How To Find The Next Great Meme Stock
Meme stocks are roaring back.
That’s both good and bad.
It’s bad because meme stock rallies are definitely a sign of a major market rally reached the latest
But they’re also a place to make some big gains quickly.
That’s why we expect more “meme stock” plays to come in the weeks ahead before this party tops out too.
Although we don’t recommend going big in any of them.
They all have the power to turn small bets into big wins.
So we’ve identified three key traits of a meme stock.
And we’ve applied them to a search and came up with a beaten up stock that’s down 99% and has true meme stock potential..
That’s all revealed below.
But we’ll start with the features first.
Top Three Traits Of A Meme Stock
Here are the three main attributes of meme stocks.
If you look at all the most successful meme stocks, they’re mostly consumer brands or companies retail investors know.
Gamestop, AMC Theatres, Bed Bath & Beyond, Carvana, Blackberry, and now Tupperware are all well known companies.
Another key trait of meme stocks are they are in industries or are fundamentally in permanent decline.
Gamestop’s core business was selling video games. They’re mostly downloaded online now.
Blackberry fell so far behind every other smartphone it was never going to catch up.
AMC Theatres collapsed because of the lockdowns and a lack of major blockbuster movies that could major audiences
And the latest one, Tupperware, saw revenues peak in 2013 - a decade of decline since.
All of them are slow and steady decliners year, after year, after year.
This is closely related to the permanent declines above, but it is important.
The fundamental business must be in steady decline, but everyone has to know it too.
This drives share prices down often 95% or more from preview highs.
For example, Carvana fell from $360 per share to less than $4 between 2021 and 2022.
It was a literally 99% decline.
And expectations were so low that a Morgan Stanley analyst actually put a price target of 10 cents on Carvana shares when they were still around $4 per share.
Expectations couldn’t get much lower.
As a result, once Carvana caught a bid, its shares eventually ran all the way back to $60 recently.
And that’s a 1500%+ move in about six months even though it’s still down 85% from previous highs.
The Next Great Meme Stock
Those are the three key meme stock traits.
The next potential meme stock has them all.
The company is Canopy Growth (CGC).
This was once the king of the pot stock bubble.
That’s the name brand investors are aware of.
The legal pot business hasn’t lived up anywhere close to expectations.
That’s the permanent decline.
And, not many are even hopeful of a turnaround.
At the height of the pot stock bubble it was going for $50 per share. Today it’s less than 50 cents.
The company has so failed to deliver on growth forecasts that an analyst at Eight Capital recently put a price target of ZERO on the stock.
That’s the low expectations right there.
Everything is going wrong for the company and that makes it a great potential meme stock.
The Waiting Game
This is one to watch.
As with all meme stocks, it could easily run from here.
But you’ve got to wait for the move.
If not, the stock could continue to slide further.
So wait for a 20-30% move.
If it goes that much, it could easily keep going.
Because as we’ve seen with other meme stocks, if it can move 30%, it can possibly move 300%.