Meme stocks are loved for their popularity, high short interest and strong momentum. Investors have been paying attention to them since they were first introduced in 2011. It is risky to place a bet solely on the price performance of most meme stocks, as they have weak fundamentals. We believe it is better to avoid meme stocks Beyond Meat, Virgin Galactic (SPCE), Clover Health and Clover (CLOV) These stocks are rated ‘Strong Sell’ in our proprietary rating system. Keep reading.
Meme stocks have gained enormous popularity after the huge short squeezes suffered by GameStop Corporation and AMC Entertainment Holdings earlier in the year. Although meme trading was criticized by many analysts, it has been a topic of conversation on social media that led to other stocks with weak fundamentals seeing their stock prices skyrocket. Additionally, the U.S. Securities and Exchange Commission has made allegations that a fraud trading scheme was being used to invest in meme stocks.

The meme investing trend is still causing hedge funds’ conniptions. This year, hedge funds lost billions to retail investors in the battle for market dominance. Given that most meme stocks are overpriced, and it’s almost impossible to identify when to buy or sell them, we think investors should be judicious when picking a meme stock.

Our recommendation is to avoid meme stocks Beyond Meat, Inc., Virgin Galactic Holdings, Inc., and Clover Health Investors, Corp. CLOV, which have weak fundamentals and low growth prospects. These stocks have been rated ‘Strong Sell’ by our proprietary rating system.

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