Mercifully, 2020 is drawing to a close and we can all look forward to a better year ahead in 2021. However, a lot has changed in the final two months of the year — there is a new president-elect in Democrat Joe Biden and a vaccine against Covid-19 is being rolled out across the world.
These events, and others, have been influencing investor decisions and impacting stock markets in recent weeks. Bitcoin is trading at new all-time highs, the Russell 2000 index of small cap stocks has been outpacing the S&P 500 index of large cap companies, cyclical stocks are now outperforming technology securities, and many of the so called “stay at home” stocks that flourished during pandemic-imposed lock downs are sinking.
So, how should one position their portfolio heading into 2021? In this article, we look at seven of the best stocks to buy now as political winds and investor sentiments shift at the close of 2020.
- Cryoport (NASDAQ:CYRX)
- PayPal (NASDAQ:PYPL)
- Disney (NYSE:DIS)
- Roku (NASDAQ:ROKU)
- Citigroup (NYSE:C)
- New York Times (NYSE:NYT)
- Tesla (NASDAQ:TSLA)
Best Stocks To Buy Now: Cryoport (CYRX)
Let’s start with a vaccine play. Many investors are wondering where they can invest to capitalize on the roll out of vaccines against Covid-19 across the U.S. and the wider world. The answer: Cryoport.
While few people may have heard of Brentwood, Tennessee-based Cryoport, the company is now front-and-center in the distribution of the vaccines. It is the world leader in what’s known as “cold chain logistics solutions” for the bio-pharmaceutical industry. The firm transports vaccines and other pharmaceutical products that need to be stored at extremely cold temperatures.
Few companies have the technology, infrastructure and resources to successfully transport medications that need to be stored at super cold temperatures. The vaccines against Covid-19 must be kept extremely cold until they are administered to ensure their effectiveness.
The vaccine produced by Pfizer (NYSE:PFE) needs to be kept at minus 70 degrees Celsius (which is colder than Antarctica), while the vaccine made by Moderna (NASDAQ:MRNA) needs to be stored at minus 20 degrees Celsius. Given these extreme requirements, there are only a few companies that can properly distribute the Covid-19 vaccines to locations all around the world. And Cryoport is one of them.
CYRX stock is marching higher in anticipation of its role in vaccine distribution. The company’s share price is up 204% year-to-date. And the stock should continue trending higher as Covid-19 inoculations gain steam in 2021.
PayPal (PYPL)
Online payments company PayPal was a good investment before the price of Bitcoin skyrocketed. But the company’s association with the cryptocurrency has helped propel its share price to new heights in recent weeks. PYPL stock has gained more than 15% since Nov. 12, the day the company launched its crypto trading platform for U.S. customers.
And PayPal sees big things ahead for cryptocurrencies and other digital assets. CEO Dan Shulman has said that the company will launch a global crypto service in early 2021, and that the company is prepared to support central bank digital currencies as they become available.
PYPL stock has been on fire for most of 2020, up 178% from its March low to $237 a share today. But momentum has been building due to the renewed enthusiasm for Bitcoin and other cryptocurrencies. PayPal has also gotten a boost this year from the pandemic that has accelerated the use of online payments.
The company’s total payment volume increased 36% during the third quarter, the highest increase in PayPal’s history. In October, PayPal had its highest-volume transactions for one day ever. Transactions rose 30% to $4 billion in a single day. Impressive!
Disney (DIS)
The Disney+ streaming platform saved the House of Mouse during the pandemic. As the company’s theme parks were shuttered and its cruise ships remained docked, the number of paid subscribers to the streaming service went up, up and up.
A year after its launch, Disney+ had more than 85 million subscribers worldwide as people signed up to watch branded content that includes Star Wars, Marvel, National Geographic and Pixar animation. Given its success, it should come as no surprise that Disney is planning to put considerable resources toward its streaming content.
But now that the pandemic is moving into our collective rear view mirror, Disney is expected to begin firing on all cylinders as its theme parks, cruises and live entertainment return with a vengeance.
DIS stock recently hit a fresh all-time high of $179.45 on news that the company expects to have as many as 260 million subscribers by 2024, and on analyst upgrades to the stock. Disney not only survived the Covid-19 pandemic, it managed to thrive during the global health emergency. And it is well-positioned to succeed even further in 2021.
Roku (ROKU)
Internet-connected television manufacturer Roku has been building steady gains all year. The company, which enables people to access streaming services directly from their TV set without the need for a secondary device such as a gaming console, saw ROKU stock jump to an all-time high of $352.12 a share after it announced a deal to provide HBO Max content on its devices.
In all, Roku has about 46 million active accounts, which the company says reach about 100 million individuals. It is also a growing powerhouse when it comes to marketing upcoming movies and television shows. While ROKU stock has gained 420% since March, it really caught fire in mid-September and has been one of the best performing tech stocks this fall, more than doubling its share price to $354.
According to Deutsche Bank, Roku is the market leader when it comes to connected televisions. Roku has a 43% share of internet-connected television sets, compared with 35% for Amazon (NASDAQ:AMZN) Fire TV and 27% for Apple (NASDAQ:AAPL) TV. There also remains plenty of room left for Roku to grow considering that more than two-thirds of consumers have not yet purchased television that can connect directly to the Internet. And growing is what Roku is all about.
The company reported that a record 14.6 billion hours were streamed through Roku internet-connected TVs in Q2, representing a 65% annual increase in consumption. As Roku secures more premium content, such as HBO Max, those numbers are likely to keep rising throughout 2021 and beyond.
Citigroup (C)
Banks have been a big beneficiary of the rotation into cyclical stocks in recent months, and this includes Citigroup. C stock has risen 45% since the end of October and recently traded above $60 a share for the first time since late February, just prior to the global pandemic causing stock markets to crash.
Since the uncertainty around the U.S. presidential election ended in mid-November, Citigroup’s stock has been on a steady incline. The share price has also gotten a boost from the recent approval of a Covid-19 vaccine and continued assurances from the U.S. Federal Reserve that it will continue doing whatever is necessary to help the American economy.
While it will take some time for the U.S. economy to fully recover from the impact of the global pandemic, Citigroup should continue to rally in 2021, helped by a recovery in consumer banking segment and the continued growth on the sales and trading sides of its business.
The fourth-largest bank in the U.S. should also benefit from a credit recovery and the eventual increase of interest rates, as well as rising employment and overall consumer spending.
There is also an expectation that Citigroup may resume share repurchases in 2021, which would further boost the price of C stock. Analysts currently have a median price target on Citigroup’s stock of $65.50 and a high estimate of $99 a share.
The New York Times (NYT)
Anyone who thinks that The New York Times is old media would be wrong. The company, whose main asset continues to be its flagship newspaper, is one of the few media outlets to successfully transition to the era of real-time digital news.
The Times continues to flourish while other newspaper companies around it struggle and close their doors. In fact, it is doing so well that some analysts predict the company will soon hold a monopoly position when it comes to traditional news gathering and dissemination. Not only has The New York Times successfully executed the paywall on its website, but it is profitable from monthly subscriptions that now top seven million. Advertising dollars are now just icing on the cake for the venerable media company.
And while it may still be primarily a newspaper company, The New York Times is not shy about adopting new technologies to enhance its products and services. The company has been moving aggressively into podcasts, and experimenting with virtual reality and three-dimensional technology to both augment and enhance its news stories.
And, the company continues to offer among the very best columnists and commentary found anywhere in the world. If all that weren’t enough, consider too that The New York Times Company is in fantastic financial shape as it is sitting on a cash pile of $800 million, with $250 million available through a revolving credit line. And, the company no longer has any debt, having paid off a loan last year that allowed it to buy back its headquarters building in Midtown Manhattan. Being in a no-debt position is practically unheard of for a large U.S. company today — especially one that operates in today’s media landscape.
NYT stock has responded lately, rising nearly 30% since mid-November to just under $50 a share. Since March, the stock is up 89%.
Tesla (TSLA)
Tesla had a monster year in 2020 and its stock has run extremely high, up more than 750% from its March low at just over $640 a share. However, despite its amazing growth this past year, many people on Wall Street remain bullish on TSLA stock and see it running further in the New Year.
A big catalyst for future growth will be Tesla’s addition to the S&P 500 index on Dec. 21. TSLA stock will soon be added to a multitude of index funds and pensions that track the index of the 500 largest American companies.
In addition to its inclusion in the S&P 500, Tesla is expanding its line-up of vehicles and refining its battery technology. The company is also testing software that will turn all Tesla vehicles into autonomous self-driving vehicles (if owners choose to do so), and is developing an app store that will enable developers to release apps and games for Tesla cars, trucks and sport utility vehicles (SUVs).
Plus, Tesla has been granted approval from the Chinese government to sell its Model Y SUV in the Asian powerhouse. There seems to be no slowing down Tesla in its quest to dominate the market for electric vehicles.
On the date of publication, Joel Baglole held long positions in DIS, MRNA, ROKU and TSLA.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
