If you’re curious about the legitimacy of WallStreetBets stock picks, you’ve come to the right place. Some of the worst WallStreetBets stock picks you can own are GameStop (NYSE:GME), Trump Media and Technology Group (NASDAQ:DJT), and AMC Entertainment (NYSE:AMC). Over the past 24 hours preceding June 1, these three meme stocks had 14, 14, and three mentions, respectively.
While the WallStreetBets (WSB) community often discusses many poor-quality stocks, it also highlights several great companies. For instance, the number one WSB stock by mentions in the past day at the time of writing is the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), with 244 mentions, nearly 100 more than the second-most mentioned stock, Nvidia (NASDAQ:NVDA).
SPY is an excellent investment, and if held for 3-5 years or more, it is likely to yield profits, especially as Nvidia plays a pivotal role in the AI revolution. The WSB community has also discussed other solid investments with significant growth potential. Here are three other WallStreetBets stock picks that have the potential for massive gains. To keep it interesting, I’ll keep my suggestions outside the Magnificent Seven.
Visa (NYSE:V)
Visa had the third-highest mentions over the past 24 hours, with 82, which was 57% fewer than the previous day. As one of the world leaders in digital payments, Visa’s name is universally recognized. In fiscal year 2023, Visa processed 213 billion payments and cash transactions under its brand.
In Q2 2024, Visa generated $8.8 billion in revenue, marking a 10% year-over-year increase, and reported $5.1 billion in non-GAAP earnings, which is a 17% rise from Q2 2023. During the quarter, the company processed 72.08 billion transactions, with debit transactions accounting for 66% and credit for 34%.
Visa continues to be shareholder-friendly, returning $3.8 billion to shareholders in 2023 through dividends and share repurchases. Over the past decade, it has reduced its share count by nearly one-fifth. As Warren Buffett often says about share repurchases, your ownership position grows without investing a single new dollar in the company.
Over the past three years, Visa has grown its revenue and net income on an annualized basis by 14.34% and 16.71%, respectively. Despite a corporate history spanning 66 years, Visa continues to grow at double-digit rates. Although Visa’s annualized total return over the past three years was 6.90%, its return over the past 15 years is nearly three times higher, indicating it is due for better returns.
Invesco NASDAQ 100 ETF (QQQM)
Although the Invesco NASDAQ 100 ETF (NASDAQ:QQQM) wasn’t mentioned specifically, its more well-known counterpart, the Invesco QQQ ETF (NASDAQ:QQQ), was. QQQ had the fourth-highest mentions over the past 24 hours at the time of writing, with 64 mentions, which was 33% fewer than the previous day.
QQQM tracks the performance of the Nasdaq-100 Index, a collection of 100 of the largest non-financial companies trading on the Nasdaq. While QQQ has existed since March 1999, QQQM was launched in October 2020 to offer buy-and-hold investors a lower-cost option (5 basis points cheaper at 0.15%) and with an ETF structure rather than a unit trust. This allows QQQM to reinvest dividends and lend its stock to short sellers.
All seven of the Magnificent Seven are in the ETF’s top 10 holdings, which account for 49% of its $26 billion in net assets. The other stocks in the top 10 are Broadcom (NASDAQ:AVGO) and Costco (NASDAQ:COST), which I also recommend.
QQQM is heavily tech-focused, with nearly 59% of net assets allocated to the technology sector. The next two largest sectors are consumer discretionary (17.9%) and healthcare (6.29%). The downside of QQQM is its lower liquidity compared to QQQ. However, its 30-day average daily volume of 1.58 million is sufficient should you need to sell shares quickly.
If you want exposure to the Magnificent Seven stocks without as much risk, QQQM is a good option. Kudos to the WSB members for recognizing this.
Costco (NASDAQ:COST)
Costco had the 19th-highest number of mentions over the past 24 hours, with 10 mentions, which was 85% fewer than the previous day. The late Charlie Munger, who served on Costco’s board for 26 years until his death in November, believed it was one of the greatest businesses.
“I love everything about Costco,” Munger said during The Daily Journal’s annual shareholder meeting in February. “I’m a total addict, and I’m never going to sell a share,” he added, as reported by Yahoo Finance.
Such praise from a corporate director in an S&P 500 company is rare and noteworthy. Munger’s endorsement carries weight, and his positive sentiments about Costco are shared by many investors.
Costco’s business model focuses on offering the lowest prices possible while making most of its profit from annual membership fees. In 2023, its revenue from membership fees was $4.58 billion, accounting for 73% of its $6.29 billion in net income. In 2013, membership fee revenue was $2.29 billion, or 112% of net income, reflecting a compound annual growth rate of 7.2% over the past decade.
Costco’s business model, positive employee morale, and strong financial performance make it a compelling investment.
Will Ashworth, a seasoned writer on investments, emphasizes the potential of these stocks. His extensive experience and successful track record in creating model portfolios suggest that these WallStreetBets stock picks could offer significant returns.
Conclusion
While WallStreetBets has a reputation for promoting high-risk stocks, it also highlights quality investments. Visa, the Invesco NASDAQ 100 ETF, and Costco are three examples of stocks with strong fundamentals and growth potential. Investors should consider these picks for their portfolios, recognizing the research and analysis behind each recommendation.