Let’s face it, 2020 was a monumental drag, the kind that inspired people to smash pinatas that looked like the novel coronavirus. So in case you’re wondering, it’s definitely not too late to shout Happy New Year – especially when the happiness can last all year long. Behold, my top stocks for 2021!
Think of it like this: Your portfolio is begging to be pampered. Certain investments call out for your attention. Wasn’t one of your resolutions to find the best and forget the rest?
While what you leave behind is ultimately up to you, I’m going to cast affirmative votes for these seven stocks. And the winners are (or will be):
- Amazon.com (NASDAQ:AMZN)
- Microsoft (NASDAQ:MSFT)
- Xpeng (NYSE:XPEV)
- Plug Power (NASDAQ:PLUG)
- Canopy Growth Corp. (NASDAQ:CGC)
- Hyliion Holdings (NYSE:HYLN)
- Chewy (NYSE:CHWY)
Top Stocks for 2021: Amazon (AMZN)
Trying to stop Amazon at this point is futile, not unlike trying to swim against the tide of the Amazon River when the reptiles are particularly hungry. Is there anything founder and CEO Jeff Bezos can’t do? If he were to walk into a trading pit and claim he could levitate, I’d sign up for a class.
As I write this, Amazon has a market capitalization of $1.6 trillion. Percentage-wise, it’s not all that far behind Apple (NASDAQ:AAPL), the world’s most valuable company at $2.22 trillion. AMZN stock soared 71% in 2020, a fabulous achievement for a company that’s grown so big. So what does 2021 hold that even Prime can’t deliver?
So far in 2021, shares of Amazon are flat. But this may mark the last time I can write “shares of Amazon” and “flat” in the same sentence. The consensus price target sits at $3,845, which would mark an increase of 20%. That’s a strong sign that the Street believes AMZN stock is undervalued. No wonder 41 out of 48 analysts call AMZN stock a “buy.”
Long gone are the days when Microsoft’s c-suite goof Steve Ballmer earned the title of world’s worst CEO. After six years under the capable leadership of Satya Nadella, MSFT stock is once again a high-tech darling. It finished 2020 up 40%, which has added another chapter to a most remarkable feat. That is, MSFT stock has had an interrupted run upward for at least five years.
Using March 2020’s novel coronavirus crash as a starting point, shares are up more than 70% to date. And on the opposite shore of Microsoft’s Redmond, Washington, headquarters, an astounding 28 of 31 analysts call MSFT stock a “buy,” with two more calling it “overweight.” No one at this point advises to sell.
If the price targets for MSFT stock hold up, then investors could see a return of 18.7% by the end of 2021. Some analysts see it rising as high as 35.9%. What’s more, its latest quarterly report, released Jan. 26, held excellent news: 17% revenue growth and earnings of $2.03 per share, versus the $1.64 expected by analysts.
Top Stocks for 2021: Xpeng (XPEV)
XPEV stock has an electric vehicle winner – a stealth winner at this point – with an attractive price point. In making my case that it belongs among our top stocks of 2021, I point to its luxury P7 sedan. It’s not at all known to American motorists because you can only purchase it in China. Let’s just say it was brought to life by French designer Rafik Ferrag and definitely turns heads. And as goes the P7, XPEV stock will follow.
So far, the P7 is a huge hit. Sales from May 2020 increased in every month but one through December 2020. Looking closer, 192 P7s were sold in May. In August, the tally landed four shy of 2,000. And in December, 3,691 P7s were sold – a month-over-month jump of 35%.
What does Wall Street think? CNN Business shows a buy consensus for XPEV stock, with seven of 11 analysts giving it a “buy” rating, two a “hold” and two a “sell.” Earnings per share are underwater at -$1.03 – but here’s where it gets exciting. The median price target over the next 12 months is expected to climb by 580%.
Plug Power (PLUG)
By simple description, Plug Power is a company that makes hydrogen fuel cells for forklifts and the like. (Other forms of transport may not be far behind.) And so far as Wall Street is concerned, PLUG stock sits in rarified air. It definitely qualifies as one of my top stocks for 2021.
Following a 2020 when PLUG stock finished up by 950%, 10 of 12 analysts cited by the Wall Street Journal call it a buy, with just two calling it a hold. With its third-quarter report on Nov. 9, the company disclosed gross billings of $125.6 million, which reflects year-over-year growth of 106%. That made for the best third-quarter run in the company’s history.
As for what happened to Plug Power in Q4 2020, investors will have to wait a few weeks. The company has not announced an earnings report date, though it’s expected to drop in the first week of March.
Top Stocks for 2021: Canopy Growth Corp. (CGC)
Investors beat up a bit on cannabis company Canopy Growth Corp. in 2020, and they were by no means alone. Constellation Brands (NYSE:STZ), which owns a 38% stake in CGC, forced the ouster of co-founder and co-CEO Bruce Linton. The reasons were many, from light revenue to distribution foul-ups. And as it turned out, the move was good. Very good, in fact, for investors and the health of this Canadian company.
Since that move in July 2020, CGC stock has matured from a mediocre also-ran to a cannabis force: up 143%. It winds up as one of the top stocks of 2021 based in part on solid performance. But factors within the sector also come into play.
Four more states made recreational marijuana use legal on Election Day: New Jersey, Arizona, South Dakota and Montana. If you take the long view, consider that pot was banned across the U.S. until Colorado fully legalized it in 2012. No matter how slow or fast the Marijuana Express runs from here on out, the train has definitely left the station, with CGC stock chugging at a brisk clip.
Hyliion Holdings (HYLN)
As electrical vehicle companies go, Hyliion Holdings Corp. is something of an outlier on 18 wheels. Unlike the many outfits that build cars, vans and SUVs from scratch, Hyliion takes diesel trucks and transforms them into hybrids or EVs. It’s also going to transform the bottom lines of many investors.
Unique among the top stocks of 2021, HYLN stock will benefit from filling a neglected niche in an exploding sector. That is: It doesn’t build Class 8 trucks so much as fit the axles of existing vehicles with high-tech attachments. Smart.
Yes, a dramatic run-up in September has come and gone, making HYLN stock look like a flat tire. But since it reverse-merged with Tortoise Acquisition Corp. in June, shares are still up more than 60%. With the Biden administration already putting the petroleum industry on the ropes, the hybrid solution Hyliion offers will only come into more demand.
Top Stocks for 2021: Chewy (NYSE:CHWY)
I don’t see any downside so far as CHWY stock goes, unless you want to steal the doggie treats you buy at its online pet products site from your ravenous, ticked-off Rottweiler. Looking back over the last 12 months, the stock’s incline looks unstoppable: up 257%. Yet it deserves a place on the top stocks for 2021 for many other reasons.
Among them, Chewy makes its pet products home on the internet. And that’s where things get interesting. Very interesting. You see, the Covid-19 pandemic permanently changed consumer habits, including the Sunday run to grab Bowser some dog food. Just as AMZN stock enjoyed a banner year from this sea change, Chewy did as well, and there’s nothing to suggest buying habits will suddenly reverse once the pandemic starts to recede. In fact, more customers could easily come its way via word of mouth.
It also helps that Chewy belongs to PetSmart, the pet superstore chain that acquired it in 2017 for $3.35 billion – the largest price paid for an ecommerce site at the time. Looking ahead, 11 of 15 analysts label Chewy a “buy.” Or, if you prefer, a fetch.
On the date of publication, Lou Carlozo held long positions in AMZN, MSFT, PLUG, XPEV and CHWY.