The IPO market is buzzing with excitement following the hugely successful listing of eToro Group Ltd (NASDAQ:).
This article will analyze how to identify stocks in the social trading sector and the criteria for assessing whether their market value is undervalued and offers significant growth prospects.
Social trading is one of the most significant innovations in the world of financial investment. This practice allows investors to connect, share strategies, and even replicate the trades of more experienced traders through dedicated platforms. In an era where technology is transforming every aspect of our lives, social trading offers an accessible and collaborative way to navigate the financial markets.
The Social Trading Boom
Social trading is an investment method based on collaboration between traders through online platforms. These platforms, such as eToro or NAGA, serve as digital spaces where users can observe the activities of other investors, discuss strategies, and, in many cases, copy the trades of experienced traders. The main goal is to make the investment process more transparent and accessible even for those who do not have in-depth knowledge of the markets.
Understanding the Social Trading Industry
The fundamental principle of social trading is information sharing. More experienced traders make their portfolios and trades available, allowing others to monitor their movements on the markets in real time. Users can choose to copy the strategies of these professionals, which means that every trade made by the expert will be automatically replicated in the copier’s portfolio. This process, called “copy trading,” is ideal for those who want to participate in the markets but do not have the time or expertise to analyze them in depth.
The two most interesting listed companies in the social trading sector are eToro Group and NAGA Group AG (N4G). We intend to analyze them using the best software available, capable of accurately calculating a company’s value and intelligently analyzing financial statements, making a task that was once very complex much simpler. For those involved in stock trading, INVESTING PRO is an indispensable tool.
I decided not to invest in E Toro, as IPOs tend to drive up the price of shares beyond their actual value. Statistically, out of 10 IPOs, 8 times the value of the shares decreases in the first year. As shown in the image, Investing Pro flags two warnings: the price is currently correct, indicating limited growth potential, and profit margins are low.
A strategy I often use with Investing Pro is to select a high-potential sector, such as social trading, and the stock with the most growth potential is NAGA.
Why NAGA Group AG excels
NAGA Group AG is a German company that develops and markets applications in the financial technology sector. The company’s main product is NAGA TRADER, a social trading application that allows users to trade foreign currencies, indices, equities, and cryptocurrencies via Contracts for Difference, copying the trades of other traders.
A notable feature of NAGA TRADER is its dual exchange function, which allows users to replicate the strategies of other crypto investors and trade cryptocurrencies. 
I decided to invest in this technology company, NAGA Group AG (N4G), based on my analysis, which coincides with that of Investing Pro. As you can see in the image above, according to Investing Pro, the stock has high potential. In addition, the signals relating to the profit margin are relevant, which Investing Pro considers to be very positive. 
The stock is also very interesting from a technical point of view. Prices are rising with above-average volumes and are about to cross the 200 moving average. In my opinion, prices will reach 1.50 in 2026, with a potential upside of over 100%.