Robinhood is a financial services company that offers commission-free stock, options, ETF, and cryptocurrency trades, making it extremely attractive to Gen Z and millennial investors. Given the massive popularity of the stocks listed on the platform, it could be wise to buy Robinhood stocks Taiwan Semiconductor Manufacturing Company Limited (TSM), Pfizer Inc. (PFE), General Motors Company (GM), and Nokia Oyj (NOK), which possess solid fundamentals.
Established in 2013, Robinhood Markets, Inc. (HOOD) is a fintech company that operates as an online discount brokerage platform. Robinhood is one of the most popular brokerages in the United States and is extremely popular among tech-savvy and young retail traders, thanks to a no-fee model and easy-to-use trading experience with a streamlined interface.
HOOD has net cumulative funded accounts of 23 million and approximately 11.4 million monthly active users as of December 31, 2022. The company’s assets under custody stood at $62 billion.
On December 6, 2022, the popular financial services company entered the retirement savings space with the launch of Robinhood Retirement. With this, users will receive an extra 1% added to their individual retirement account (IRA) on eligible contributions up to the annual contribution limit. Also, customers can now open multiple Robinhood accounts for the first time.
While stocks traded through HOOD’s platform are considered popular, not all stocks are fundamentally sound. However, I think one could capitalize on the popularity of TSM, PFE, GM, and NOK because of their fundamental strength.
Let’s have a detailed look at these stocks:
Taiwan Semiconductor Manufacturing Company Limited (TSM)
Headquartered in Hsinchu City, Taiwan, TSM manufactures, tests, and markets integrated circuits and other semiconductor products globally. The company’s products are used in automotive electronics, high-performance computing, mobile devices, and the internet of things markets.
On February 14, 2023, TSM’s board of directors authorized a $3.50 billion capital injection plan for the Arizona factory. The company tripled its initial $20 billion commitment for the Arizona chip facility in December, bringing it to $40 billion. This marks one of the biggest foreign investments in American history. The company could benefit significantly by expanding its business operations in the United States.
On December 29, 2022, the company announced that its 3nm technology had achieved volume production with good yields, which was duly celebrated with the topping ceremony of its Fab 18 Phase 8 facility. The company believes 3nm technology could generate end products worth a staggering $1.50 trillion within five years of achieving volume production.
TSM’s net revenue increased 42.8% year-over-year to $19.93 billion in the fourth quarter that ended December 31, 2022. Its gross profit grew 68.7% from the prior year’s quarter to $12.40 billion. Its income from operations came in at $10.36 billion, up 77.8% year-over-year.
In addition, the company’s net income and EPS increased 77.8% and 78% year-over-year to $9.43 billion and $0.36, respectively.
The consensus revenue estimate of $90.18 billion for the fiscal year (ending December 2024) reflects a 20% year-over-year improvement. Likewise, the consensus EPS estimate of $6.94 for the same year indicates a 22.7% increase from the previous year. Moreover, TSM has an impressive earnings surprise history as it surpassed the consensus EPS estimates in all four trailing quarters.
Shares of TSM have gained 11.2% over the past six months to close the last trading session at $86.70.
TSM’s promising fundamentals are apparent in its POWR Ratings. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
TSM has an A grade for Quality and Momentum. It also has a B grade for Sentiment. In the B-rated 91-stock Semiconductor & Wireless Chip industry, it is ranked #18.
Beyond what we stated above, we also have TSM’s Growth, Value, and Stability ratings. Get all TSM ratings here.
Pfizer Inc. (PFE)
PFE discovers, develops, manufactures, distributes, and sells biopharmaceutical products worldwide. It offers medicines and vaccines in various therapeutic areas. The company serves wholesalers, retailers, hospitals, clinics, government agencies, and disease control and prevention centers.
On March 13, 2023, PFE and Seagen Inc. (SGEN) entered a definitive merger agreement under which Pfizer would acquire Seagen, which is a biotechnology business that discovers, develops, and commercializes revolutionary cancer medicines, for $229 in cash per Seagen share, for a total enterprise value of $43 billion.
This acquisition is expected to bolster PFE’s capabilities in the field of cancer therapies.
On March 10, PFE announced that the FDA had approved ZAVZPRETTM (zavegepant), the first and only calcitonin gene-related peptide (CGRP) receptor antagonist nasal spray for the immediate treatment of migraine with or without aura in adults. It marks the company’s achievement in bringing a new and innovative treatment option for migraine patients.
For the fourth quarter that ended December 31, 2022, PFE’s revenues came in at $24.29 billion, up 1.9% year-over-year. Its income from continuing operations increased 39.7% year-over-year to $5 billion. Also, adjusted net income attributable to PFE common shareholders came in at $6.55 billion, up 44.2% year-over-year, while its adjusted EPS grew 44.3% year-over-year to $1.14.
Analysts expect PFE’s revenue for fiscal 2024 to increase 2.8% year-over-year to $70.98 billion. The company’s EPS is expected to grow 15.1% year-over-year to $3.93 for the same period. Furthermore, PFE has surpassed the consensus EPS estimates in all four trailing quarters.
The stock has gained 1.6% over the past five days to close the last trading session at $40.28.
PFE’s strong fundamentals are apparent in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system.
PFE has an A grade for Value and a B for Quality. It is ranked #18 out of 168 stocks in the Medical – Pharmaceuticals industry.
In addition to the POWR Ratings I’ve highlighted, you can see PFE’s ratings for Growth, Sentiment, Stability, and Momentum here.
General Motors Company (GM)
GM designs, builds, and sells trucks, crossovers, cars, and automobile parts; and provides software-enabled services and subscriptions worldwide. The company operates through GM North America; GM International; Cruise; and GM Financial segments.
On February 21, 2023, GM’s subsidiary GM Defense LLC, and the Tawazun Council, a UAE government entity that supports defense and security investments and promotes innovation and R&D in the defense industries, signed a collaborative Memorandum of Understanding (MOU) as the first step toward a formal partnership to develop future products in the areas of advanced mobility and power solutions.
GM Defense will leverage the commercial technologies of its parent company, GM, and the battery electric investments made by GM to bring innovation to global defense and government customers.
On February 9, GM and GlobalFoundries (GFS) announced a strategic, long-term agreement establishing a dedicated capacity corridor exclusively for GM’s chip supply. Through this first-of-its-kind agreement, GFS will manufacture for GM’s key chip suppliers at its advanced semiconductor facility in upstate New York, bringing a critical process to the United States.
GM’s revenue increased 28.4% year-over-year to $43.11 billion for the fiscal fourth quarter that ended December 31, 2022. The company’s adjusted EBIT rose 33.8% from the year-ago value to $3.80 billion. In addition, net income attributable to stockholders grew 14.8% year-over-year to $2 billion, while its adjusted EPS rose 57% from the prior-year quarter to $2.12.
Street expects GM’s revenue to grow 12.2% year-over-year to $40.13 billion in the second quarter (ending June 2023). Also, the company’s EPS for the same quarter is expected to increase 41.4% year-over-year to $1.61. Additionally, it has topped the consensus EPS estimates in three of the trailing four quarters.
GM’s shares have gained 1.5% year-to-date to close the last trading session at $34.33.
GM’s POWR Ratings reflect this strong outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system.
GM has a B grade in Growth, Sentiment, Momentum, and Value. The stock is ranked #20 out of 58 stores in the Auto & Vehicle Manufacturers industry.
Click here to access the additional ratings for GM for Quality and Stability.
Nokia Oyj (NOK)
NOK offers products and services for radio access networks covering technologies from 2G to 5G and microwave radio links for transport networks. The company operates through four segments: Mobile Networks; Network Infrastructure; Cloud and Network Services; and Nokia Technologies. It is headquartered in Espoo, Finland.
On February 28, 2023, NOK won a deal with MTN South Africa to deploy its comprehensive AirScale portfolio to modernize and expand MTN’s 5G radio network for superior coverage and capacity. Additionally, it won a new 10-year 5G deal with Antina to enhance the existing 5G network infrastructure throughout Singapore.
These deals should improve the 5G connectivity experience for businesses and consumers with high bandwidth, ultra-fast speeds, and low latency, thereby driving digitalization and expansion of NOK’s footprint across Africa and Singapore.
On February 26, NOK launched anyRAN, a revolutionary approach to help mobile operators and enterprises choose purpose-built, hybrid, or Cloud RAN solutions regardless of business model. Through this, the company strengthens partnerships with cloud and data center infrastructure leaders, offering end customer flexibility and choice in selecting Cloud RAN solutions.
Also, on February 14, NOK and Kyndryl Holdings, Inc. (KD), the world’s largest IT infrastructure services provider, announced a three-year extension and expansion of their global network and edge partnership, with a focus on developing and delivering industry-leading LTE and 5G private wireless services and Industry 4.0 solutions to customers worldwide.
The powerful, expanding relationship between NOK and KD is a unique combination of vertical and horizontal capabilities and it offers IT, OT, and business leaders' access to the innovation, tools, and expert resources they need to digitally transform their operations.
NOK’s net sales increased 16.1% year-over-year to €7.45 billion ($7.93 billion) in the fourth quarter that ended December 31, 2022. Its operating profit grew 19.2% from the year-ago value to €882 million ($938.51 million). The company’s profit for the period grew 363.5% year-over-year to €3.15 billion ($3.35 billion), while its EPS rose 366.7% from the prior-year quarter to €0.56.
Analysts expect NOK’s revenue and EPS for the first quarter (ending March 2023) to increase 9.5% and 10.9% year-over-year to $6.15 billion and $0.08, respectively. Moreover, the company has surpassed the consensus revenue estimates in all four trailing quarters.
The stock has declined 5.1% over the past month to close the last trading session at $4.49.
Unsurprisingly, NOK has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
The stock has an A grade for Value and a B for Growth, Momentum, and Sentiment. Among the 50 stocks in the B-rated Technology – Communication/Networking industry, it is ranked #5.
To access additional ratings of NOK for Stability and Quality, click here.
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TSM shares were trading at $86.74 per share on Thursday morning, up $0.04 (+0.05%). Year-to-date, TSM has gained 16.45%, versus a 1.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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