Retail investors are buying these stocks into the reopening, UBS says

Published Thu, Apr 15 20212:56 PM EDT

Small investors are betting on a strong recovery from the pandemic and buying into the stocks that should benefit the most, according to UBS. "Retail investors have been buying stocks exposed to the reopening theme, infrastructure spending and value," UBS equity strategist Keith Parker told clients. As the vaccine rollout continues and the U.S. economy continues to reopen, retail investors are betting on pockets of the market that they expect to see a robust recovery, like travel and entertainment. In order to gauge which stocks retail investors are buying with the most extreme sentiment, UBS screened through the firm's retail market making data, which represents retail net flows as a percentage of market value over the last month. The Wall Street firm also looked at call and put volumes as a percentage of market capitalization and social media activity on Twitter, for a read on sentiment. UBS then calculated the percentile rank for each metric and took the average to get its aggregate retail sentiment score. Take a look at the stocks that retail investors are buying with the highest sentiment scores. Retail investors are bullish on airlines, with United Airlines , Southwest and Delta Airlines ranked in the 98th, 96th and 92nd percentile for UBS' retail sentiment score. Travel demand in the U.S. is bouncing back after a tough start to the year when Covid-19 cases peaked. Airline CEOs are upbeat about spring and summer bookings, as million of Americans receive coronavirus vaccines, quarantine orders are lifted and tourist attractions reopen . Shares of United Airlines are up nearly 30% and shares of Southwest are up nearly 35% in 2021. Delta Air Lines stock has popped 16% year-to-date amid investor confidence in a return to normal travel activity. Aircraft maker Boeing is also well-liked by retail investors and has a 96% average retail sentiment score. Boeing's March aircraft sales outpaced cancellations for the second month in a row in March as some airlines turn their attention to the industry's recovery from Covid-19′s toll on travel. Entertainment companies like Dave & Buster's and MGM Resorts International are also being bet on by smaller investors. Dave & Buster's has a 96% sentiment score and casino stock MGM has a 94% sentiment score. Other reopening plays like Darden Restaurants and retailer L Brands also made UBS' list. Restaurants and retailers are among the other pockets of the markets that investors see benefiting from government stimulus and vaccine rollout. Technology names like Advanced Micro Devices , Micron , Tesla and PayPal are among the other stocks with strong retail sentiment. — with reporting from CNBC's Michael Bloom.

A Southwest Airlines jet lands at Midway International Airport on January 28, 2021 in Chicago, Illinois.

Scott Olson | Getty Images

Small investors are betting on a strong recovery from the pandemic and buying into the stocks that should benefit the most, according to UBS.