General Motors (NYSE:GM), PayPal Holdings (NASDAQ:PYPL), and Broadcom (NASDAQ:AVGO) are among the hotly discussed stocks on the popular social media platform Reddit. While these stocks are buzzing on Reddit and have gained mentions, TipRanks’ Hedge Fund Trading Activity tool (which provides hedge fund signals based on the latest data from Form 13-F) shows that hedge fund managers sold these stocks in bulk.
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It is worth noting that hedge funds, on average, have a tendency to outperform broader market averages with their returns. Therefore, monitoring the trading activity of hedge funds can be beneficial for retail investors. Against this backdrop, let’s zoom in on these buzzing Reddit stocks.
What is the Future of GM Stock?
GM stock has a negative signal from TipRanks’ Hedge Fund Trading Activity tool. The tool shows that hedge funds sold 10.4 million shares of General Motors last quarter. Several hedge fund managers, including Cathie Wood of Ark Innovation ETF (ARKK), Ric Dillon of Diamond Hill Capital Management, and Boykin Curry of Eagle Capital Management, reduced their holdings in GM stock.
While hedge funds lowered their exposure to GM stock, Wall Street analysts are cautiously optimistic about its prospects. GM’s aggressive transition towards an all-electric future and pact with Tesla (NASDAQ:TSLA) to leverage its supercharging network are keeping analysts optimistic.
Overall, GM stock has received six Buy and five Hold recommendations for a Moderate Buy consensus rating. Analysts’ average price target of $46.90 implies 21.63% upside potential.
Is PayPal Stock Good to Buy?
Like GM, hedge funds sold PayPal stock in bulk. Overall, PayPal stock has a negative signal from the Hedge Fund Trading Activity tool. Per the tool, hedge funds sold 7.8 million shares of PayPal. Louis Moore Bacon of Moore Capital Management and Andrew Law of Caxton Associates were among several hedge fund managers who lowered their exposure to PYPL stock.
While PayPal is the leading payments network with a solid balance sheet, increased competition, pressure on transaction margins, and concerns around account growth keep analysts cautiously optimistic about the stock.
PYPL stock has 21 Buy and 12 Hold recommendations, reflecting a Moderate Buy consensus rating on TipRanks. At the same time, analysts’ average price target of $90.85 indicates 36.15% upside potential from current levels.
Is AVGO a Good Stock to Buy Now?
Broadcom stock has increased significantly year-to-date on the back of strong financial performances and a growing market share in the chip industry. Thanks to its solid financials, AVGO stock has 14 Buys and two Holds, translating into a Strong Buy consensus rating. However, given the recent rally, analysts’ average price target of $867.6 is in line with its current market price.
Furthermore, AVGO stock has a negative signal from hedge fund managers, who sold 436.3K shares in the last quarter. First Pacific Advisors’ Richard Atwood, Morningstar Investment Management’s Kunal Kapoor, and several other hedge fund managers sold AVGO stock.
Bottom Line
The reduction of holdings by hedge fund managers in stocks could be perceived as a negative sign in the short term. However, retail investors should never judge a stock based on one or two parameters. Investors can leverage TipRanks’ Experts Center tools to make an informed investment decision.
