A whole new generation of investors has taken the Robinhood brokerage app by storm. It is a differential for a company to be considered a “Robinhood action” – that is, one of the 100 most popular actions on the platform.
Long before Robinhood was available, the Motley Fool CAPS service offered a similar way for our investor community to weigh in on the most popular stocks. The stock selection game allows members to choose stocks to outperform or outperform the market. CAPS then aggregates all opinions from the entire community to reach a rating. A five-star rating makes stock the cream of the crop, while a star goes for stocks that have the worst reception in our investor community.
As most investors know, the key to success is finding the best stocks before they gain popularity. With that in mind, here are three growth stocks that are not yet on Robinhood’s top 100 list, but have earned the coveted five-star ratings at Motley Fool CAPS. Don’t wait to take a look – because they may well be on Robinhood’s list before you know it.
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1. Axon Enterprise
Axon Enterprise (NASDAQ: AAXN) he is best known for his Taser stun guns, and this is what initially caught the attention of Fool members at CAPS. The stock got almost 1,600 active choices, and an impressive 94% of them were positive recommendations, so Axon received its five-star rating. Its stock has more than doubled in price in just the past 12 months.
Axon went beyond Tasers to embrace a more complete selection of vital technology for use in law enforcement. The company’s body and vehicle cameras are becoming increasingly necessary, both for police enforcement and for use in court cases. Axon has also launched a cloud-based digital evidence management platform designed to help agencies track the information they collect for use in lawsuits.
The future is bright for Axon. The company is looking for more advanced applications, such as building artificial intelligence capabilities and shipping services in its offerings. Axon’s revenue represents only 2% of its addressable market. This leaves a lot of growth ahead for the manufacturer of body cameras.
Image source: Getty Images.
2. Magnite
Magnite (NASDAQ: MGNI) has met the demand for programmatic advertising services in style and is paying off for shareholders. The stock more than tripled last year, and that has made it one of the growing favorites among Motley Fool CAPS members. Of 369 choices, Magnite convinced everyone, except three of those who evaluate the shares, that she will outperform the broader stock market.
Magnite operates a service that allows publishers of websites, applications and connected TV content platforms to generate revenue by inviting advertisers to their platforms. Your supply-side model is essentially the reflected image of what The Trade Desk (NASDAQ: TTD) helps advertising agencies find places to post advertising content
The recent explosion in the volume of connected TV programming and other available advertising spaces has given Magnite a unique opportunity to grow along with the markets it serves. If advertising spending increases along with the broader economy, then there could easily be more space to display the supply-side ad platform.
3. Shockwave Medical
The past year has been kind to shareholders in Shockwave Medical (NASDAQ: SWAV), since the stock has more than tripled since last January. The medical device manufacturer is a pioneer in intravascular lithotripsy technology, which it uses to help patients suffering from atherosclerotic cardiovascular disease. The equipment helps to minimize patient trauma while simplifying medical procedures, reducing complications and costs.
Shockwave is still building followers on the Motley Fool CAPS, but early selectors like what they see. Among those who evaluate the stock, 180 out of 182 think it will outperform the market.
The US Food and Drug Administration has approved the Shockwave platform to treat some diseases, but the company expects its use to be much broader. Investors will want to watch closely as Shockwave undergoes more clinical trials and seeks FDA approval for a broader range of treatment indications.
Robinhood ready
Robinhood investors like stocks with strong growth potential and good performance. Shockwave, Magnite and Axon fit the bill, making them the top candidates to be Robinhood’s next actions in 2021.