UBS has compiled a list of stocks favored by retail investors that it believes will keep rising, including Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report, Etsy (ETSY) - Get Etsy, Inc. Report and Advanced Micro Devices (AMD) - Get Advanced Micro Devices, Inc. Report.
The bank filtered for variables including retail trade flows, call and put imbalances based on weekly expirations and Twitter sentiment.
“Aggregating these metrics into a single retail score, we find that these variables combined can provide a useful signal for future stock returns,” UBS equity strategist Keith Parker wrote in a report cited by CNBC.
Stocks with retail rankings in the top percentile have historically outperformed those in the bottom two percentiles by an average of 5.5% over the following three months, UBS found.
“Retail participation remains elevated despite the lapsing of stimulus and reopening of the economy,” Parker said, adding that retail trading volume is up 80% from three years ago.
Norwegian Cruise and Etsy topped the UBS list with retail signal scores of 100%. Next came AMD at 99%, United Airlines (UAL) - Get United Airlines Holdings, Inc. Report at 98%, Royal Caribbean Cruises (RCL) - Get Royal Caribbean Group Report at 98%, Nvidia (NVDA) - Get NVIDIA Corporation Report at 98%, MGM Resorts (MGM) - Get MGM Resorts International Report at 98%, Tesla (TSLA) - Get Tesla Inc Report at 97%, Macy's (M) - Get Macy's Inc Report at 97%,
Occidental Petroleum (OXY) - Get Occidental Petroleum Corporation Report at 97%, APA (APA) - Get APA Corp. Report at 97%, Dick's Sporting Goods (DKS) - Get Dick's Sporting Goods, Inc. Report at 97%, PVH (PVH) - Get PVH Corp. Report at 96%, Clorox (CLX) - Get Clorox Company Report at 96%, Boeing (BA) - Get Boeing Company Report at 96% and Southwest Airlines (LUV) - Get Southwest Airlines Co. Report at 96%.
Norwegian Cruise recently traded at $23.21, up 0.51%; Etsy at $288.47, down 2%; AMD at $160.65, up 3%; United at $46.90, up 2%; Royal Caribbean at $80.80, up 0.41%; and Nvidia at $344, up 4%.