2020 seemed to be much like 1999, as technology initial public offerings that made little or no money came out and rocketed higher. However, some of the glow has worn off, and some of the deals retreated to much lower price levels or traded lower right out of the chute. Some top hedge funds reportedly were shorting the IPOs as soon as they could, and now it appears that many of the same hedge funds could be piling back into the shares.
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We screened our 24/7 Wall St. research database looking for backdraft trade ideas on some of the companies that have had some wild price swings in 2021. We found four companies that are rated Buy across Wall Street and also offer stellar technologies and applications. While these are not suited for conservative investors, they make sense for more aggressive ones looking for solid ideas. All four have Buy ratings at major Wall Street firms, but it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Affirm

This top fintech stock has given back a huge chunk of the initial gains and is offering an outstanding entry point. Affirm Holdings Inc. (NASDAQ: AFRM) operates a platform for digital and mobile-first commerce. It offers integrated checkout, virtual cards, split pay, Affirm app and marketplace, and savings accounts and are building the next-generation platform for digital and mobile-first commerce, making it easier for consumers to spend responsibly and with confidence, easier for merchants to convert sales and grow, and easier for commerce to thrive.

For the quarter that ended Dec. 31, 2020, Affirm financed gross merchandise volume of $2.1 billion. The most likely reason for the drop is that Affirm’s stock was priced for phenomenal growth. Since its IPO in mid-January, Affirm’s stock rose by more than 180% before coming back to earth, so it is fair to say that investors had extremely high expectations to justify the lofty valuation. Hence, the heavy selling that brought the shares down from the stratosphere.

Last week, Vacasa, a leading vacation rental management platform in North America, and Affirm, announced the companies have partnered to provide flexible payment options to those planning their next vacation. Through the partnership, Affirm will expand its travel category and increase payment flexibility to more vacation rental guests.

Truist Securities recently started coverage with a massive $160 price target. No consensus target was available, and the last trade for Friday was reported at $93.06 per share.

Context Logic

This stock plummeted after it came public, staged a huge snapback rally and has come all the way back to near the initial IPO pricing Context Logic Inc. (NASDAQ: WISH) is a value-focused, mobile-centric, e-commerce marketplace targeting over a billion households with annual incomes less than $75,000 (excluding China and India).

The company also partners with over 50,000 brick-and-mortar stores for its Wish Local pickup service. Wish’s largest categories in terms of units sold include fashion, accessories and hobbies. As of last year, Wish generated close to 50% of revenue from Europe, 40% from North America, 5% from South America and the rest from Asia and the rest of the world.

Wish also gamifies the shopping experience, using features like sweepstakes to keep customers coming back. Similar to Pinduoduo, Wish has adopted a mobile-first strategy. Its discovery-based shopping experience leverages user-generated content like photos, videos and reviews, as well as extensive data science capabilities to engage and grow its user base.

Oppenheimer has a $30 price target, and the consensus target is $27.64. Friday’s closing share price was $19.61.
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Corsair Gaming

For anybody big into esports and gaming, this company is very familiar. Corsair Gaming Inc. (NYSE: CRSR) designs, markets and distributes gaming and streaming peripherals, components and systems in the Americas, Europe, the Middle East and the Asia Pacific.

The company offers gamer and creator peripherals, including gaming keyboards, mice, headsets, and controllers, as well as capture cards and studio accessories. It also provides gaming components and systems comprising power supply units, cooling solutions, computer cases, and DRAM modules, as well as pre-built and custom-built gaming PCs. Its PC gaming software includes iCUE for gamers and Elgato’s streaming suite for content creators.

The company sells its products through a network of distributors and retailers, including online retailers, as well as directly to consumers through its websites. With the holiday right around the corner, this could be a solid idea.

The $55 Wedbush price target is a Wall Street high. The consensus target is $48.33, and shares closed Friday at $35.84 apiece.

Sumo Logic

This company’s cutting-edge technologies make its stock a solid idea for aggressive growth investors. Sumo Holdings Inc. (NASDAQ: SUMO) provides cloud-native software-as-a-service platform that enables organizations to address the challenges and opportunities presented by digital transformation, modern applications and cloud computing.

The Sumo Logics platform enables organizations to automate the collection, ingestion and analysis of application, infrastructure, security and Internet of Things data to derive actionable insights. The company offers a suite of solutions to address areas, such as operational intelligence, security intelligence, business intelligence and global intelligence.

The company recently announced it is expanding its work with leading businesses in the fintech and banking sectors, including Coincheck, Currencycloud, Moneytree, MoonPay, Paidy and Snoop. These companies use Sumo Logic’s Continuous Intelligence Platform to transform data from complex systems into real-time insights with a single pane of visibility across security and operations to help fintechs diagnose and troubleshoot issues faster and reduce service interruptions.

Rosenblatt started coverage last month. Its street-high $46 price target is well above the $33.67 consensus target and Friday’s last trade at $30.38 per share.

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Three of the four top companies initially exploded higher, and all have come back in dramatically. However, given their short trading life, they may have a long way to go. With that noted, there almost undoubtedly will be some backing and filling in the shares prices. Long-term investors with a high risk tolerance that like the company’s stories should scale buy shares over a three-month or so period, looking for price dips.

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