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Sport News | The 7 Best Reddit Stocks to Buy in January to Start Strong

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The 7 Best Reddit Stocks to Buy in January to Start Strong

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We are well into 2022, which means we will be discussing which stocks to buy this year. In this case, in January. If you’re like me, you associate Reddit actions with r/WallStreetBets message board and CMA (NYSE:CMA) and GameStop (NYSE:EMG) actions in particular.

I don’t recommend buying either, but I believe they represent an incredible narrative. It was when r/WallStreetBets fans decided to band together and take on Wall Street short sellers at their own game that this phenomenon began.

It was one of the weirdest things to happen to the markets in 2021. But 2021 has been a weird year. Investing seems to be changed forever. It doesn’t look like things are going back to their old status. This means that Reddit discussion forums will also play a vital role in stock prices this year.

Although the phenomenon has brought us phrases like “diamond hands” and suspicious investment advice, it’s not all a joke. Many simply want to understand the stock market and make sound investment decisions.

This is by no means wild speculation. With that in mind, let’s take a look at the softer side of Reddit stocks to consider this month.

  • Roblox (NYSE:RBLX)
  • Starbucks (NASDAQ:SBUX)
  • CrowdStrike Holdings (NASDAQ:CRWD)
  • Unit Software (NYSE:you)
  • Nvidia (NASDAQ:NVDA)
  • Z-scale (NASDAQ:SZ)
  • Etsy (NASDAQ:ETSY)

Reddit Stock: Roblox (RBLX)

Source: Miguel Lagoa / Shutterstock.com

On October 28, Facebook changed its name to Metaplatforms (NASDAQ:Facebook). This announcement fomented a drastic change of opinion regarding the metaverse.

In short, it made it much more real. If Facebook is bold enough to change its name to Meta Platforms, the thinking goes, then this metaverse thing is more than just a passing fad.

This of course meant that all the action related to the metaverse suddenly became much more interesting, including Roblox.

Roblox is a platform that allows developers to create millions of immersive worlds through Roblox Studio. Avatars exist in these worlds, interacting in the multitude of ways humans do in the real world.

Most analysts agree that RBLX stock should appreciate going forward. However, there is something of a disagreement when it comes to judging the company’s performance.

Some analysts lean towards bookings, while others see traditional metrics like revenue as more indicative of performance.

In both cases, November was a strong month. Bookings were between $208 million and $211 million, representing a 22-24% year-over-year increase. Revenues increased by 87% over the same period.

Starbucks (SBUX)

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Source: Natee Meepian / Shutterstock.com

If you look at analysts covering Starbucks, you’ll get a mixed message about its outlook right now.

About half of them consider it a purchase, while the other half have held on to it. Makes sense. Omicron plays an important role in falsifying an economic rebound. Inflation concerns are also directly affecting retail, which could reduce demand at Starbucks.

Starbucks is making significant changes. In October, Starbucks announced that it would raise the salary floor for its employees. American hourly workers will earn an average of nearly $17/hr and baristas will earn between $15 and $23 starting this summer.

Yes, it does increase operational expenses, which isn’t usually a big factor when it comes to stock price, but analysts also agree it’s the right path for Starbucks in the long run.

So buy SBUX now while it’s temporarily down and capitalize later when strong picks pay dividends.

Remember that Starbucks recently posted record quarterly revenue of $8.1 billion. Sales were strong globally and domestically. Starbucks is down due to larger narratives, but fundamentally remains the same exceptionally strong company it has always been.

Reddit Stocks: CrowdStrike Holdings (CRWD)

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Source: VDB Photos / Shutterstock.com

When a stock gains notoriety for a leadership position, it is often overbought. This appears to be what happened to cloud cybersecurity company CrowdStrike Holdings.

It has become the leading name in securing devices, especially enterprise ones, even in the cloud. Capital rushed in and prices soared to levels that seemed unwarranted on the basis of sales.

Then the market pulled back, noted that CRWD shares were suddenly overvalued, and capital fled in November. It was a classic example of the market pendulum swinging to the extreme. In other words, it’s cheap now because of negative overreaction. So consider a purchase.

It’s true, tech stocks are usually penalized when the Fed raises rates. And that certainly played a role in CrowdStrike’s recent drop. But the firm is a strong operator in an increasingly important sector.

The company recently received its second consecutive No. 1 ranking for Modern Endpoint Security revenue market share.

The company’s most recent earnings report points to almost universally strong fundamentals. And the company has plenty of growth ahead, supported by a rapidly growing revenue base.

Unity Software (U)

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Source: Konstantin Savusia / Shutterstock.com

There are at least three reasons to consider investing in Unity Software right now: analysts strongly support it, recent earnings have been strong, and the company recently acquired a strong asset.

U stock is an almost unanimous buy. Of the 13 analysts with coverage of the stock, all but one view it as a buy. Their average target price of $181.83 is 56% higher than what it is currently trading at.

This is partly due to the company’s recent strong earnings, which reflect strong business. The company, which provides gaming software to monetize 2D and 3D content, recently posted record quarterly revenue of $286 million.

The company went public last September. Since then, it has posted an average revenue growth of 45%. This should continue. The company is expected to record revenue of approximately $1.09 billion in 2021. This figure is expected to reach $1.42 billion in 2022.

Additionally, Unity Software recently acquired Weta Digital. Wet Digital is an Oscar-winning digital team responsible for the scenes and characters of The Lord of the Rings and Avatar.

Unity Software acquires engineering talent from Weta Digital but it will remain separate from Unity.

Reddit Stocks: Nvidia (NVDA)

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Source: Hairem / Shutterstock.com

Bank of America (NYSE:BAC) analyst Vivek Arya and his team remain bullish on semiconductors in 2022.

He likened power plants to the “new oil of the rapidly digitizing global economy”. Arya’s team points to global GDP growth of over 4% in 2022 and the outsized role of semiconductors in that growth as a bullish theme.

Arya’s employer predicts 13% growth in semiconductor industry-wide sales this year compared to last year. And NVDA stock is the bank’s premier investment in the industry.

Analysts predict even stronger growth for Nvidia in the future. The consensus is that Nvidia will register $26.68 billion in revenue in 2022 and $31.77 billion in 2023.

That’s a 19% increase for Nvidia, but BoA is even more bullish and sees Nvidia’s sales up 25% to 30%.

The average target prices of $342.40 imply a significant upside from the current prices of $265. 2022 is shaping up to be another big year for semiconductor stocks, led by Nvidia.

Z-scale (ZS)

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Source: Michael Vi / Shutterstock.com

Zscaler is another tech company that has suffered lately. When the Fed announced that it would accelerate its schedule to reduce bond purchases, it also indicated that it would take action against inflation.

This meant that easy money policies would tighten, which is correlated with a slowdown in tech stocks, and ZS stock had a downward trend.

The tech’s rapid sell-off has taken it from $365 to around $250 as I write this. Technology has seasons. You can reliably buy tech stocks at a discount around this type of news, wait for a reversal in sentiment and profit.

Zscaler reported strong earnings in early December. Revenue increased 62% to $230.5 million in the quarter. But the wheels of the tech sellout were already in motion.

UBS (NYSE:UBS) analyst Roger Boyd sees this as an overreaction from the market: “While much of this outsized pressure is due to Zscaler’s higher valuation, we believe the market is too pessimistic about growth expectations, sales effectiveness, and competition.

Reddit Stocks: Etsy (ETSY)

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Source: Quietbits/Shutterstock.com

Invest in Etsy because it basically makes sense.

The online market for handmade goods has shown strong performance in its latest earnings period.

Quarterly revenues increased by 17.9%, which exactly matches the increase in gross merchandise sales (GMS). GMS grew 39.2% while revenue grew 45.4% in the first nine months of 2021.

But this knowledge was released in early November. Now investors are waiting to see how Etsy fared over the holiday season.

If the news is good, as expected, ETSY stock will rise. With stock prices falling sharply throughout December and January, now is the time to buy.

Some predict that Etsy will remain overvalued even at current prices. But e-commerce is not going anywhere. Etsy dominates the handmade space, and it’s worth it.

At the date of publication, Alex Sirois did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Alex Sirois is an Independent InvestorPlace Contributor whose personal equity investing style focuses on long-term, buy-and-hold stock picks that create wealth. Having worked in multiple industries, from e-commerce to translation to education and using his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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