2 Bad Stocks Robinhood Investors Are Still Buying
Robinhood investors are known to be a bit more risk-taking than an average investor. The platform appeals to millennials, and its commission-free trading service entices people to invest even small amounts of money easily. When there's less money at stake, it can be easier to take on risks. Some researchers also believe the app encourages frequent trading (for example, it displays confetti when trades are made).
Unfortunately, high-frequency trading doesn't leave much room for thoughtful analysis of stocks, and it can lead people to buy risky investments. Two of the riskiest among the top stocks on Robinhood today are Cronos Group (NASDAQ: CRON) and American Airlines (NASDAQ: AAL). These are stocks that were among the most popular even back in March, before the market crash, and they're still making the list today. Here's why they are bad investments that you should steer clear of.
Cannabis company Cronos is a bad buy for numerous reasons. For one, it's just not worth its current $2 billion valuation. That's richer than Aphria ($1.4 billion) and considerably higher than Aurora Cannabis ($809 million). And yet, Cronos's total revenue for the past four quarters was just more than $31 million. By comparison, Aurora has generated sales of 305.7 million Canadian dollars in the trailing-12-month period ($232.4 million), and Aphria has brought in revenue of CA$369.2 million ($280.6 million) in the same time frame. Cronos is just not generating enough market share to make it a better buy than other Canadian pot stocks.
Source Fool.com
