While investment ideas derived from social media platforms tend to have a high-risk reputation, some of the best meme stocks to buy present rather sensible profiles. In other words, you can envision a typical financial advisor speaking well of these enterprises. This just proves that you can’t judge a book by its cover.
Another reason to consider meme stocks with fundamentals centers on the broader enthusiasm of the retail investor community. Prior to the Covid-19 pandemic, financial advisors bemoaned that millennials weren’t getting involved in the market. Now, they are and it’s possible that this sentiment shift may be permanent. Thus, the increased attention to the equities sector may lift all boats.
Finally, millennials and also older members of Generation Z enjoy rising spending power. Therefore, the securities they like should theoretically see price appreciation. Therefore, here’s my list for meme stocks 2023 (that actually makes sense).
| AAPL | Apple | $168.54 |
| NVDA | Nvidia | $282.10 |
| MAR | Marriott | $178.61 |
| CAT | Caterpillar | $215.15 |
| CVX | Chevron | $160.04 |
| AMZN | Amazon.com | $103.63 |
| IBKR | Interactive Brokers | $74.13 |
Meme Stocks to Buy: Apple (AAPL)
As a consumer technology giant, Apple (NASDAQ:AAPL) offers a sensible – if not boring – idea for the best meme stocks to buy. For years, marketing professionals identified Apple as a brand powerhouse. To this day, the tech stalwart continues to enjoy the status of the most valuable brand in the world. Whether we’re dealing with pandemics or bank runs, consumers can’t get enough of Apple’s digital devices.
On the financial side, Apple brings plenty of firepower to the table. Operationally, the company commands a three-year revenue growth rate of 20%, above 86.44% of sector rivals. Also, it posts a free cash flow (FCF) growth rate of 29.2%, beating out 76% of its peers.
On the bottom line, Apple prints a trailing-year net margin of 24.56%, outpacing nearly 96% of rivals. It’s also consistently profitable over the past 10 years. Finally, Wall Street analysts peg AAPL as a consensus strong buy. However, the average price target of $174.85 implies only 3% upside potential.
Meme Stocks to Buy: Nvidia (NVDA)
As a tech firm that garnered fame for its graphics processing units (GPUs), it’s no surprise that Nvidia (NASDAQ:NVDA) ranks among the best meme stocks to buy. Sure, these GPUs undergird video gaming applications, which obviously appeal to millennials and Gen Z. At the same time, its processors support other far-reaching endeavors such as data centers and artificial intelligence.
Financially, Nvidia benefits from significant strengths in the balance sheet, particularly its stratospheric Altman Z-Score of 23.39. This stat indicates high fiscal stability and a low risk of imminent bankruptcy. On the operational side, Nvidia posts a three-year revenue growth rate of 34.5%, above 87.72% of companies listed in the semiconductors industry.
For profitability, its trailing-year net margin pings at a strong 16.19%, above 70.56% of rivals. However, a noticeable drawback is the forward multiple of 61.73, which is very overpriced. Unsurprisingly, analysts peg NVDA as a consensus strong buy. However, their price target of $286.94 implies a little over 3% upside potential.
Meme Stocks to Buy: Marriott (MAR)
Breaking away from the tech-oriented meme stocks to buy, Marriott (NASDAQ:MAR) presents intrigue for market participants. Notably, Gen Z desires experiences over more tangible achievements that prior generations aimed for. Thus, some market analysts believe that young folks will help spark a travel resurgence, especially since virtually all jurisdictions have relaxed their Covid-mitigation protocols.
Financially, Marriott presents somewhat of a mixed bag. On paper, its balance sheet appears rather challenged, particularly its cash-to-debt ratio of 0.05. That’s worse than about 89% of the competition. However, the pandemic did a number on the space. On a more positive note, Marriott’s three-year revenue growth rate comes out to 0.7%, which actually beats out nearly 65% of its peers.
On the bottom line, Marriott enjoys a trailing-year net margin of 11.35%, above 74% of companies listed in the travel and leisure space. Thus, it could be one of the meme stocks with potential, especially if Gen Z shows up. Analysts peg MAR as a consensus moderate buy. Their average price target lands at $183.18, implying over 8% upside potential.
Caterpillar (CAT)
A rather surprising entry among the best meme stocks to buy, Caterpillar (NYSE:CAT) carries serious clout as a top manufacturer of construction equipment. Frankly, the idea seems rather boring for young investors but they’re also onto something. Aside from the infrastructure bill, several nations will look to rebuild following Covid’s disruption. Thus, Caterpillar could rise higher.
Interestingly, according to investment resource Gurufocus, CAT stock enjoys five good signs and no yellow or red flags. In my view, Caterpillar’s best attributes center on its profitability profile. For example, its operating and net margins ping at 14.86% and 11.28%, respectively. Both stats rank better than at least 87% of the competition.
However, one less-than-desirable feature may be its valuation. Right now, CAT trades at a forward multiple of 13.7, ranked worse than 61.36% of its peers. Analysts peg CAT as a consensus hold. Nevertheless, their average price target comes out to $240.47, implying nearly 10% upside potential.
Chevron (CVX)
One of the world’s biggest oil and natural gas companies, Chevron (NYSE:CVX) deserves to sit at the table of best meme stocks to buy. About a month ago, the oil cartel known as OPEC+ decided to impose a surprise production cut. Effectively, the cartel also proved that the Federal Reserve will not be the only entity to strongly influence the dollar. For investors, the hydrocarbon players suddenly got more interesting.
Despite operating in a somewhat controversial industry, CVX clearly ranks among the meme stocks with fundamentals. It enjoys a stout balance sheet, with an equity-to-asset ratio of 0.62 times, better than 66% of its peers. Operationally, Chevron’s three-year revenue growth rate pings at 18.1%, outflanking 69.72% of sector rivals.
On the bottom line, Chevron has a trailing-year net margin of 15.05%, beating out 68.62% of the competition. Aside from the Covid-disrupted 2020, it’s also consistently profitable. Finally, analysts peg CVX as a consensus moderate buy. Their average price target hits $190.44, implying 13% upside potential.
Amazon (AMZN)
Moving onto the riskiest segment of meme stocks to buy, Amazon (NASDAQ:AMZN) previously dominated the equities sphere. However, 2022 imposed heavy headwinds on AMZN, particularly due to skyrocketing inflation. With the consumer economy hurting, people didn’t open their wallets with vigor for discretionary products. As a result, even with AMZN’s strong performance this year, over the past 365 days, it’s down over 15%.
Still, AMZN may be worth a look for those seeking speculative meme stocks with potential. Despite the ravages of last year, Amazon still looks relatively decent. For instance, its three-year revenue growth rate comes out to 21.9%, above 84.38% of companies in the cyclical retail industry.
To be fair, its trailing-year net margin slipped to 0.53% below zero. However, with Amazon’s other relevancies in cloud computing and other tech spheres, it’s worth a wager for the gambling type. Lastly, analysts peg AMZN as a consensus strong buy. Their average price target stands at $137.62, implying almost 31% upside potential.
Interactive Brokers (IBKR)
In my opinion, Interactive Brokers (NASDAQ:IBKR) ranks as the riskiest idea for the best meme stocks to buy. With the Fed committed to tackling inflation by hiking the benchmark interest rate, circumstances don’t seem auspicious for market trading. At the same time, millennials and Gen Z may have sparked a paradigm shift in how they view money. So, it’s possible that IBKR could swing higher.
So far, shares have performed well, gaining 9% since the January opener. In the trailing year, IBKR impresses with a 30% return. On the financial side, it’s a bit of a wobbly picture. Conspicuously, its balance sheet seems weak. For instance, its Altman Z-Score of only 0.29 indicates distress and a higher risk of bankruptcy in the next two years.
On the plus side, Interactive’s consistently profitable. Its operating margin is also impressive at nearly 46%. As well, IBKR trades at 2.02 times FCF, which is significantly undervalued. Enticingly, analysts peg IBKR as a unanimous strong buy. Their average price target hits $111.40, implying over 43% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.