Clover Health, Wendy's Are Latest Meme Stocks To Pop; Canoo Surges, Lordstown Warns - Investor's Business Daily

Clover Health (CLOV) and Wendy's (WEN) are the latest big-time gainers as the retail-trader frenzy continues. CLOV stock and WEN stock both gapped up. EV stock Canoo (GOEV) surged too.

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Meanwhile Lordstown (RIDE) reversed after a 10-K/A filing warned, "We require additional capital to implement our business plan, and it may not be available on acceptable terms, if at all, creating substantial doubt as to our ability to continue as a going concern."

Clover Health Stock

CLOV stock skyrocketed 86% to 22.15 on the stock market today, following Monday's 32% gain. Clover was among the most mentioned companies in StockTwits, a social media platform where traders, investors and entrepreneurs share ideas.

CLOV stock took a breather, but was still sitting on a 60% gain by midday. MarketSmith chart analysis shows Clover Health's relative strength line bolted up on the stock surge. Its RS Rating is 76 out of a possible 99, while its EPS Rating is 46.

The health insurer is backed by early Facebook (FB) investor Chamath Palihapitiya.

Wendy's Stock

Wendy's jumped 26% to 28.87. The fast-food operator was catapulted into meme-stock status after several mentions on Reddit's WallStreetBets forum.

Wendy's relative strength line spiked on Tuesday, but its RS Rating is just 33. WEN stock has an EPS Rating of 90 as it's posted two quarters of accelerating earnings growth.

The company has focused its efforts on breakfast offerings, which it launched in March 2020, and digital sales.

Wendy's CEO Todd Penegor said in an earnings call that Wendy's had the second-largest share of visits of any quick-service burger chain in 2020, citing data from market researcher NPD Group. That means Wendy's surpassed rival Burger King, but still trails McDonald's (MCD).

So-called meme stocks have rallied over the last six months, many of them outlasting their 15 minutes of fame.

AMC Entertainment (AMC) has capitalized on the trend to raise $1.24 billion equity in less than a month. It has plans to sell 25 million more shares in 2022.

GameStop (GME), which was once on the verge of bankruptcy, has a comeback strategy. It's attempting a pivot to global e-retailer. It brought in new management, teamed up with Microsoft (MS) in a multiyear deal to expand its offerings and modernized its fulfillment facilities.

But while the stocks have notched several new highs and created wealth for many investors, they're not traditional CAN SLIM stocks. Many of them have weak fundamentals and don't yet deserve their high valuations

On Tuesday, AMC stock edged up 0.1%, after rising as much as 10% intraday. GME stock, the original meme stock, gained 7%. It reports earnings on Wednesday.

Canoo stock leapt 20%, and Workhorse (WKHS) popped 11.8%. But Lordstown stock reversed sharply lower to close down 16.3% after its going-concern warnings.

Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.

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