How to Buy Clover Health (CLOV) Stock

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Contributor, Benzinga
July 15, 2021
$0.8681
0.0042[0.49%]
Last update: 7:55PM (Delayed 15-Minutes)
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Open0.870Close0.865
Vol / Avg.10.023M / 7.777MMkt Cap423.324M
Day Range0.850 - 0.88052 Wk Range0.708 - 1.630

Shares of Clover Health Investments Corp (NASDAQ: CLOV) stock jumped from a trading average of around $7.00 to about $9.00 to a new high for the year of $28.85 for a 180% gain in the year to date. During its runup period, CLOV attracted mainstream attention from CNBC, Twitter Inc (NYSE: TWTR), Discord and other major financial commentary sites. 

Clover Health, headquartered in Tennessee, was founded in 2014. Clover Health went IPO this January after a huge merger deal, estimated at $3.7 billion, with Social Capital Hedosophia Holdings Corp (NYSE: IPOE). Clover Health uses its proprietary technology platform to collect, structure and analyze health and behavioral data to improve medical outcomes and lower costs for patients.

If you are interested in investing in CLOV for the potential next squeeze or just a long-term buy, learn how to buy CLOV here. 

How to Buy CLOV Stock

CLOV has been trending in many different chat rooms including WallStreetBets, the FinTwit community, Discord group chats and Twitter. During the months of January and February, AMC Entertainment Holdings Inc (NYSE: AMC) and GameStop Corp (NYSE: GME) were party to lots of action, mostly from WallStreetBets. As a result, traders in these communities saw strong short interest in CLOV, a stock that had the potential to run well over 100%.

On June 7, 2021, CLOV increased in volume almost 3 times over the normal moving average. The next day, it opened at $8.20 and moved up 360% in just 2 days. Ever since that day, it’s been on a consistent downtrend with support at the mid $8.50 level. CLOV is on a watchlist for many investors as indicators show that it could push upwards. 

CLOV not only has great indicators on a long-term graph, but the company is also looking to become approved in more states. With recent news that Clover Health was approved by 11 states, approval rates could possibly double.

  1. Pick a brokerage: Before you can invest in any company, you first select a brokerage to execute your trades. Now that most brokers have moved away from a commission-based model, you can purchase CLOV shares free of charge — regardless of which broker you choose.

Define your strategy, then choose a brokerage that offers the necessary tools to carry out that strategy. If you feel like you need some practice before putting your hard-earned money to work, select a brokerage that offers paper trading. 

Finally, pay attention to any promotional offers from brokerages. You may end up with bonus funds to trade with, a free stock for you and your friends or numerous other potential benefits. 

  1. Decide how many shares you want: Now that you’ve selected a broker, you need to decide how many shares of CLOV you want to buy. Some factors to consider include your age, time horizon, risk tolerance and reasonable expectations for the future of the company. 

While investing more than a small percentage of your funds into 1 company is extremely risky, doing this with a Reddit stock presents an even greater risk because of the increased volatility. Before placing a buy order with your broker, you need to determine how much money you want to risk, when you will sell on the upside to take profits and when you will sell on the downside. One option is a stop-loss order to protect your funds. 

After looking at the chart and answering these important questions, you can look for a favorable price point and purchase CLOV.

  1. Choose Your Order Type: After determining how many shares of CLOV you want to buy, your job as an investor is not complete. You now need to decide which order type to use. 

The most basic order type is the market order, which will fill your order at the current market price. This order type is best used when you are buying a stock with low volatility and trying to do it instantly. 

If you want to better define your risk, you should use a limit order instead, which allows you to purchase shares at a set price or lower. When trading an extremely volatile stock like CLOV, it may be beneficial to employ a limit order because this prevents your buy order from being filled at a price point that results in you being down in the stock from the very beginning.

  1. Execute Your Trade: Once you’ve determined the appropriate order type to use, all you need to do is submit your buy order to your broker and wait for your order to process. Once the order fills, your shares of CLOV should appear in your brokerage account. 

CLOV Stock History

Clover Health, a Preferred Provider Organization (PPO) and a Health Maintenance Organization (HMO) with a Medicare contract, began trading on January 8th, 2021,when it merged with a blank-check company called Social Capital Hedosophia. CLOV made its trading debut on the Nasdaq at $15.90. On the following days. it continued to drop and lost around 12%. Clover Health is a company focusing on innovative health equity for underserved U.S. seniors. Clover Health has great technology behind it that will transform and improve the way people receive healthcare. Clover Health is removing barriers and making access as simple as possible. 

Pros to Buying CLOV Stock

With the healthcare sector gaining attention and volume, Clover Health could result in positive results due to: 

  • Need for change in the healthcare industry: Ever since Covid-19, many healthcare companies have been in great demand. Covid-19 caused many companies to change and evolve, including Clover Health. 
  • Reddit backing: Reddit users seize on different companies to chat about daily, causing wild swings in the stock price. CLOV ran up 360% in 2 days and, ultimately, 180% in a year. 
  • Volume: With Reddit users backing this stock in recent weeks, the volume has increased tremendously. The more volume a stock has, the more it can move. 
  • Increased potential: Clover Health is only operating in 11 states, including New York, Texas, Arizona and South Carolina. Clover Health is trying to offer its products in more states in the near future. 

Cons to Buying CLOV Stock

Even though the healthcare sector shows promise, buying CLOV shares has a potential downside:

  • Poor financials: Despite the most recent surge in share price, Clover Health does not have the best financials. Benzinga Pro shows CLOV has a long-term debt of $24.2 million.
  • Volatility: CLOV has a higher risk of volatility because of Reddit users taking over. CLOV was down 150% in the last 2 1/2 months. It has seemed to maintain current levels and is trying to find support in the mid $8 range. 

Evolve with Clover Health

Even though CLOV stock movement has been affected by Reddit users, it is a good company looking to gain more market share with upcoming advancements in the healthcare sector. This stock could quickly regain all-time highs with good news. It has the potential for a swing trade with an increase in volume. 

Frequently Asked Questions

Q

Is CLOV a buy?

A

CLOV has been the talk of Reddit users and others as a potential healthcare sector play. The products Clover Health offers are good for many American seniors. With a little bit more advancement in product offerings, the company could expand nationwide. CLOV is still heavily talked about in financial group chats. It has trended at least once a week in one of the biggest Discord chats. If CLOV can create a strong support level, it may be a buy. If it does not quickly find support, CLOV could potentially go to all-time lows.