trials and seeks FDA approval for a wider range of treatment indications.
Ready for Robinhood
Robinhood investors like stocks that have high growth potential and have performed well. Shockwave, Magnite, and Axon fit the bill, making them the best candidates to be the next Robinhood actions for 2021.
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