Money is not a client of any investment adviser featured on this page. The information provided on this page is for educational purposes only and is not intended as investment advice. Money does not offer advisory services.
The internet has spawned subcultures around all sorts of interests. Thanks to the proliferation of day trading apps, that increasingly includes stocks.
It’s never been easier for everyday investors to put their bucks behind the products and companies they love and take their company fandom to a whole new level: shareholder status. Of course, you’ve probably heard zealous investors raving about Tesla or Apple, which are classic cult stocks.
But what makes a cult stock, exactly? An enthusiastic shareholder base that’s captivated as much by the celebrity of the company as its financials. And the definition isn’t always completely contingent on an undying belief in a company — sometimes it includes an undying belief in the community of a company. In an ever growing number of cases, the fervor can be stoked by memes.
As the lines between consumer and investor continue to blur, more communities of everyday investors are cropping up across all corners of the web, bringing cult distinction to companies new and old.
Here are five cult stocks you should keep an eye on in 2022.
Odd Burger (ODDAF)
If you haven’t heard of Odd Burger, then you probably aren’t vegan.
The Canadian vegan-fast-food chain (formerly Globally Local) with six locations is the first of its kind to ever go public, and it has big plans to enter the U.S. — with a goal to reach 20 total locations in 2022. And the vegan investing community, which blends capitalism, sustainability and animal rights, is hyped.
“The future is vegan,” says Rita Harb, 24, an Odd Burger shareholder from Ontario. She’s invested only in a few companies total, but investing in a vegan-fast-food company was a no-brainer for a vegan who works as a line cook in a vegan restaurant. "It's important to invest in vegan companies because it's good for us, the planet, and our animal friends."
The company, which is already listed on Canadian and German exchanges, began trading in the U.S. in October on over-the-counter (OTC) markets, which is how some smaller and/or international firms choose to start trading when they don’t yet meet the requirements for bigger exchanges that can call for a market cap between $45 million and $100 million. (Odd Burger’s is $20 million.)
Since launching in 2014, Odd Burger has evolved from a farmer’s market vendor into a “smart kitchen,” that is optimized for pickup and delivery. The high-tech restaurants serve about 30 plant-based products, all researched and designed by the company.
In October, Odd Burger said sales jumped 40% — an encouraging sign, but the company has a long way to go to meet its 20-location goal by next year. It announced plans for a flagship Manhattan location back in the summer. Despite this, it’s yet to break ground in the U.S. And, of course, it remains to be seen whether Americans, who pack down more than 250 pounds of meat each year, will be receptive to the vegan-fast-food chain.
But vegan investors aren’t deterred. “Odd Burger to the moon,” Harb says.
The Walt Disney Company (DIS)
Disney megafans love all things Disney, including its stock.
Just how dedicated are they? The stock-gifting company Give A Share says Disney is its most popular option among more than 130 famous stocks. For about $250, the company will sell you a real share (current market value: about $150) that comes with a physical replica of Disney’s old stock certificates (which were discontinued in 2013), a frame and even an engraved plaque to boot.
Disney bloggers also play armchair investing analysts. For example, DisneyFoodBlog, one of the biggest Disney blogs on the web, has added an investing beat, covering stock news right alongside the hottest new Disney dining tips, product announcements and travel trends.
Disney's shareholder fans can be prickly, too. Some Star Wars fanatics, upset with the direction Disney is taking the beloved franchise, have been calling for the ouster of the head of Lucasfilm, Kathleen Kennedy. During Disney’s 2021 shareholder meeting, a shareholder called in asking Disney CEO Bob Chapek if he’s going to fire Kennedy. (It didn’t happen.)
Alas, a company can’t run on the zeal of its fans alone. The pandemic has hammered the parks, travel and hospitality portions of Disney’s operations, but the company still turned a profit the last two quarters, by relying on its streaming services like Disney+ and Hulu for additional revenue.
Next, Disney is banking on the metaverse, potentially with new features for Disney+ subscribers and experiences for park goers in the works for 2022.
Polestar/Gores Guggenheim (GGPI)
Electric-vehicle maker Polestar is already being hailed by some as the next Tesla. The Swedish brand, which is currently owned by Volvo, has ambitious plans to put nearly 300,000 EVs on the road by 2025.
Billionaire businessman Alec Gores, for one, is convinced. Gores and investment bank Guggenheim have created a special acquisition company (SPAC) — hence Gores Guggenheim — to acquire Polestar and bring it public in the first half of 2022. Gores Guggenheim itself is publicly listed after a $750 million IPO in March, trading under the ticker GGPI. Once the acquisition clears, Polestar plans to trade under the ticker PSNY.
Polestar has recently caught the attention of the infamous Wall Street Bets community on Reddit, and some are already YOLOing (short for you only live once — except in verb form) their savings.
One Redditor claimed to purchase about $95,000 in stock, in a response to a viral post about Polestar. Another said, “I don’t need to hear more. I’m 85% of my portfolio in.” While it’s hard to judge the veracity of Reddit posts, the gusto is undeniable.
What’s fueling all the enthusiasm? The consensus among Polestar stans on the internet is that Swedish EV automaker is currently the best “pure play” in the industry. In other words, they’re impressed by the company’s laser focus on getting electric vehicles out the door, as opposed to Tesla’s preoccupations with spaceships or quad bikes for kids.
And Thomas Ingenlath, Polestar’s CEO, is attuned to this message. In a teaser of the new Polestar 3 SUV last week, he said he expects the number of Polestar EVs on the road to hit 29,000 by the end of the year and plans for 10 times that amount by 2025. The company, which has a $20 billion valuation, predicts $1.6 billion in revenue in 2021 and more than $3 billion in 2022, big plans that many require a leap of faith, considering the company says it has yet to turn a profit.
Southwest Airlines (LUV)
Airlines frequently top lists of the most-hated companies in America, which makes the unbridled affection for Southwest in some groups a rare thing to behold.
Over the years, the budget airliner has never shied away from its barebones approach to flying the skies, and that’s partially why so many people love the company. The Facebook group Southwest Friends alone has racked up more than 23,000 members. There, shareholders, employees, employee-shareholders and frequent flyers gather to chat about company and stock news, and their undying love of all things Southwest, of course.
“Sounds crazy but it’s all about FAITH about our company,” one employee-shareholder wrote, explaining that she puts 100% of her profit-sharing money back into company stock. Another employee responded that “I buy with every paycheck [because] they match me,” referencing Southwest’s employee stock benefits.
Indeed, Southwest’s workforce is unique. It’s highly unionized and owns nearly 7% of the company through employee-stock purchasing plans, at a time when broad-based employee ownership among public companies is relatively rare. Even amid a pandemic that ravaged the industry as a whole, Southwest did not lay off a single employee. And never has. The pandemic did, however, break the budget airliner’s decades-long profit streak.
“Up until Covid hit in 2020, Southwest had been profitable for 47 years,” shareholder Graham Grieder wrote for the crowd-sourced investing community Seeking Alpha. “Call me crazy, but I firmly believe once this is all over they will once again be profitable.”
With a large assist from federal pandemic aid, Southwest has started to recover. The company reported $446 million in profit last quarter with revenue of $4.7 billion. And it’s not only the enthusiastic investors in online groups who are expecting things to turn around: The median analyst forecast has stock going up more than 30% over the next year.
Starbucks is so popular that by simply changing the design of its coffee cup around the holidays, it can send large portions of the population into a frenzy, out of outrage or elation. The coffee chain has also cultivated a sizable cult-like following among its shareholders.
For 30 years, Starbucks has been doling out “bean stocks” to its workers. In 2019 alone, the company granted bean stocks to approximately 211,000 “partners” (of about 400,000 total that year). It also explains why the company refers to them as such instead of workers or employees. Almost every non-executive-level worker is eligible for the program, even part-timers, so long as they stay at the company long enough. (Execs receive separate stock benefits.)
It’s an attractive perk, to be sure, that’s spawned a dedicated group of worker-shareholders.
On Starbuck’s official “Partners” Facebook page, one employee gushed that the stock program “is what helped b[u]y my first house.” Another called it: “One of my favorite parts of being a partner.”
Of course, Starbucks isn’t being totally altruistic. Research shows that employee-ownership plans can boost overall company performance and help retain workers, and Starbucks employees must remain continuously employed for at least two years for their bean stocks to fully vest.
Throughout the pandemic, Starbucks has been undergoing a bit of a metamorphosis, experimenting with ways to keep America caffeinated. The coffee-chain beat earnings estimates last quarter but fell short on revenue — all the while, tearing down hundreds of stores, building new ones and retrofitting current locations to make them more pick-up and drive-thru friendly.
More from Money's New Investors Week:
Rates are subject to change. All information provided here is accurate as of the publish date.