It’s been a torrid year for investors, with the novel coronavirus wreaking havoc across the world. Markets took a massive nosedive in March amid lockdown restrictions by various governments. Such volatile conditions left investors concerned about when markets will bounce back from the slowdown. However, in the past few months, with the easing of restrictions, investors are again looking at new stocks to buy in diversifying their portfolios. The S&P 500 is continuing its rally and gained another 12%.
There are two significant factors for the stock market’s recovery in 2021. Firstly, the positive news surrounding the Covid-19 vaccines will significantly improve investor sentiment. Efficacy rates for the vaccine are encouraging, and with widespread deployment in most countries, markets return to maximum efficiency.
Secondly, there is the election of Democrat Joe Biden in the 2020 general election. The consensus is that Biden’s tenure should be more stable from a socio-political standpoint. Additionally, he is also expected to build strong relationships with different countries, which will heavily impact the stock market. Hence, here are three new stocks to buy that could get you a little richer next year:
- Cresco Labs (OTCMKTS:CRLBF)
- Allegro Microsystems (NASDAQ:ALGM)
- Walgreens Boots Alliance (NASDAQ:WBA)
New Stocks to Buy: Cresco Labs (CRLBF)
Cresco Labs is a Chicago based cannabis and medical marijuana company operating in nine legalized states in the U.S. The company primarily generates its revenue from its 19 operational dispensaries. Its dispensaries are located in states with massive growth potential, such as Illinois, which could soon become a multi-billion-dollar marijuana market. Additionally, its wholesale cannabis business is also the largest in North America. CRLBF stock is up a healthy 70% compared to the 12-month S&P 500 return.
In its most recent quarter, the company generated upward of $90 million in wholesale revenue. Analysts expect revenue of $477 million this year and more than $800 million next year. Moreover, it recently acquired Origin House, which provides its access to several distribution licenses across California. Cresco will be pushing toward profitability and is likely to become one of the needle-movers in the cannabis market.
Allegro Microsystems (ALGM)
Allegro Microsystems is a provider of semiconductor solutions for energy-efficient systems and produces integrated circuits for sensor systems. The company recently had its IPO debuting at $14 per share, grossing more than $440 million. Analysts are upbeat about the company’s prospects citing its ability to cash in on the growing EV market, technology platform leadership and Industry 4.0. Hence, ALGM stock will be building a head of steam heading into 2021.
Despite the challenges presented by the pandemic, Allergo demonstrated revenue recovery in the current quarter. Net sales in the second quarter of fiscal 2021 were at $136.6 million, an 18.8% sequential improvement. Automotive revenue rose by a healthy 17.2% sequentially as well, along with a 19.7% increase in industrial revenue from the prior-year period. It completed the acquisition of photonics and 3D imaging specialists, Voxtel, which should aid the company’s plans to develop the next generation of advanced driver assistance systems (ADAS).
Walgreens Boots Alliance (WBA)
Pharmacy giant Walgreens Alliance has been in a spot of bother since last month after Amazon (NASDAQ:AMZN) made its entry into the pharmacy business. Amazon’s pharma plans became apparent when it purchased PillPack last year. However, Walgreens devised a strategy to fend off the impending pressure. It plans to reduce its annual expenditures by roughly $2 billion by 2022 and to invest the savings in expanding its digitization plans.
Moreover, the company also announced its partnership with leading healthcare providers in VillageMD to open up 700 clinics at different Walgreens locations. The company is hoping to increase its margins by focusing on the grassroots level. Walgreens currently has a forward P/E ratio of 8.1, which is significantly lower than its peers. At the same time, its dividend yield is at an impressive 4.9%, which further adds to the attractiveness of WBA stock.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.