Overlooked Alpha

Overlooked Alpha

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Overlooked Alpha
Overlooked Alpha
Robinhood Stock Is A Buy (Seriously)

Robinhood Stock Is A Buy (Seriously)

A poor reputation is blinding the market to an intriguing opportunity in HOOD

Joe | 3MB
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Overlooked Alpha
Oct 08, 2023
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Overlooked Alpha
Overlooked Alpha
Robinhood Stock Is A Buy (Seriously)
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Highlights:

  • To skeptics, Robinhood isn’t a brokerage, but a gambling platform, and some of the company’s metrics support that case.

  • But a closer look suggests there are buy-and-hold investors on the platform. In a normalized interest rate environment, those investors become exceptionally valuable.

  • Thanks to a fortress balance sheet (60% of market cap in cash), HOOD trades at 1.3x tangible book value, providing downside protection.

  • Considering that cash, HOOD is an intriguing bet on what the company can become.

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