It is time to get a look at Roundhills Meme ETF holdings. This is a portfolio of more than 20 possible meme stocks, that can benefit from retail investors'' excitement and eventually head to the moon.
AMC (AMC) - Get AMC Entertainment Holdings, Inc. Class A Reportand GameStop (GME) - Get GameStop Corp. Class A Reporthave become mainstream in the MEME fund. However, most traders and investors would probably never consider them as meme plays.
Three of these stocks have been reviewed today. Could they be on the verge of being extended into the summer months?
Figure 1:Meme ETF: These two Stocks Aren''t Obvious Meme Plays
(Read more from Wall Street Memes: Is Robinhood Doomed to Become a Penny Stock?)
How to find meme stocks
Different people may have different opinions on what a good meme stock might be. Some would probably only bother to own AMC or GME. Others might also look at the most popular stock of the moment to see if overwhelming bullishness might take them to new heights.
Every two weeks, the Meme ETF has a simple but systematic method of identifying new meme stories. The process of filtering and stock picking is:
- From a large pool of many stocks, assign a social media activity score to each, thus identifying stocks that have been hot on the main social media platforms.
- Separate the top 50 most popular stocks, discard the rest.
- Rank those 50 based on short interest, with the most heavily shorted ones featuring on top. Pick the top 25 names.
- Keep monitoring the market to capture the most recent trends in meme mania, and refresh the list every 14 days.
2 oddball meme stocks: TWTR, AAL
Some of the MEME''s most recent portfolio upgrade, including AMC and GME, as well Draftkings (DKNG) - Get DraftKings Inc Class A Reportand Nio (NIO) - Get NIO Inc. (China) Reportamong the top ten holdings.
Twitter (TWTR) is the third largest stock in the MEME ETF. It''s not hard to understand why shares of Elon Musk have just offered to buy the company for $44 billion, and shareholders have said yes.
It is also reasonable to expect speculative actions here, including from those who believe that the agreement to take Twitter private will fall apart. TWTR is expected to fall from its current market value of around $49 per share to something in the 30s.
The problem is that, in my opinion, TWTR has quite little upside advantage. There is no reason for the stock to climb above Elons $54.20 per share offer, which has reduced the moon potential in this case to a 10% increase. Therefore, this TWTR stock is a bad meme play.
The other stock on the list that has caught my attention is American Airlines (AAL) - Get American Airlines Group, Inc. Report. Shares of the airline currently sit among the top 12 holdings in MEME.
If the meme stock is low share price but weak business assumptions to sustain impressive valuations, then AAL does not fit the profile. This stock has not made fresh all-time highs since November 2006, but it also trades at a next-year P/E of only 8 times.
AAL stock may be mooning, according to me.
Consumers are beginning to spend a bit of money once more on transportation. Airport traffic is nearing pre-pandemic levels, and the summer season is promising for the industry.
American is one of the most leveraged (financially and operationally) companies in the industry. Therefore, the advantage in the space might be exponentially bullish for AAL.
Which pair would you most likely buy today and hold till the summer season, according to the following popular stocks?
(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Aside from the article, affiliate links may be found. These partnerships do not influence editorial content. Thanks for your support for Wall Street Memes