Consumer Finance

Wall Street Investors Place Their Bets On Millennials

When it comes to stock market picks, Wall Street investors are placing their bets on the buying power of the millennial generation.

According to Reuters, hedge fund managers at the 2018 Sohn Investment Conference in New York offered stock ideas that would benefit from the steadily growing influence of millennials, who are expected to become the largest generation in the United States in 2019.

With that in mind, John Khoury, founder and managing partner of the $2.7 billion Long Pond Capital hedge fund, pitched U.S. homebuilder D.R. Horton, which he believes should get a boost as more millennials become first-time homebuyers.

In fact, D.R. Horton, the country’s largest homebuilder, has been focusing on its entry-level segment, which the company said should show strong growth over the next three years.

Meanwhile, two other investors were focused on mobile food ordering. Alexander Captain of Cat Rock Capital Management introduced Netherlands-based Takeaway.com NV. And Half Sky Capital’s Li Ran offered GrubHub, which she noted averages $30 per order and earns 15 percent on each order. She added that spending growth at restaurants is outpacing spending at grocery stores.

“I like to call this chart ‘millennials can’t cook,’” Ran said.

Khoury went on to say that he believes D.R. Horton has more than 60 percent upside, while Ran said GrubHub could hit $160 a share.

As for what types of stock millennials are purchasing, last year trading app Robinhood revealed that those under the age of 30 are 30 percent more likely to purchase Netflix stock than anyone above their age range. And when Snapchat’s parent company Snap filed for its IPO, millennials were in the majority of those choosing to buy early.

“Snap’s IPO revitalized investing among the younger generation. We also saw a surge in new accounts, with many new customers opening up their first brokerage account,” said Robinhood’s co-founder, Baiju Bhatt.

And with more millennials moving into the workforce, it’s likely that this age group will continue to invest in new technologies.

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