MW From Allbirds to AI, the meme-stock frenzy is warning you to own this quality 'antimeme' portfolio instead

By Mark Hulbert

These dividend-paying stable winners are likely to outperform a meme-themed ETF

A sign on the front door of a shuttered Allbirds store. The shoe manufacturer recently rebranded itself as an AI company - and the stock soared.

Meme stocks are back - which means it's time to own an "antimeme" portfolio.

Meme stocks are darlings of retail traders and go viral on social media. They typically are small, relatively illiquid - and unprofitable. The latest example is Allbirds $(BIRD)$, a shoe company that has lost money every year since going public in 2021. The shares had lost 98% of their value since the company's IPO.

Then last week, Allbirds announced that it would shift from making sneakers to focusing on AI. The stock surged almost 600% on the news. It's still up almost 300% - meaning it has given up about half of its big gain.

There's more. Robinhood Markets (HOOD), the online broker that has been referred to as the "poster child of meme stocks," is up 21% in the past month, while the Roundhill Meme Stock ETF MEME, which invests in a basket of meme stocks, is up 32%.

The all-too-common meme-stock pattern is to soar and then, usually before too long, plunge. Unless you're a gambler addicted to risk-taking, you should avoid these stocks - if not sell them short. That's why six months ago, when there was a similar resurgence of interest in meme stocks, I presented an antimeme portfolio of stocks rated highly for profitability, financial stability and safety, and which pay out a large percentage of their profits as dividends. Since then, as you can see from the chart below, that portfolio has produced an 11.6% return, versus an 18.9% loss for the meme-stock ETF.

It's also worth remembering the meme-stock ETF's checkered past. It first came to market in December 2021 and then closed two years later. It lost 53% over that two-year period, versus a 2.1% gain for the S&P 500's SPX total-return index. The ETF reopened last fall, and since then it has lost 8.5% - even after taking into account its impressive recent gain.

The intelligent bet is that today's batch of meme stocks will suffer the same fate. With that in mind, I created a new antimeme portfolio. The list below contains all stocks currently recommended for purchase by at least two of the investment newsletters my auditing firm monitors, and which also are undervalued relative to the S&P 500 according to their ratios of price to earnings, book value, and sales and dividends.

   Name                           Ticker  P/E ratio  P/B ratio  P/S ratio  Dividend yield 
   Brown-Forman                   BF.B    15.9       3.3        3.4        +3.2% 
   Capital One Financial          COF     15.6       1.2        1.9        +1.6% 
   Devon Energy                   DVN     14.7       1.8        1.4        +2.6% 
   FactSet Research Systems       FDS     16.7       4.0        3.1        +1.9% 
   JPMorgan Chase                 JPM     18.3       2.4        3.2        +2.0% 
   Omnicom Group                  OMC     22.3       2.0        0.8        +4.2% 
   Truist Financial               TFC     13.0       1.1        2.1        +4.2% 
                                                              Source: LSEG, Hulbert Ratings 

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com.

-Mark Hulbert

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April 21, 2026 12:58 ET (16:58 GMT)

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