One of the most popular meme stocks this week, Clover Health (CLOV) saw huge gains mid-week as retail traders on Reddit pushed up its price in response to a short squeeze. While CLOV may have a good future ahead of it, Molina Healthcare (NYSE:MOH), UnitedHealth Group (UNH), and Cigna Corporation (NYSE:CI) are better buys right now.As I’ve covered in an article last week, meme stocks have been the talk of the Street this year. This week investors heard quite a lot about Clover Health (CLOV). CLOV is a healthcare technology company that uses its proprietary technology platform to collect, structure, and analyze health and behavioral data to improve medical outcomes and lower costs for patients.
In fact, this health insurance technology company was one of the most-discussed stocks on Reddit this week. The stock rose 20% on Tuesday and 9.5% on Wednesday as Reddit traders pushed its value up after talk of the company becoming a target of a short squeeze. Even Chamath Palihapitiya, the venture capitalist behind the company, discouraged traders from buying the stock due to being a short squeeze target.
Retail traders nonetheless kept pushing its price higher. While the company could have a great future ahead of it, I would advise investing in other health insurance stocks, as the volatile nature of CLOV's price swings may be too high for risk averse investors. Companies such as Molina Healthcare Inc . (MOH), UnitedHealth Group Inc. (NYSE:UNH), and Cigna Corporation (CI) are more established and rank highly in our proprietary POWR Ratings system.