The markets are entering the last quarter of another eventful year for equities as an asset class. Without doubt, the year will be remembered for Reddit and Meme stocks. It’s also a year when Robinhood (NASDAQ:HOOD) trading platform gained significant traction as millennials took a plunge into stock trading. In general, meme stocks were among the top traded Robinhood stocks.

However, as we head into Q4 2021, I am focused on some non-speculative Robinhood stocks. I believe that these names are positioned for a rally in the coming months with one of few positive catalysts on the horizon.

Let’s look at seven Robinhood stocks that look poised for a rally in Q4 2021.

  • Novavax (NASDAQ:NVAX)
  • JetBlue Airways (NASDAQ:JBLU)
  • Chevron (NYSE:CVX)
  • Target (NYSE:TGT)
  • Altria (NYSE:MO)
  • Coinbase (NASDAQ:COIN)
  • Alibaba Group (NYSE:BABA)

An important point to note is that historical data from 1928 to 2020 indicate that Q4 is a good time to remain invested. Index returns have averaged 0.4% in October, 0.9% in November and 1.3% in December.

7 Top Robinhood Stocks to Buy Heading Into Q4: Novavax (NVAX)

NVAX stock has already surged by 117% this year. But a further rally seems likely with a robust growth outlook for 2022.

In August 2021, Novavax and the European Commission announced a purchase agreement for 200 million doses of the Covid-19 vaccine. Novavax has also reached an agreement with the Government of Japan to provide 150 million doses of the vaccine.

Additionally, Novavax is focused on low-income countries. The company has filed for emergency use authorization in India, Indonesia and the Philippines. The final regulatory submission in the United States is also due in the last quarter.

Clearly, Novavax seems positioned for strong growth in the coming years. As its order book swells, the stock is likely to trend higher.

Novavax is already undertaking clinical trials for a combination of the Covid-19 and seasonal influenza vaccine. If trails deliver positive results, the combination is likely to be a source of steady long-term cash flows.

An important point to note is that Novavax ended Q2 2021 with cash and equivalents of $2.1 billion. This provides the company with flexibility for manufacturing expansion and investment in clinical trials. The company has an attractive pipeline of potential vaccines for SARS, Ebola, respiratory syncytial virus and MERS.

JetBlue Airways (JBLU)

After surging to highs of $21.96 in March 2021, JBLU stock has corrected to current levels of $15. However, I believe that the stock is due for a reversal in the coming months.

In terms of the pandemic impact, there are two points to note. First and foremost, latest data indicates that at least 75% of the U.S. population have received at least one dose of the Covid-19 vaccine. Furthermore, Covid-19 cases in the United States have started to dip from the latest peak.

With the holiday season coming, that’s all good news for JetBlue. I also like the airline company from a financial perspective. As of Q2 2021, JetBlue reported adjusted-debt-to-capital-ratio of 55%. Further, the company has a liquidity buffer of $3.7 billion.

With a healthy balance sheet, the company is positioned for growth as the airline industry witnesses gradual revival. It’s worth noting that the company has already announced 32 new routes this year. At the same time, the company has a pipeline of fleet expansion through 2027.

Therefore, as capacity utilization improves, JetBlue is positioned to deliver healthy EBITDA margin. The company has already undertaken cost cutting measures, which will have a positive impact in the coming quarters. Overall, JLBU stock seems positioned for a strong reversal from current levels.

Chevron (CVX)

CVX stock has been sideways to lower over the past six-months. The last quarter of the year marks the beginning of the heating season. In general, this translates into higher demand for oil and gas. It seems very likely that the 5.58% dividend yield stock is poised for reversal in the last quarter.

Chevron is attractive from a fundamental perspective. As of Q2 2021, the company reported a net-debt ratio of 21%. It’s also worth noting that for the quarter, the company reported operating cash flow of $7 billion. With oil prices remaining firm, the company is positioned for annualized OCF of $28 to $30 billion.

Another important point to note is that the company reduced debt by $2.5 billion in the last quarter. With strong cash flows, Chevron is positioned to sustain dividend and deleverage.

As of December 2020, Chevron also had reserves of 11.1bboe along with 84.1bboe in resources. With low-break even assets and a long reserve life, CVX stock is attractive at a forward price-to-earnings-ratio of 14.5.

Strong financial flexibility also allows Chevron to invest in the renewable energy segment. In the next few years, the company plans to ramp-up production of renewable natural gas, diesel and biodiesel.

Target (TGT)

The U.S. economy is largely driven by consumption spending. In the last quarter of the year, retail spending generally accelerates thanks to the approaching holiday season.

TGT stock looks attractive among general merchandise retailers. After touching a high of $267, the stock has corrected to current levels around $243. Gradual accumulation can be considered now that the company is building a strong omni-channel presence.

For Q2 2021, Target reported healthy comparable store sales growth of 8.9%. Digital sales were also boosted by same-day delivery.

Target has also been aggressively remodeling its stores. The company is on track to complete 140 remodels this year. At the same time, the company has been opening smaller format stores. This helps expand reach and further boost sales from drive-up, order pick-up and shipments.

With strong growth numbers and cash flows, Target also increased quarterly dividends by 32% in June 2021. TGT stock currently offers an annualized dividend of $3.6, which translates into a dividend yield of 1.47%.

Even after an upside of 38% for year-to-date 2021, TGT stock trades at an attractive price-to-earnings-ratio of 18.8. Renewed upside seems likely heading into Q4 2021.

Altria (MO)

After an extended period of consolidation around $40 levels, MO stock has started trending higher. There are several reasons to believe the upside is likely to sustain.

Recently, Altria increased quarterly dividends by 5% to 90 cents per share. At a dividend yield of 7.19%, the stock is likely to attract income investors. Further, MO stock is trading at a forward P/E of 10.85. Valuations are attractive and the stock has a low beta.

It’s also worth noting that Altria has 35% stake in Juul Labs, though the Food & Drug Administration is likely to need additional time to decide if the brand e-cigarette can be sold in the U.S. But a positive outcome will translate into meaningful upside for MO stock.

Altria is also in a business transformation phase with focus on non-combustible products. However, the cigarette segment is likely to remain the cash flow machine in the coming years.

The company also has stake in Cronos (NASDAQ:CRON). The possibility of Federal level legalization of cannabis is another factor that could serve as an upward catalyst.

Coinbase (COIN)

COIN stock has remained depressed after a stellar listing. However, the company’s quarterly numbers have remained robust. Given wider adoption of cryptocurrencies, Coinbase is positioned to deliver healthy cash flows.

Cathie Wood recently reiterated her long-term target of $500,000 for Bitcoin (CCC:BTC-USD). A key reason cited was growing institutional interest in the cryptocurrency. It’s also worth noting that even with a possible rate hike in 2022, real interest rates are likely to remain negative. This will support upside in asset classes like gold and Bitcoin.

For Q2 2021, Coinbase reported revenue of $2 billion and an adjusted EBITDA of $1.2 billion. Further, excluding custodial funds due to customers, the company’s operating cash flow for the first half of 2021 was $2.2 billion. Clearly, the business has robust EBITDA margin and cash flows.

A key highlight in Q2 2021 results was that the company has over 9,000 financial institutions as clients. Coinbase also added 29 new assets for trading during the quarter. As the number of assets increase, the trading volume is also likely to swell.

In more recent news, Coinbase announced a private offering of $1.5 billion Senior Notes. The company expects to utilize the proceeds for product development and potential mergers. Any inorganic growth news can serve as another stock upside trigger.

Alibaba Group (BABA)

I’m including BABA stock in my list of Robinhood stocks to buy as a contrarian pick. Alibaba stock has remained depressed for an extended period but it seems the worst might be over.

It was recently reported that China’s state-backed firms are likely to take stake in Ant Group assets. If the speculation proves true, it could pave the way for Ant Group’s initial public offering (IPO). Alibaba has also pledged to invest $15 billion in a “common prosperity drive.” These might be early indicators that the differences with regulators are being ironed-out.

It’s worth noting that Alibaba has continued to report healthy growth in its core ecommerce business. The company’s presence in Southeast Asia is likely to ensure that strong revenue growth sustains.

Further, the company’s cloud business has also reported positive EBITDA for the second consecutive quarter. As EBITDA margin expands in the next few quarters, the stock is likely to trend higher. Alibaba also has high financial flexibility to pursue aggressive organic and acquisition driven growth.

Investors should consider some exposure to BABA stock. The core business remains strong and it’s a good time to be greedy when markets are fearful.

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