It seems that in the popular imagination, the Millennial will always be that youngish Starbucks barista who could never quite get their financial life in order.
But while perception may be slow to change, the reality is that the Millennials are all grown up. Almost everyone in this generation is 30 or older. And while they’ve been a little slower than previous generations to settle down and start families, they have adopted other trappings of early middle age, such as stock investing
For a generation known for doing things its own way and projecting their values with their pocketbook, the stock portfolios of Millennials are remarkably conventional. Apex Clearing prepared its quarterly review of Millennial stock portfolios, and of the top 10 stocks held by Millennials, most would be just as likely to be found in the portfolio of a Baby Boomer or Gen-Xer.
Apple (AAPL) and Amazon.com (AMZN) come in as the first and second most popular stocks among Millennial investors, and Microsoft (MSFT), Facebook (FB), Disney (DIS), Netflix (NFLX) and Advanced Micro Devices (AMD) take fourth, fifth, sixth, eighth and ninth place, respectively. This is essentially a “who’s who” of standard S&P 500 companies.
Electric vehicle darling Tesla (TSLA) was the third most popular stock in Millennial portfolios, and it was really the only stock in the top 10 you could argue is stereotypically Millennial.
What’s far more interesting about the list, however, is which stocks have become more popular among Millennials across the year – indeed, some names have shot near the top of the list over the past few months, and several stocks previously not on Millennials’ radar have suddenly burst onto the scene.
Today, we’ll look at 16 of the most popular stocks among Millennials that have really caught their eye over the past few months. All have seen significant jumps in the rankings since the end of March, and several will likely surprise you.
Data is as of Sept. 10. Millennial stock ranking data provided by Apex Clearing.
- Rank: 31st
- Move from Q1: +20
Warren Buffett’s Berkshire Hathaway (BRK.B) also is a popular stock among Millennials, rounding out the top 10. Well, it turns out that one of Berkshire’s famously large holdings – at least until of late – is working its way up the ranks.
Wells Fargo (WFC, $23.95) jumped to 31st place from 51st place the previous quarter, and this seems to be one of several cases of Millennials trying their luck as value investors. Wells Fargo’s stock price is down by more than half this year. With the Federal Reserve keeping interest rates tethered near zero and loan losses likely to rise, the profit outlook for banks doesn’t look particularly great.
But beyond the issues affecting the entire banking sector, Wells Fargo has been particularly hit hard, as a series of scandals over the past few years has really dented confidence. Wells Fargo shares are trading near 20-year lows, and the company recently slashed its dividend by 80%.
Perhaps Millennials believe that the bad news is finally priced in. After all, it’s not every day you get the chance to buy a stock at prices first seen 20 years ago.
But the Oracle of Omaha appears to be tiring of waiting for the turnaround. While Wells Fargo has long been among Warren Buffett’s favorite stocks, holding a 5.8% stake as of Berkshire Hathaway’s last 13F, recent filings show that his position has since dropped to 3.3%, indicating a major haircut.
- Rank: 53rd
- Move from Q1: Previously unranked
XpresSpa Group (XSPA, $1.84) ranked 53rd in Millennial portfolios last quarter after not being ranked at all in Q1.
This operator of airport spas would seem to appeal to Millennials for a couple of reasons.
To start, Millennials have been known to favor experiences over material possessions. That’s a dominant characteristic of the generation as a whole. So it’s not strange to see them gravitating to a spa company.
But Millennials are also aspiring value investors who flock to deep potential bargains. Shares currently trade at $1.82 per share, reflecting a 1-for-3 reverse split executed back in June. As recently as 2018, shares traded above $90 per share (on a split-adjusted basis). XSPA caught plenty of investors’ attention on news that the company planned to convert some of its airport spas to COVID testing centers, driving the stock 250% higher as of mid-June, but shares have collapsed since to about 10% lower than where they started the year.
We’ll see how patient Millennials prove to be with XpresSpa stock. Even if virus fears dissipate tomorrow, travel will likely be depressed for a year or more, meaning revenues won’t be recovering any time soon.
- Rank: 57th
- Move from Q1: +32
Another “experiences” stock that has grown in popularity among Millennials is MGM Resorts (MGM, $22.84). MGM was ranked 89th at the end of the first quarter, shooting up to 57th at the end of the second.
MGM operates gaming resorts in Nevada, Michigan, Mississippi and New Jersey, not to mention international locations in China and Japan. But its most famous properties are the Bellagio, Mandalay Bay and the MGM Grand on the Las Vegas strip.
This stock fits the pattern of several other value plays favored by Millennials. Leisure and hospitality companies such as MGM saw their businesses get obliterated by the COVID-19 pandemic. Even if the Las Vegas casinos are open, going to them isn’t exactly pleasurable under these conditions. Who wants to play socially distanced blackjack behind a plastic shield?
By purchasing MGM, however, Millennials are signaling that they believe life will get back to normal soon enough and that Americans will enjoy rolling the dice again.
- Rank: 40th
- Move from Q1: Previously unranked
Biotech stock Moderna (MRNA, $57.56) is popular among Millennials, coming in at 40th in the second quarter after not being ranked at all in the first.
It’s not hard to see the investment play here. Moderna is one of the leading candidates for a COVID-19 vaccine. The company is currently doing a trial on as many as 30,000 people, and with any luck we’ll know whether or not the vaccine is effective by the fourth quarter of this year.
Millennials are betting that Moderna’s vaccine is viable and expecting the stock to soar as a result.
Biotech investing is notoriously hard, of course. It’s about as close to straight-up casino gambling as you can get in the stock market because the outcomes tend to be binary: Either a new treatment works, or it doesn’t.
Perhaps this is why Moderna doesn’t rank higher than 40th. While Millennials aren’t opposed to rolling the dice here, they’re smart enough not to overweight a position this speculative.
- Rank: 41st
- Move from Q1: +9
With the pandemic monopolizing the news cycle, socially responsible investing hasn’t gotten a lot of attention this year. But it’s interesting that it hasn’t completely fallen off the radar screens of Millennial investors.
Beyond Meat (BYND, $143.04), which makes plant-based veggie burgers and other meat substitutes, climbed the ranks over the past quarter from 50th to 41st.
Beyond Meat is a feel-good story stock. While the Millennials buying it no doubt expect to turn a profit on it, they are also putting their money behind social causes they support. Ranching is believed to be a major contributing factor to climate change, which livestock responsible for about 15% of greenhouse gases. Plant-based meat substitutes are one way to attack this problem.
If you’re buying Beyond Meat, it’s because you see a vegetarian future. Because in the here and now, the stock’s valuation looks questionable. It trades for 20 times sales and has never consistently turned a profit.
Genius Brands International
- Rank: 46th
- Move from Q1: Previously unranked
Genius Brands International (GNUS, $1.05) has suddenly found itself popular with Millennials. The stock was unranked in the first quarter but now finds itself ranked 46th.
Genius Brands creates and licenses “content with a purpose for toddlers and young children. That’s a fancy was of saying educational cartoons. Some of its productions include Rainbow Rangers on Nick Jr. and Llama Llama on Netflix. And for the Kiplinger’s readers looking to educate their children or grandchildren on basic investing concepts, Genius Brands produced Warren Buffett’s Secret Millionaires Club.
Millennials aren’t idle youth anymore. The bulk of the generation is now over 30 and making an attempt to settle down and start families. It’s easy to see why Millennial parents have gravitated to Genius Brands. They are likely following Peter Lynch’s timeless advice to invest in what you know. With kids spending more time at home during the pandemic – and with parents desperate to make that time more useful – it’s not at all surprising to see educational cartoons gaining in popularity.
That said, it’s possible some Millennials have cashed in their outrageous gains. GNUS shares remain up 285% at prices around $1 per share, but that percentage return was in the thousands this summer when GNUS shot to the $8-per-share level.
- Rank: 49th
- Move from Q1: Previously unranked
Like Tesla, Nikola (NKLA, $37.57), is very much a Millennial story stock. Millennials as a generation are concerned about climate change, and they view the transition to electric vehicles as part of the solution. While still early in the production stage, Nikola makes electric and fuel-cell 18-wheeler trucks. It also recently made headlines by signing a deal to supply 2,500 garbage trucks to Arizona-based Republic Services (RSG), and even more recently when General Motors (GM) took a $2 billion, 11% ownership stake.
Nikola didn’t make the list in the first quarter because it didn’t exist as a public company. It only went public on June 4. But by the end of June, it had already rocketed higher to become the 49th most popular stock in Millennial portfolios.
Nikola’s newness is also likely a factor for Millennial investors. Millennials have shown interest in IPOs, and for all the talk of this generation being excessively frugal and fiscally conservative, they’ve definitely shown a willingness to selectively take risk.
But for all the positive headlines it has racked up, NKLA is mired in a serious negative news cycle right now. The company’s shares dropped by double digits after short selling research firm Hindenburg accused Nikola of fraud. The company has since retained Kirkland & Ellis as it considers legal options and a response.
It will be interesting to see if Millennials have to stomach to hold on to it for another quarter.
- Rank: Seventh
- Move from Q1: +7
Perhaps the most surprising stock to see in Millennial portfolios is the only member of the top 10 we haven’t mentioned yet: Boeing (BA, $157.69). It was the seventh most popular stock during the second quarter, up from 14th at the end of the first quarter.
While it might seem unexpected to see a gritty old industrial stock rank this high among Millennial buyers, it’s not hard to understand the thought process. Millennials saw the stock get hammered when air travel ground to a halt, and they smelled a bargain. BA shares are off 55% from their 2020 highs, and that’s after a significant rally – during the first-quarter bottom, the stock was down 73% from its 52-week highs – that has since started to fizzle out.
Boeing hasn’t been a particularly easy stock to hold, and it hasn’t just been because of COVID. BA shares were already reeling from the 737 MAX recall following two deadly crashes.
Millennials are betting that the worst is behind the company, and they could very well be right. But recovery here could be slow.
- Rank: 13th (Delta), 19th (American), 22nd (United), 33rd (Southwest), 45th (Spirit)
- Move from Q1: +7 (Delta), +27 (American), +35 (United), +55 (Southwest), previously unranked (Spirit)
Airlines were wildly popular among Millennials last quarter, as five major carriers cracked the top 100.
Delta Air Lines (DAL, $31.79) was the most popular, after jumping seven places over the last quarter to 13th. American Airlines (AAL, $13.01) made an even bigger move, popping from 46th at the end of the first quarter to 19th at the end of the second.
Not to be outdone, United Airlines (UAL, $36.45) shot from 57th to 22nd, jumping 35 places, and Southwest Airlines (LUV, $38.94) really upped the ante by moving 55 places from 88th to 33rd. Spirit Airlines (SAVE, $17.48) wasn’t ranked at all in the first quarter and yet finished Q2 placed 45th.
As we said earlier, Millennials have been known to favor experiences over material objects, so perhaps it’s not too surprising they see value in the COVID-wrecked airline sector. Most airline stocks still trade for less than half their pre-pandemic prices.
But we should probably remember that the Oracle of Omaha himself exited the airline industry months ago. Warren Buffett’s Berkshire Hathaway liquidated its large positions noting that “the world has changed for the airlines.”
Time will tell. In the meantime, it would seem that America’s Millennials are betting that life gets back to normal sooner rather than later.
- Rank: 21st (Carnival), 25th (Norwegian), 35th (Royal Caribbean)
- Move from Q1: +17 (Carnival), +46 (Norwegian), +19 (Royal Caribbean)
Here are three more deep-value Millennial plays that yet again deal with travel. Cruise operators Carnival (CCL, $17.88), Norwegian Cruise Lines (NCLH, $17.93) and Royal Caribbean Cruises (RCL, $70.14) all saw major Millennial buying last quarter.
Carnival finished the second quarter ranked 21st, up from 38th the previous quarter. Of course, that pales in comparison to Norwegian Cruise Lines, which shot up from 71st to 25th. And Royal Caribbean put up a good fight too, jumping from 54th to 35th.
The Millennial case here is pretty obvious. Carnival and Norwegian both trade for less than a third of their pre-pandemic prices, and Royal Caribbean trades for roughly half. Millennials are betting that life returns to normal sooner rather than later and that passengers quickly forget the “petri dish” horror stories of March and April.
They might be on to something. Royal Caribbean noted in its most recent earnings release that demand for 2021 bookings was “remarkable.”
Still, before we too excited, we should remember that cruise lines are still officially shut down in the U.S. through at least Oct. 31. And the industry might not rebound completely for months or even years. We’ll see if the Millennial investors accumulating the shares have that kind of patience.