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.