Institutional vs. Retail Stocks: Understanding the Difference
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 14 2024
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Source: NASDAQ.COM
Meme Mania Returns:
- Meme stocks like GameStop and AMC surged after a tweet by "Roaring Kitty," but then saw significant losses.
- Retail investors dominated trading this week, with AMC trading more shares than the S&P 500 Index ETF.
- Caution advised against chasing meme stocks due to their speculative nature.
Institutional vs. Retail Stocks: Why it Matters:
- Institutional investors drive long-term equity prices, while retail investors tend to perform worse over time.
- Focusing on institutional quality stocks is recommended for long-term investment success.
Retail vs. Institutional: Understanding the Difference:
- Key distinctions include volatility & beta, fundamentals vs. hype, and share price differences.
- Institutional stocks are driven by fundamentals, while retail stocks are influenced by hearsay and hype.
Research Chief Names "Single Best Pick to Double":
- Zacks experts have identified a company targeting millennial and Gen Z audiences with high revenue potential.
- Director of Research Sheraz Mian highlights this stock as having explosive upside potential.
- The company aims to double in value, similar to past Zacks' picks like Nano-X Imaging.
Bottom Line:
- Retail-centric stocks can be risky, and investors are advised to stick to institutional quality stocks for long-term success.
Analyst Views on GME
About GME
GameStop Corp. offers games and entertainment products through its stores and ecommerce platforms. The Company operates in four geographic segments: United States, Canada, Australia and Europe. Each segment consists primarily of retail operations, with the significant majority focused on games, entertainment products and technology. The Company has a total of approximately 3,203 stores across all of its segments: 2,325 in the United States, 193 in Canada, 374 in Australia, and 311 in Europe. Its stores and ecommerce sites operate primarily under the names GameStop, EB Games and Micromania. Its Australia and Europe segments also include 38 pop culture-themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture brand. Its retail stores are generally located in strip centers, shopping malls and pedestrian areas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
