Meme stocks are grabbing the spotlight once again and Bank of America said to watch out for a handful of new names seeing a pick-up in chatter.
So-called Reddit stocks came back from the dead with double-digit rallies this week, as investors pour back into speculative names with the stock market near record highs. Shares of GameStop soared nearly 16% on Wednesday, pushing its gains this week to 37%. Another Reddit target, AMC Entertainment, rallied more than 19%, bringing its weekly advance to more than 60%. Both were in the green again Thursday.
Bank of America is identifying the potential up-and-coming WallStreetBets targets by analyzing for clients how many mentions each stock gets on Reddit, among other things like short interest.
“We believe some of the new retail activity may be here to stay given zero commissions, more time at home, and high savings rates – but we do expect a moderation this year amid peak stimulus, re-opening and any potential regulatory action,” Bank of America equity and quant strategist Jill Carey Hall told clients in a note.
Bank of America gave clients a list of the top small-to-mid cap stocks to watch during the return of the meme stock craze. The listed names have the most mentions on Reddit and short interest above the 5% average for the S&P 500.
Take a look at the list here.
