4 meme stocks that recently popped and could have much more upside in the days ahead — including one linked to Apple’s iPhone event this week — according to a veteran portfolio manager and analyst

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Maybe meme stock investing is mellow in its old age.

After almost a year of highs and lows, intense attention, and sometimes frenzied activity, meme stock traders on Reddit and Twitter are showing greater restraint and intelligence, according to Mary Ellen McGonagall of the educational stock trading platform Simpler Trading.

“The ones that are popping, that are seeing activity, there are sound reasons,” said McGonagle. She’s advised portfolio managers at hedge funds and mutual funds for 20 years, and previously advised William O’Neil at his namesake firm. At Simpler Trading, she’s the senior managing director of stocks and writes its MEM Edge report.

“A lot of what we saw back January, February may have thinned out the herd a bit as far as a lot of people getting burned,” McGonagle said. “Maybe the people that are left behind are a little more sophisticated.”

She adds that meme stock investing remains highly speculative, and that means anyone who wants to trade those companies needs to think hard about when they will want to get out — and stick to whatever plan they make. But she says that real market calls and strategies are replacing the ‘stick it to Wall Street’ ethos of early 2021.

McGonagle told Insider that these meme stocks, which either surged earlier this year or are on a hot streak today, could be on track for further outperformance because each one has a solid, if uncertain, investment thesis behind its move.

(1) Globalstar

As of Friday, the satellite provider was up almost 700% in 2021. It’s made huge gains in September after analyst Ming-Chi Kuo of TF International Securities said that the company might partner with Apple on the next iPhone.

“He came out and posted that Apple’s new iPhones that are due to be coming out, that they will support satellite communications,” McGonagle said. “It allows the user to place calls in areas that have little or no coverage. So with that, Apple will need to partner with a satellite provider, and that’s where GSAT comes in.”

Apple is scheduled to unveil the new phone and its features on Tuesday, and McGonagle says that if he’s correct and the company discloses a partnership with Globalstar, the stock would have much further to run even after its strong performance.

“You have to figure if they partner with a firm of Apple’s stature, it would greatly increase their potential revenues and then consequently their valuation,” she said.

(2) Vinco Ventures

Vinco is another favorite in the meme stock world. It’s heavily shorted, but is also up 650% this year after it announced a combination with Zash Global Media and then bought a short-video platform called Lomotif that it sees as a competitor to TikTok.

Shareholders will vote on the Vinco-Zash deal on October 14. If that tie-up is approved, the companies will spin off a blockchain technology and non-fungible token business called CrypTyde. That part of the plan is responsible for a lot of the recent enthusiasm, according to McGonagle.

“If you are a shareholder of BBIG, one share of that will afford you one share of this Bitcoin miner CrypTyde,” she said.

(3) Gevo

Renewable chemicals and biofuels company Gevo jumped after it announced a partnership with Chevron, which McGonagle described as “huge news” because that kind of bump can be a lifeline to a small company.

“That is certainly going to give it more in the way of potential upside,” she said. Still, the stock is trading around $7 and was valued at twice that much in February.

It also helps that a major Wall Street investment bank, Stifel, started covering Gevo in late August and assigned it a $10 price target. That might prove to be a more sustainable form of support than the enthusiasm of meme stock traders.

“These institutions are going to have longer term outlooks in their investment horizon,” McGonagle said.

(4) Support.com

Despite a sell-off Friday and a 40% downturn this month, the tech support and anti-spyware company has soared 950% this year. A major reason is its own crypto-related deal, a merger with bitcoin miner Greenidge Generation Holdings announced in March.

McGonagle says the stock sold off after it became seriously overbought, and now she sees signs it’s ready for a comeback.

“It’s going to be all about the volume and whether it breaks up above what could be resistance,” she said. “We are getting both of those factors, so that’s what leads me to believe in the super near term we could see a further upside.”

Source: https://www.businessinsider.com/