Even if you have no intention of signing up for a Robinhood Markets (HOOD 4.44%) brokerage account, you've probably benefited from Robinhood if you own stocks. That's because Robinhood was integral to making zero-commission trades the industry standard, saving individual investors hundreds or even thousands of dollars a year.
The disruptive app-based brokerage also changed the investing landscape with a gamified mobile-first platform strategy, digestible and educational investing posts, and an appeal to the younger generation -- the average age of a Robinhood accountholder is estimated to be just 32.
Robinhood's popularity with young adults suggests it might be worth paying attention to what's popular among the users of its platform. One way to do that is to check out Robinhood's regularly updated list of the 100 most widely held stocks among its users.
Let's take a look at three stocks from that list that have the potential to be great buys right now.
Image source: Getty Images.
1. Walt Disney
Walt Disney (DIS -0.04%) has one of the most valuable brand portfolios in the world, including its namesake Disney, Marvel, Star Wars, and Pixar brands. Its strengths, which include destination theme parks and a massive entertainment content library, are self-evident.
Disney stock has struggled in the past two years as it works to make the transition from linear TV to streaming, and shares recently touched nine-year lows. That could be a great buying opportunity if CEO Bob Iger executes the company's turnaround plan over the coming quarters.
First, Disney plans to turn its streaming segment positive by the end of fiscal 2024. It's already made progress toward that goal and a price hike in October should help further.
Additionally, the company seems on the verge of a major asset sale. Media reports indicate that the company is on the verge of selling a majority stake in its Indian operations, which it had valued at $10 billion, and there are also rumors that it could sell TV network ABC and/or some of its cable networks. Doing so would free up cash to pay down debt or invest in growth opportunities like streaming. Separately, the company also announced that it would nearly double capital expenditures on its theme parks business to close to $60 billion over the next decade, meaning that key cash cow should continue to grow.
If Disney can raise cash, reorient its portfolio toward growth, and turn its streaming division profitable, the stock could be much higher a year from now.
2. Meta Platforms
While Disney attempts a turnaround, Meta Platforms (META 0.43%) has successfully executed one. Share prices of the social media giant more than tripled off their nadir set about a year ago as the company cut costs, boosted profitability, executed on product initiatives like Reels, and benefited from a recovery in the digital advertising market, which still has room to run.
Meta continued to lose billions of dollars on the metaverse-focused Reality Labs division, but investors overlooked that as the company develops promising initiatives in artificial intelligence (AI), including its language model LLaMa, its new AI assistant, and products like smart glasses with Ray-Ban.
Meta's third-quarter results also showed how it rebounded from its earlier challenges. Revenue jumped 23% year over year to $34.1 billion as Reels is no longer a drag on overall ad monetization, and operating margin doubled in the quarter from 20% to 40%.
With profits ramping higher, Meta stock now looks reasonably priced for its growth rates. As the ad market continues to rebound, the stock should benefit.
3. General Motors
Another stock that's deserving of more investor attention right now is General Motors (GM 0.48%). GM generates bumper profits from its traditional combustion-engine vehicle division and staked out solid positions in both electric vehicles and autonomous vehicles through Cruise.
Despite significant profits and promising growth businesses, the stock trades at a rock-bottom price-to-earnings ratio of just 4, a valuation typically reserved for dying businesses. It's true that the United Auto Workers strike dealt a blow to GM, causing it to pull its full-year guidance, but the strike has since been resolved and GM should be able to put the disruption behind it.
In the third quarter, the carmaker reported $3.6 billion in operating income with an 8.1% operating margin, outperforming Tesla in profitability, and that result includes a $732 million loss in its Cruise division. However, those investments could soon pay off as Cruise target $1 billion in revenue by 2025 and CEO Mary Barra believes it could generate $50 billion in revenue by 2030.
GM doesn't need Cruise to succeed for the stock to be a winner, but if it does, shares could skyrocket from here. As autonomous ridesharing moves closer to the mainstream, owning GM stock looks like a smart move, especially at the current valuation.
