Robinhood Trading app publishes a list of the top 100 most popular stocks. Some of them are dubious investments that are too risky for novice investors, who make up a large part of Robinhood’s clientele – but others are willing to provide a return on the market due to their strong business models and compelling short-term growth catalysts. Here are two top stocks of Robinhood that you should consider adding to your portfolio in August.
The first is Walt Disney (NYSE: DIS), a downed entertainment giant, ready to bounce back with its streaming expansion. The second is Peloton Interactive (NASDAQ: PTON), a luxury fitness brand, taking advantage of the trend towards fitness at home. Both stocks look ready for the bull.
Walt Disney: A new streaming strategy
Disney is ready to bounce back from the coronavirus pandemic. As of Friday, the stock recovered most of its losses from the highest market in February, but is still well below its own 52-week high of about $ 153. At the same time, investors are increasingly excited about Disney’s current strategy.
The blue-chip entertainment company reported gains for the third quarter of its fiscal 2020 on August 4. As expected, the results were rough. The April-June quarter faced severe restrictions and travel restrictions during the height of the pandemic, which hurt Disney’s sales and margins. Total revenue fell 42% during the year, driven by a weakness in the park’s experience and products segment – which fell 85% during the quarter. As amusement parks have been closed for most of the year, it is no surprise that sales have increased. But investors can expect a recovery in the second half of the year because Disney has already opened most of its locations.
Disney’s direct-to-consumer (streaming) segment is also poised for strong long-term growth. The company has announced plans to launch a new streaming platform called Star in 2021 for the international market. The platform will include content from ABC, FX and 20th Century Studios. Disney also decided to launch the long-awaited movie Mulan at Disney + and a $ 30 fee to see it in the US – a move that underscores the company’s potential advantage over original content over competitors Netflix and Amazonis prime minister.
Peloton Interactive: Super scalable business model
Luxury fitness company Peloton performed well this year, with a 140% annual rally driven by the demand for exercise at home amid the coronavirus pandemic. The company is ready for long-term growth due to its strong business model and improved margins.
As COVID-19 is still at large, many users avoid gyms and choose to train at home instead. This trend is great news for Peloton. Thanks to the demand for related exercise bikes and treadmills, equipment and subscription sales increased in the fiscal third quarter. The company’s total revenue jumped 66% to $ 524.6 million due to strong equipment sales and corresponding growth in subscriptions.
Peloton’s business model is unique in that equipment sales lead to the growth of a potentially much more profitable subscription service – leading to a rapid improvement in margins.
The company’s gross subscription sales margin jumped from 26% to 58% in the quarter and appears poised to continue to improve as the company’s subscription base grows. Peloton can lead to future growth and margin improvements through new hardware versions. According to CFO Jill Woodworth, a lower-priced protector could hit the shelves soon.