The Swaggy Letter 2.0

Swaggy’s Top Stonks. We compile and analyze data from multiple sources bringing you the top trending tickers from around the internet. If you haven’t subscribed already, please do so below.

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Welcome newcomers to Swaggy's Top Stonks and thank you for subscribing.

This is the Swaggy Letter 2.0, a newsletter with a focus on visualizing data versus our traditional market commentary. In each letter we'll emphasize 3-5 charts that will be able to give you an understanding of what's trending, why, and provide a look at some of the fundamentals behind each ticker.

For a deeper dive into the data, we've got a great premium newsletter that really elaborates on retail sentiment and analytics. It's only 10 bucks a month, so get with it.

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Today's Letter

• Top Meme Stocks vs Top "General Investing Ideas" of 2022.

• Breaking them down by sector, and performance vs SPY.

• The two baskets of stocks, how they differ from each other.

• How good were the "analyst" calls on these names?

Top Meme Stocks vs Top "General Investing Ideas" of 2022

Here we are with the top 10 "meme stocks" mentioned on WallStreetBets in all of 2022. I included the mentions of CPI (inflation) and Oil (energy prices) that were a hot topic throughout the year.

We saw a different story in the top 10 general stocks names, which consisted of a lot more FAANG mentions.

Top 100 Lists - Broken down by sector

When broken down by sector (non-weighted), the top 100 lists for both categories, meme stocks and general investing ideas, were very similar in their composition. Some general conclusions that can be drawn are:

• Tech was the fan favorite of retail traders in both baskets of stocks.

• "General stocks" had a higher presence in the financial sector. This is probably due to the inclusion of more dividend-paying bank names.

• The rest had insignificant differences.

One interesting thing to note was the fact that the energy sector was weighted so low in both baskets. Although the term "Oil", relating to energy prices, was mentioned at the top of both lists, investors never really mentioned which stocks were good buys to take advantage in these moves. That's probably due to retail investors not knowing how to invest in futures contracts and also most likely lacking the interest to invest in the energy sector.

The Retail Trade - 2022 Performance VS SPY

Interestingly, the "meme stock" basket performed only marginally worse compared to the "general investing ideas" themed basket (-33% for meme stocks, -30% for general stocks). This is against the SPY's -15.5% return in the last 365 days, or -18% for 2022.

One would think the performance of the WallStreetBets basket would be abysmal, but sitting at only -33% compared to the SPY's -15.5%, it really wasn't that bad. So I've drawn several conclusions about the data.

1. Retail traders, whether from WallStreetBets, Reddit, or Twitter, show interest in mainly the same companies. It's how they trade them that differs, such as WallStreetBets members utilizing options for max gains and losses, versus the rest of the world more interested in buying shares.

2. The "general" stocks basket had more blue chip mentions at the top, but as we go down the ranks of mentions we see they love growth names just as much as your every day WSB trader.

3. A lot of growth names are also found in Cathie Wood's ARK ETFs, which IMO has played a large role in this new generation of DIY investors and stock pickers.

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Top Meme Stocks

When looking at the top 100 stocks in both categories, the all-inclusive baskets of stocks were pretty similar.

For the WSB stocks compared to "general" stocks basket, we find:

• WSB stocks had 41/100 profitable companies versus 46/100 for "general" stocks.

• Average PE was quite high, 48x for WSB stocks, but "general" stocks wasn't too far behind at only 41x. Average PE of stocks in the S&P500 is 21. This is the biggest sign that retail traders are simply drawn to riskier assets.

• 31/100 stocks in the WSB list offered dividends versus 47/100 in the less volatile basket.

• The growth companies of WSB had average negative EPS growth (QoQ) of -67% versus the "general" stocks list which had an average EPS growth of -56%.

• Average analyst recommendation for BOTH baskets of stocks was actually a "buy rating" this is interesting and I'll break that down below.

Price Targets - How accurate are they?

How accurate were analyst price targets on retail's top 25 favorite stocks of 2022? I don't want to tattle-tale, but lets just say not very accurate.

An analyst specializes in a single industry and sector, yet they frequently seem unable to get it right. Is it negligence or is it simply a lack of effort with no repercussion of being wrong?

I've taken the top 25 stocks loved by retail then looked at their average analyst's price target and compared to their share price today. Granted, these price targets are usually several years out, but the fact that most are 30-40% below their target means they require phenomenal returns in the upcoming years.

Interestingly enough the only companies that are above their average price targets are AMC, BBBY, GME, and NFLX.

That's all for today's letter. Stop fumbling the bag and buying meme-stocks at the top. Know what you're getting into and upgrade to premium.

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