These are the stocks retail investors love that UBS says can go higher

Published Sun, Nov 21 20217:40 AM EST

Retail investors are flocking to a handful of stocks that UBS believes will go even higher from here. The Wall Street firm found a correlation between stocks that individual investors love and outperformance over the next three months. Since retail interest in stocks remains high, these stocks could be interesting candidates for a short-term trade. "Retail participation remains elevated despite the lapsing of stimulus and reopening of the economy," UBS equity strategist Keith Parker said. Retail trading volumes have come down from January's GameStop short-squeeze but are still 80% higher than in 2018, UBS noted. UBS highlighted a handful of stocks that have high retail scores, which the firm calculated using metrics like retail flows, weekly expiration for call and put imbalances and Twitter sentiment. "Aggregating these metrics into a single retail score, we find that these variables combined can provide a useful signal for future stock returns," Parker added. The firm also found that stocks with retail scores in the top percentile have historically outperformed those in the bottom 2-percentile by an average of 5.5% over the following three months. Take a look at the stocks that retail investors love right now that UBS says have upside potential: UBS' list is full of reopening plays like travel companies Norwegian Cruise Line , United Airlines , Royal Caribbean Cruises , MGM Resorts and Southwest Airlines . Individual investors are also betting on some retailers like Etsy, Macy's and Dick's Sporting Goods . Macy's on Thursday reported third-quarter earnings and sales that topped analysts' expectations. The department store chain also raised its full-year forecast ahead of the holidays. Separately, the company teased the launch of a digital marketplace that's set to debut in the second half of 2022. It added that it hired consulting firm AlixPartners to review its business structure. Macy's shares jumped nearly 14% for the week following the news. The group also like chip stocks Advanced Micro Devices and Nvidia . Nvidia last week issued strong fourth-quarter revenue guidance and beating on the top and bottom lines of its quarterly results . Electric vehicle giant Tesla — which recently became a $1 trillion company — also made the list for retail-loved stocks. Other names on UBS' list include Occidental Petroleum , APA Corp . PVH Corp ., Clorox and Boeing . — with reporting from CNBC's Michael Bloom.

OntheRunPhoto | iStock Editorial | Getty Images

Retail investors are flocking to a handful of stocks that UBS believes will go even higher from here.