3 Meme Stocks to Buy on the Dip: June 2024

Stocks to buy

When meme stocks start skyrocketing, it’s difficult to find a good entry point.

Already, examples of a big rally in meme stocks happened in the recent past. In just over a month, Novavax (NASDAQ:NVAX) stock surged from sub-$5 levels to 52-week highs of $23.9. With a meme frenzy on the cards, it’s time to look at meme stocks to buy on dip. Additionally, these can be stocks that have remained subdued in the recent past, but are in the radar of meme stock investors.

When talking about meme stocks, fundamentals take a back-seat. However, my idea is to look at stocks that can go ballistic on speculation yet still have decent fundamentals. The advantage with these stocks is that the correction after a big rally is unlikely to be deep.

GameStop (NYSE:GME) is a good example of the type of meme stock to avoid. GME stock had recently surged to 52-week highs of $62.8. However, the downside has been sharp and the stock trades at $23.7. I would not be surprised if the downtrend sustains on the back of poor fundamentals.

Therefore, let’s discuss the meme stocks to buy on the dip for a stellar rally.

Riot Platforms (RIOT)

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Riot Platforms (NASDAQ:RIOT) seems to be massively undervalued at a forward P/E of 14 considering the impending growth. In the last 12 months, RIOT stock has declined by 15% and still has a short interest that’s almost 19% of the free-float. I expect the Bitcoin (BTC-USD) miner to quickly double or triple from current levels in the next few quarters.

Notably, Riot Platforms has strong fundamentals with a zero-debt balance sheet. Further, the company has a cash buffer (including value of digital assets) of $1.3 billion. This provides headroom for aggressive capacity expansion.

The Bitcoin miner ended Q1 of 2024 with a capacity of 12.5EH/s. By the end of the year, capacity is likely to increase to 31.5EH/s. This will translate into healthy revenue and EBITDA growth. Thus, the meme rally will be supported by positive financial developments.

Furthermore, Riot Platforms intends to increase capacity to 100EH/s by 2027. If the execution is on-track, 5x to 10x returns are on the offering in the next 24 to 36 months.

Aurora Cannabis (ACB)

Source: Ralf Liebhold / Shutterstock.com

I expect plenty of action in cannabis stocks with the U.S. Presidential elections round the corner. Renewed debates on federal level legalization are likely. Additionally, regulations seem to be getting friendlier globally with Germany legalizing cannabis. So, I believe that cannabis stocks will surge on any meme frenzy.

Aurora Cannabis (NYSE:ACB) looks interesting considering the point that the stock has remained sideways for almost 12 months. A big breakout is likely if business developments remain positive.

From a financial perspective, Aurora Cannabis ended fiscal year 2024 on a positive note. For Q4 of 2024, the company reported the sixth consecutive quarter of positive adjusted EBITDA. Also, the cannabis company reaffirmed its guidance to achieve positive free cash flow by December 2024.

With ACB having presence in Germany, growth is likely to accelerate on the back of regulatory tailwinds. Additionally, Australia is an attractive market for the company. Overall, Aurora Cannabis seems to be positioned to survive and grow, and the stock is likely to surge after an extended period of consolidation.

Entera Bio (ENTX)

Source: shutterstock.com/Romix Image

Entera Bio (NASDAQ:ENTX) had surged to 52-week highs of $3.35 in April. However, there has been a sharp correction from those levels, and ENTX stock trades at $1.87. I see this as a good opportunity to buy before the meme stock surges.

As an overview, Entera Bio is a clinical-stage biotech company that’s focused on oral delivery of peptides and other therapeutic proteins. The company’s most advanced product, EB613, is for the treatment of high risk, post-menopausal osteoporosis. Further, EB612, is for the treatment of hypoparathyroidism.

Importantly, osteoporosis impacts 200 million women globally. Further, no new osteoporosis therapy has been approved since 2019. Therefore, EB613 has a big addressable market. With the product entering phase three of trials, it’s likely that there will be significant price-action in the coming quarters.

Notably, Entera Bio has cash runway through Q3 of 2025. Therefore, there is no immediate risk of equity dilution driven stock correction.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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