Even with the uncertainty in both domestic and global economies, investing in the stock market is something that many people want to do. Even if your financial position isn’t in great shape, you might want to invest so that you don’t miss out on any opportunities. Whatever your reasons might be, we can help. Below we have a list of the best new stocks to invest in 2021.
At the end of each year, U.S. News selects 10 stocks to buy for the year ahead. This year’s list spans blue-chip stocks, pandemic plays, hedges against a lousy economy and companies that were simply undervalued compared to peers. The goal, of course, is to beat the market. To that end, our picks have some work to do before the year is up: These 10 stocks as a portfolio are up 9.7%, compared to the S&P 500’s 18.1%. Fundamentally, however, none of what made these businesses attractive to begin with has disappeared. Here’s a look at the best stocks to buy list for 2021, how each pick has performed and what these names still have going for them as we enter the year’s latter innings.
Best Stocks to Buy Right Now
Not all stocks are created equal, and with a massive number of retail investors flooding into the market since the new year, it has been a bit of a wild ride. With unprecedented gains being created in the market, many expect a continuation of this recent increase in investment activity. At the moment, there are five types of stocks you should be looking into:
- Growth. 2021 has been a year of growth so far. With stimulus boosting the United States economy and a flood of new retail investors making their first trades, money is piling into publicly traded companies at the moment, with the top stocks on the market growing at compelling rates.
- Green. There has been a major change of guard in Washington, and changes in D.C. ultimately equate to changes in the stock market. The Democratic party, led by President Joe Biden and in control of all branches of government, has been clear about its views toward climate change and changes it believes need to take place in the energy industry. As such, companies focused on clean, renewable energy are doing overwhelmingly well.
- E-Commerce. The coronavirus pandemic led to a surge in shopping online. Many consumers who would never have purchased anything online suddenly found themselves buying groceries, gifts, clothing, and even medicine over the Internet. Moreover, many liked the experience and might not go back. As a result, e-commerce has been booming and will likely continue to do so.
- Travel. Vaccines are becoming increasingly available and more than half of Americans are now fully vaccinated. As more people receive their vaccines, they’ll not only be more comfortable traveling, they’ll be eager to do so after a long stay at home. As a result, the best travel stocks are likely to see a strong rebound ahead.
- Health Care. Health care stocks are generating quite a bit of excitement. While most companies working on COVID-19 vaccines and therapeutics are realizing overvaluations, there are plenty of opportunities to invest in companies across the sector, which is growing at a staggering rate.
With that in mind, here are nine of the best stocks to look into in April of 2021:
1. Amazon (NASDAQ: AMZN)
The coronavirus pandemic is a horrible thing. More than 219 million people around the world have gotten sick, with more than 4.55 million people losing their lives. There’s no downplaying the seriousness of this illness.
However, even the darkest cloud has a silver lining.
Online retail companies have become prime beneficiaries of the crisis. For months, consumers were told to stay at home, only leaving the confines of their homes in search of absolute necessities.
While there were already growing numbers of consumers shopping online, travel restrictions and temporary lockdowns led to a tidal wave of consumers who shifted from brick-and-mortar shopping to shopping on the web. Naturally Amazon.com, one of the most successful e-commerce websites in the world, seemed likely to benefit greatly from this trend — and benefit it has.
Since June 2020, the company’s stock price has climbed from around $2,545 per share to nearly $3,500 per share. With this kind of growth, the e-commerce pioneer has not only become one of the largest companies in the world, but one of the strongest growth stocks on the market today.
As a result of the growth, the stock trades with a pretty high valuation, with a price-to-earnings (P/E) ratio of around 60, compared to the e-commerce average of around 55. However, the high price-to-earnings ratio is offset by the outsize earnings and revenue growth seen from Amazon.com when compared to other e-commerce players.
Perhaps that’s why all 32 analysts covering the stock rate it a Buy according to TipRanks, which outlines an average price target of a whopping $4,202.39 per share.
All in all, with e-commerce dominance at a time when more and more people are shopping online, Amazon.com stock is one to watch closely.
2. Upwork (NASDAQ: UPWK)
Upwork is a tech play that’s focused on connecting contractors and those in need of contract work in the gig economy. Those who need articles written, graphics created, websites built, voiceovers added to videos, and a long list of other services will find talented experts in these crafts on the company’s website.
Of course, Upwork needs to make money in the process, and it makes plenty. In order to use the platform, freelancers must agree to the following fee schedule:
- Freelancers pay 20% of their billings to the company for the first $500 paid by a new customer.
- From $500.01 to $10,000 in billings of the customer, the platform charges a fee equal to 10% of billings.
- Finally, for all billings of a single customer with total billings of $10,000.01 or more, the company takes a 5% cut.
Prior to the coronavirus, the gig economy was already taking off. Consumers who have dreamed of working from home finally had a way to do so. Then, as the world shut down, the gig economy boomed.
Businesses deemed to be nonessential were forced to close their doors. This left many workers without a job and standing in unemployment lines of record length. Many of these displaced workers began looking for work-from-home opportunities, leading to a flood of demand for Upwork and its competitors. Moreover, this increased demand is likely to continue.
There have also been major changes for employers. Employers now have access to talent around the world, not just in close proximity to the office. What’s more, companies are finding that not only do workers prefer to work remotely, but they’re more effective when they do, according to Business News Daily. COVID-19 led countless companies to realize this, many of which say they’ll never bring employees back into the office, according to CNN.
Analysts absolutely love this stock because of the growing work-from-home trend and Upwork’s ability to capitalize on it, demonstrated by its significant revenue and earnings growth. According to TipRanks, four analysts cover the stock, all of whom rate it a Buy. Price targets range from $57 and $76 per share, averaging out to $67.50 and suggesting the potential for nearly 50% gains compared to current levels. Granted, you shouldn’t blindly follow Wall Street analysts, but these ratings are encouraging.
The bottom line here is simple. Upwork has seen tremendous growth already, and considering the flourishing of the gig economy and the trend toward remote work, that growth is likely to continue. As a result, the stock is one to pay close attention to.
3. Apple (NASDAQ: AAPL)
Staying on the tech trend, Apple is next on the list. With a market cap of more than $2.46 trillion, the tech giant is one of the largest companies in the world, the largest company listed on the Dow Jones Industrial Average, and like the stocks mentioned above and the majority of those mentioned below, it has become a household name.
As you likely know, Apple is the creator of the iPhone, iPad, and Mac computers, with the iPhone representing the vast majority of the company’s revenue.
The stock had a strong start to the year, but gains tapered off in late January and again in late February, bringing the stock down to what many believe is a discount. While the stock has rebounded from the lows, there’s still a strong argument that the stock is undervalued.
In big tech, there are few growth stories that are quite as strong as Apple’s, especially in the fiscal third quarter of 2021. Here are some key stats from the earnings report:
- Revenue. The company generated $81.43 billion in revenue, up 36.44% on a year-over-year basis.
- Net Income. Net income came in at 21.74 billion, up 93.2% year-over-year.
- Earnings Per Share (EPS). Finally, EPS came in at $1.3, up 100% year-over-year.
All of these figures beat analyst expectations by wide margins.
Some argue that the growth is the result of Apple’s status as the leading global device manufacturer. Others argue that the growth was fueled by spending as a result of stimulus payments given to U.S. consumers. Some say it’s a mix of the two.
No matter where it came from, this growth is impressive.
It’s these impressive numbers that form the basis for the overwhelmingly positive analyst opinions on the stock. Out of 23 analysts covering AAPL stock, 17 rate it a Buy, six rate it a Hold, and none rate it a Sell, with an average price target of $167.09 per share, representing the potential for more than 12% gains, according to TipRanks.
Notwithstanding recent volatility, the stock is currently trading with a relatively high valuation when compared to the industry average. However, like other big tech names on this list, the high valuation associated with the stock is offset by the strong growth seen in revenue and earnings, growth that many believe will continue for the foreseeable future.
Nvidia (NASDAQ:NVDA) is a powerhouse fabless semiconductor and technology company that has long been recognized as a leader in graphics processing units. The company has its hands in many megatrends, such as:
- Gaming
- Cloud data centers
- Autonomous vehicles
- Smart cities
- Robotics
- Cryptocurrency mining
- 5G
- Artificial intelligence
- Omniverse
- Next-era computing
Nvidia is one of my highest-conviction stock picks. The company’s stock has pulled back from recent all-time highs of $230, and in today’s video, I provide my opinions on the stock and levels I would consider attractive entries for long-term investors.
Conclusions
It seems hard to believe but its 2019 already. The last New Year’s parties are over. While the champagne glasses are being washed, it is time to start thinking about your financial future. More importantly, you need to start taking some concrete steps to ensure that your financial dreams come true.