10 Best Stocks For 2021: After An Unprecedented Year, What’s Next?

Advertisement

best stocks - 10 Best Stocks For 2021: After An Unprecedented Year, What’s Next?

Source: by InvestorPlace

Editor’s note: This article is part of InvestorPlace.com’s Best Stocks for 2021 contest.

This time last year, I can’t imagine anyone thought we’d be where we are today. Our lives have been drastically changed, with terms like “social distancing” and “PPE” becoming common lexicon.

Yet, despite the dramatic changes, closed restaurants and theaters, empty bars and office buildings, much has stayed the same. Among those constants is the simple fact that the stock market is still the best vehicle for putting your money to work for you. Yes, that’s true, even after the market meltdown last spring … even as we continue to see rising case numbers and terrible unemployment figures.

Of course, which stocks are winners and which are losers has shaken up a bit. Whether looking at government, trade policy or the after effects of the novel coronavirus, there are a number of market catalysts waiting to send certain stocks sky-high and knock others off their perch. But either way, investors really don’t know what to expect in the coming year.

While optimists may point to the arrival of coronavirus vaccines as a catalyst for reopening, more bearish observers aren’t simply being paranoid when they say that might not be as big a boost as hoped. And while the S&P 500 has notched new all-time highs in 2020, no one can guarantee it’ll do the same in 2021.

As we kick off a new year, it’s once again time for InvestorPlace.com’s “Best Stocks” contest. We’ve rounded up the top nine picks from our contributors and one chosen by you, the readers.

Here are the 10 best stocks for 2021:

  • Bed Bath & Beyond (NASDAQ:BBBY)
  • Disney (NYSE:DIS)
  • Enterprise Products Partners (NYSE:EPD)
  • Fiverr (NYSE:FVRR)
  • IZEA Worldwide (NASDAQ:IZEA)
  • Lockheed Martin (NYSE:LMT)
  • Nio (NYSE:NIO)
  • OncoCyte (NYSEAMERICAN:OCX)
  • Osisko Gold Royalties (NYSE:OR)
  • Walgreens Boots Alliance (NASDAQ:WBA)

In alphabetical order by ticker below, these companies were selected by our experts for expected gains over the coming year. Starting from the Dec. 31 closing price, we’ll track how they do in the new year, including dividends. So make your picks and get ready to see what 2021 brings.

Best Stocks for 2021: Bed Bath & Beyond (BBBY)

bed bath & beyond storefront (BBBY)

Source: Shutterstock

Investor: Bret Kenwell

Bed Bath & Beyond probably isn’t top of mind for investors when it comes to locking in gains. After all, this domestic retailer was deemed non-essential during the early days of the novel coronavirus pandemic and has been poorly managed in recent years. Presently trading under $20, BBBY stock is a long way off from its glory days.

But InvestorPlace contributor Bret Kenwell sees plenty of opportunity here. He points out that BBBY posted Q2 earnings of 50 cents per share, blowing analyst predictions of a 29 cent loss out of the water. He also commended management under CEO Mark Tritton for the company’s free cash flow and its moves to pay off debts.

While the ongoing vaccine rollout suggests we’ll see a shift away from quarantine trends, our new normal won’t look like the old one. Bed Bath & Beyond has seriously expanded its digital capabilities this year, and the weekly and monthly price charts suggest more good news to come.

Click here to read more about BBBY.

Disney (DIS)

Disney Stock Has Major Problems Well Beyond Coronavirus

Source: Ivan Marc / Shutterstock.com

Investor: John Jagerson and Wade Hansen

Disney is a company that needs little introduction. This seemingly infallible entertainment and theme park juggernaut had a rough time last year. However, we need to put that in perspective. A 20% gain in a year like 2020 is nothing to sneeze at. Still, investors had their higher hopes dashed by the spread of Covid-19.

While that might make shareholders antsy, it shouldn’t. InvestorPlace contributors John Jagerson and Wade Hansen argued last year that Disney stock’s problems weren’t about the company, but rather “systemic weakness in the market” due to the pandemic. And they see the resilience Disney showed last year as just the start.

Particularly important for DIS stock at this moment are its subscription-based revenues coming from streaming services Hulu and Disney+. The latter service boasted 10 million signups on its first day in November 2019; fast forward to December 2020, and the service had an enviable 86.8 million subscribers. And as we continue to live through our socially-distanced new normal, management anticipates acquiring millions more.

Plus, when vaccinations and treatments allow us to congregate in large groups once more, DIS stock will seriously benefit, not only from its theme parks, but also from the reopening of movie theaters. There’s a lot to like here.

Click here to read more about DIS.

Enterprise Products Partners (EPD)

A magnifying glass zooms in on the website of Enterprise Product Partners (EPD)

Source: Casimiro PT / Shutterstock.com

Investors: Charles Sizemore

Where were you when oil spot prices went negative last April? With global stay-at-home orders in full force, consumption dropped significantly and oil and natural gas producers were left scrambling. Capped with a strong Democrat showing in November’s U.S. elections, 2020 had investors more interested in piling into trendy alternative energy companies than dipping their money in oil just to see it go up in smoke.

Enterprise Products Partners, then, might seem like a contrarian pick. After all, even InvestorPlace contributor Charles Sizemore calls EPD a “stuffy, boring, normal” stock. But this midstream oil and natural gas company might be just what we need after an incredibly abnormal 2020.

Sizemore likes that this company has low debt leverage for the space, and he likes that it largely relies on fees, rather than commodity prices, for revenues even more. This conservative management style helped the company tremendously when the fracking boom went bust due to massive oversupply of crude oil.

Throw in a healthy dividend and capital gains, and we could see returns of 40% to 60% in 2021.

Click here to read more about EPD.

Fiverr International (FVRR)

The Fiverr (FVRR) website displayed on a mobile phone screen.

Source: Temitiman / Shutterstock.com

Investor: Louis Navellier

Whether it’s hitching a ride, grabbing takeout or getting groceries, the gig economy has a snappy tech-based solution investors are sure to love. So it makes sense InvestorPlace’s Louis Navellier thinks Fiverr International could be the best stock of 2021.

Launched in the wake of the 2008 recession, FVRR is no stranger to economic unease. And launching during a period of major layoffs and unemployment was a boon in its own way; companies may not have been hiring, but workers were certainly looking.

More importantly, they were looking with Fiverr. So when the good times started to roll again, and companies were looking to expand, FVRR was ready and able with a large stable of talented freelancers and contractors to connect. Now the company boasts 2.8 million customers buying services in more than 160 countries.

Up 807% in the past 12 months and sporting a market cap of $7 billion, Navellier sees plenty of growth still on the table, both in existing markets and untapped ones.

Click here to read more about FVRR.

IZEA Worldwide (IZEA)

Source: Shutterstock

Investor: Luke Lango

Microcap software company IZEA Worldwide runs a platform for connecting influencers with brands looking for marketing partners. And while the word “influencer” may bring to mind tabloid celebs shilling hair vitamins and waist trainers, the addressable market here is wider than many realize.

Per “The State of Influencer Marketing 2020 Benchmark Report,” almost 80% of brands experimented with influencer marketing last year, and 90% of those found it highly effective. Which is to say, influencer marketing is the future.

Even better? It’s not yet prominent today. That means there’s huge potential for players in the space. InvestorPlace’s Luke Lango went as far as saying this little stock could see as much as 60x returns in 2021.

Now, before you get too excited, let’s all bear in mind this is a penny stock. But it’s one with a sensible business model, in an emerging sector, boasting 14 years of experience in paid placements on blogs and social media. With risk comes reward.

Click here to read more about IZEA.

Lockheed Martin (LMT)

A Lockheed Martin (LMT) Space Systems sign in Sunnyvale, California.

Source: Ken Wolter / Shutterstock.com

Investor: Bob Ciura

Lockheed Martin looks like a wise defensive pick whether you’re an investor or a general. But after a stomach-churning year in the markets, long-term growth, a solid dividend yield and a recession-resistant business model, “defensive” sounds pretty good. As the largest U.S. defense company, LMT is in the business of fighter jets, satellites and missile defense systems, among other things.

Some investors might balk at the idea of investing in the tools of war. But even amid the economic malaise of 2020, Lockheed Martin posted revenue and earnings growth over the first three quarters. Even if vaccinations and reopenings fail to buoy the economy to prior heights, LMT stock should continue its upward trajectory.

Add in acquisitions and buybacks, plus an attractive valuation with an expanding price-to-earnings ratio, and Lockheed Martin is a sensible addition to any portfolio.

Click here to read more about LMT.

Nio (NIO)

A Nio (NIO) sign outside of the company's facilities in Shanghai, China.

Source: Andy Feng / Shutterstock.com

Investor: Reader’s Choice

Nio wasn’t looking too hot for the first half of 2020, but managed to turn things around for an astonishing 1100% gain for the year as a whole. And while the electric vehicle space has been red-hot over the past year, Investorplace readers have faith Nio will continue to make big strides.

There’s plenty of reason to believe them. First, Nio’s delivery numbers have been growing consistently through the year. In 2020 Q1, the company saw 3,838 deliveries; by Q3 that number was up to 12,206. Full year 2020 numbers are due out this month, but it’s near-certain the number will be significantly above the 20,565 vehicle deliveries NIO reported for 2019.

There’s also the specter of new technologies possibly being announced at the company’s annual “Nio Day,” and CEO William Li’s prognostication of the company hitting annual production of 150,000 vehicles by the end of 2021. When it comes to the vehicles of tomorrow, you could do a lot worse than driving off the lot with NIO stock.

Click here to read more about NIO.

OncoCyte (OCX)

A scientist holding a test tube in a stock image

Source: Shutterstock

Investor: Matt McCall

While the ongoing pandemic may be the biggest health issue most of us face, it isn’t the only one. Even as hospitals are inundated with coronavirus patients, people still need treatment for heart attacks, broken bones and cancer. When it comes to the latter, OncoCyte could potentially change the rules of the game.

A molecular diagnostics company offering genetic testing, OncoCyte serves patients and physicians by giving them deeper, more personalized information for making healthcare decisions. That translates to lower costs and improved outcomes. And there’s huge potential for growth in this sector of medicine.

Previously, molecular diagnostics accounted for just 3% of healthcare spending, but helped to make 70% of all healthcare decisions. Talk about bang for your buck. As InvestorPlace’s Matt McCall astutely puts it, “when you have this kind of discrepancy, you also have a massive opportunity.”

McCall sees that opportunity in the early detection of cancer, as well as in testing for immunotherapy responses. Although revenue in 2020 was negligible, revenue is projected at $7 million this year, $18 million next year and almost $60 million in 2024. That’s huge growth. It would be a shame to miss out on such an opportunity.

Click here to read more about OCX.

Osisko Gold Royalties (OR)

Gold nuggets on top of American paper money representing gold stocks

Source: Shutterstock

Investor: Eric Fry

After a year like 2020, it makes sense that investors have become enamored with precious metals once more to hedge against volatility and inflation. Although many have bought into commodity futures or mining operations, there’s another piece of the pie that shouldn’t be overlooked: royalty and streaming revenues from financing mining companies.

Osisko Gold Royalties came into being in November 2020, after Osisko split into two companies. One focused on mining and the other focused on royalty and streaming assets. This restructuring should have serious benefits, as it takes a hybrid company and fine-tunes its appeal for precious metals investors.

OR stock retains an 88% interest in mining counterpart Osisko Development, worth about $580 million. And by becoming a pure-play royalty company, Osisko could see investors reevaluating the stock to put it more in line with other pure-play peers.

On the flip side, spinning out mining operations could unlock further value in the assets Osisko already owns. And consensus on the street is positive, with expectations of doubled earnings per share over the next two years. And that doesn’t account for potential new gains from mine exploration.

Click here to read more about OR.

Walgreens Boots Alliance (WBA)

Walgreens (WBA) store exterior and sign in Pompano Beach, Florida

Source: saaton / Shutterstock.com

Investor: Ben Reynolds of Sure Dividend

Last but not least, Walgreens Boots Alliance may strike you as the least sexy pick on this list. But this nigh-ubiquitous pharmacy retailer is an underdog that has been in the gym for 45 consecutive years increasing its dividend. And that’s not all this Dividend Aristocrat has to offer.

Looking at historic P/E averages and dividend yields, WBA stock is at a lower valuation with a rather high dividend yield. On their own, either one of these factors would make Walgreens a mispriced asset. Taken together, they suggest a lot of room for upside even without additional growth.

Of course, there is long-term growth on the table, as seen by the company’s resilience to e-commerce and growth in pharmacy segments. Furthermore, WBA has a clear competitive moat that has allowed it to keep raising its dividend with little to fear. Throw in the fact that prescription sales are fairly recession-resistant and it makes sense that WBA is poised for big things to come.

Click here to read more about WBA.

Vivian Medithi is a web editor for InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. 


Article printed from InvestorPlace Media, https://investorplace.com/2021/01/10-best-stocks-for-2021-after-an-unprecedented-year-whats-next/.

©2024 InvestorPlace Media, LLC