December 27, 2021

The Tea On 2020’s Trends & Plays

Good evening. We hope you had a wonderful holiday! 🎁 Welcome back to the Daily Rip.

All four major indexes closed positive. The Nasdaq and S&P 500 moved the most, increasing 1.39% and 1.38% respectively.

Major sectors ended the day green. ☘️ Energy earned 2.24%, real estate rose 2.04%, and information technology increased 2.18% as semiconductors spiked 3.06%.

GoDaddy ($GDDY) shares gained 8.37% on news that the activist investor Starboard Value bought a 6.5% stake in the company. Starboard Value, a hedge fund, purchased an estimated $800 million in shares to push for certain proposals. Check out the chart:

$LMND lost 6.81%. Lemonade Inc is down 65% YTD due to a series of unfortunate business-related events. Can lemonade sweeten its sour year in 2022?? 🍋

$DIDI shares dumped another 5.36% after it was reported the company’s stakeholders are being barred from selling their stock. 😬

Biotech had itself a day. 🤭 $MBOT gained an impressive 63.84% on an announcement of the company’s collaboration with Stryker Corporation. $BBIO didn’t have such a great day — the company lost 71.98% on news that its phase 3 study of symptomatic transthyretin amyloid cardiomyopathy didn’t achieve its goals.

$HMIX hiked 12.75%, $SG ascended 11.7%, and $HLTH soared 21.87%.

As we’re wrapping up the end of the year, our traditional coverage will take a backseat to content looking back at 2021. However, our subject line today is no mistype… because today, we’re looking back even further by reflecting on how the biggest trends of 2020 held up in 2021.

But first, here are the final quotes:

S&P 500	4,696	+1.38%
Nasdaq	15,521	+1.39%
Russell 2000	2,221	+0.89%
Dow Jones	35,753	+0.98%

Stocks

Out With the Old? Looking Back At How 2020’s Biggest Winners Performed In 2021. ☕

2020 was a wild year for growth stocks and “retail-popular stocks,” but 2021 struck a different tone with investors. How did the biggest winners perform in 2021? 🤔 💡

To understand growth stock performance, you can look at the Russell 2000 index, which underperformed in comparison to its cousin indexes (+15.7% YTD). Another unconventional (but interesting) way of examining stocks popular among retail investors is to look at the Top 100 stocks on Robinhood, which is a representative list of “retail popular stocks.” This is by no means a replacement for our very own Stocktwits Top 25, 😉 but it’s a different measure of what traders might deem valuable.

What’s most stunning about the Top 100 list is the remarkable success Robinhood traders (or at least the people following them) have experienced over the last two years. 🚀 🚀 The Robinhood Top 100 stocks (equal weight) doubled last year. This year, those same stocks more than doubled again. That’s why we wanted to take a look back at the plays and trends that made 2020 to see which ones had staying power (and which ones did not.)

What Kept Winning?

The biggest boil-over successes from 2020 included oil plays such as $MRO, $UCO, and $GUSH, which all rose ~145% this year as oil recovered from the worst of the pandemic. While those names didn’t produce the same returns as other names on the list, they remained strongholds of value — making them the runaway winner from the 2020 Top 100 Robinhood list.

Next up were biotech names like Ocugen (+130%), Moderna (+122%), and Catalyst Pharmaceuticals (+109%). On the whole, biotech stocks were huge benefactors from the pandemic and got considerable valuation boosts in 2020. 👏 🧬 But they tapped out for most of 2021. 🤷 These names largely stand as surprise winners.

Tech remained strong with companies like $TSLA (+67%), $AMD (+67%), $GOOGL (+66%), and $MSFT (+51%) leading the tech stack. Regarding acquisitions from the Robinhood Top 100 list, two were tech companies: Slack (acq. Salesforce) and Fitbit (acq. Google).

Bank names also outperformed the indexes this year. Wells Fargo (+62%), Bank of America (+48%), and JPMorgan (+26%) all grew faster than the Vanguard Total Stock Market Index Fund ETF ($VTI.)

Legacy automakers deserve an honorary mention this year. $F broke above $20 for the first time in two decades, rising 134% in the past year. 🤑 Other automakers, especially ones with EV aspirations, continued to grow this year. We’ll touch on the EV losers below.

So what lost?

Don’t it always seem to go… that you don’t know what you got ’til it’s gone? 🎵 Well, some 2020 winners did not last. And we’re not talking “losing against the index.” We’re talking about trading in the red. 🚨 Thankfully, only 43 names from the Top 100 list lost this year. That might seem like a lot, but it’s generally a good thing. This means retail investors are batting well on the whole. 💯

Travel stocks were close, but no cigar this year. Names such as jetBlue (-2%), Delta (-2%), and Carnival (-3%) all sat just a few points below breaking even this year. Other names weren’t so lucky (Southwest, Boeing, Spirit, and Norweigan didn’t do hot.)

While some tech stocks definitely did well, a pocket of familiar tech names did not do well. $TWTR (-18%), $UBER (-16%), and $PLTR (-25%) weren’t exactly on fire. If you wanna dig deeper, fintech was worse off on the whole: $PYPL fell 18%, $SQ fell 24%, and $RKT fell 26%.

As we mentioned above, some EV names couldn’t keep it together in 2021 (or even 2020, really.) Nikola was down 32% and Workhorse was down 76%. Adjacent plays like $FCEL (-45%) and $BLNK (-39%) got a hefty price cut. ✂️

Sports betting stocks got absolutely hosed, too. 👎 $DKNG (-42%) and $PENN (-43%) lost two-quarters of their value this year. An index tracking sports betting and iGaming names was down 5% on the year, overall.

However, few had a worse year than “penny stocks you’ve never heard of before but are popular for some reason.” 😅 $HEXO was the Top 100 list’s biggest loser, down 81% this year. It was joined by names like $TXMD (-67%), $SOLO (-63%), $IDEX (-46%), and $GNUS (-20%).

What’s the verdict?

All-in-all, Robinhood’s Top 100 stocks from 2020 continued to stand up in 2021. Hopefully retail traders really are doing this well, because 2021’s returns actually best 2020’s returns. From what we can tell (and based on the data we collect), a hypothetical Robinhood Top 100 list (equal-weighted, 2020 edition) would have risen about 141% this year. 💰 💰

Broadly speaking, we covered many of the trends that were popular in 2020. But there’s still plenty of room for elaboration this week as we look back at 2021 to reflect on another wild trading year. Although the Robinhood Top 100 stocks are not a replacement for Stocktwits’ very own Top 25 list, we’ll pull from the present day’s Top 100 list to draw conclusions on 2021’s hottest stocks.

Bullets

Bullets From The Day

Santa brought us the metaverse. On Christmas Day this year, the Oculus VR app was the most-downloaded app in Apple’s app store. This is an indication that Facebook’s Meta VR headset was a very popular gift this Christmas. Earlier this year, Mark Zuckerberg announced the company’s $10 billion investment into metaverse technology — this year’s app store numbers could make Zuckerberg’s virtual reality, well, a reality. Read more in CNBC.

President Biden shared his view that Omicron’s spread should be solved at the state level, not the federal level. President Joe Biden indicated that “there is no federal solution. This gets solved at a state level…” regarding Omicron’s spread, as he pledged to support governors dealing with statewide pandemic policy. Last week’s average of new cases reached 150,000, and it’s anticipated that this figure will keep rising. As case numbers go up, President Biden emphasized “My message to the governors is simple: If you need something, say something. We’re going to have your back any way we can.” Read more in CNBC.

Walmart gets some heat. President Biden passed the Uyghur Forced Labor Prevention Act last week, which aims to ban all goods manufactured in China’s Xinjiang region unless sellers can prove the goods were not manufactured with forced labor. Companies like H&M, Intel, and Nike have been under fire from Chinese consumers recently as U.S. companies restrict their interactions with the Xinjiang region. Walmart was targeted specifically because the retailer removed Xinjiang-made products like red dates and apples from its website, but kept the products stocked on brick-and-mortar shelves. Chinese consumers have expressed their outrage at retailers’ attempts to appear like they’re boycotting Xinjiang imports, with claims that Walmart is “eating China’s rice, yet slapping our face.” Read more in WSJ.

Politicians across the globe hacked by spyware. Political leaders in Poland are producing mounting evidence that they were hacked by Pegasus spyware software. The breaches were initially identified by the Citizen Lab research group based in Canada, and have since been connected to attacks on Polish opposition groups, Polish Senator Krzysztof Brejza, a New York Times journalist, and even the murder of UAE journalist Jamal Khashoggi. Read more in The Verge.

Car pileups, snowstorms, soaring temperatures, and fires — is there something in the air?? Regions throughout the United States are experiencing extreme weather conditions. In the Pacific Northwest, heavy snow has caused thousands of power outages and road closings with record-low temperatures plaguing West Coast regions. In the South, many states are experiencing their highest-ever recorded temperatures in December. The contrast between extreme cold and heat throughout the U.S. has urged the NWS Storm Prediction Center to announce a ‘critical fire weather’ warning for the Plains, Texas, and Oklahoma. Read more in Axios.