Editor’s note: This article was updated on May 13, 2021, in the wake of news about the U.S. Department of Justice and other agencies investigating Binance.
Falling Covid-19 cases and increasing vaccination rates stateside have led to a general improvement in the economic outlook. Meanwhile many of us are looking forward to spending more time with loved ones. If you are planning on buying a gift for an important person in your life, why not gift them stocks? Today, I’ll discuss seven stocks and cryptos you could buy in the coming weeks.
At InvestorPlace.com, we regularly write about shares of companies that buy-and-hold investors could include in long-term portfolios, both for capital growth and dividend income. With the Rule of 72, you could calculate how soon your investment could double in value due to compounding. If you take the number 72 and divide it by the annual return (percent), then you get the amount of time it takes for the investment to double.
Let’s say an investment returns 10% a year. Then you have, 72/10 = 7.2. Put another way, in about seven years, your investment would double in value. So far in the year, the S&P 500 index is up over 11%.
The past year has seen another asset class, namely cryptocurrencies, catch the attention of individuals. For instance, the top two cryptos by market capitalization (cap), i.e., Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD), are up about 440% and 1860%, respectively.
Now, thanks to rising interest from institutional investors, crypto currencies are also becoming mainstream investment tools. Therefore, today’s article includes names that address the crypto space, too.
With that in mind, here’s our list of stocks and cryptocurrencies to buy in May:
- Binance Coin (CCC:BNB-USD)
- Cardano (CCC:ADA-USD)
- CME Group (NASDAQ:CME)
- iShares Russell 1000 Value ETF (NYSEARCA:IWD)
- Mastercard (NYSE:MA)
- Mitsubishi Electric (OTCMKTS:MIELY)
- Polkadot (CCC:DOT-USD)
Stocks to buy: Binance Coin (BNB-USD)
52-Week range: $15.02 – $690.93
Let’s start with this: The Department of Justice and other agencies are reportedly investigating Binance. If they find problems with Binance itself, this whole premise goes straight out the window. But if you don’t think the investigation has legs, read on.
Binance cryptocurrency exchange, currently the largest one worldwide, started operations in 2017. In July of the same year, Binance Coin came into existence through an initial coin offering (ICO). It currently powers the Binance Ecosystem. For instance, those crypto investors who have BNB-USD in their accounts on the exchange typically get a a discount on transaction fees if they use Binance Coin. Some outside service providers, mostly in the travel industry, also accept BNB-USD for flight and hotel bookings.
You might be interested to know that there will soon be the Binance (non-fungible token) NFT marketplace for NFTs and digital collectibles. On May 5, Binance announced Alphonso Davies, professional football player for Bayern Munich will launch his first NFT collection on their Binance NFT marketplace. The development got the attention of NFT investors.
For our U.S.-based readers, we should remind you that the Binance crypto exchange does not serve U.S. residents anymore. Rather it has a dedicated U.S. exchange, Binance.US.
52-Week range: $0.05 – $1.95
Cardano, first released in 2017, is now one of the top ten altcoins with a market cap of $59 billion. ADA-USD has been hot so far in 2021 as returns have exceeded 3,300%. $1,000 invested in Cardano in early January would now be worth $34,000.
The Cardano platform is used for developing smart contracts built on a proof-of-stake (PoS) algorithm, a type of consensus mechanism used by blockchain networks. Developers can build decentralised applications, novel tokens or improve the decentralized finance (DeFi) space.
Recent research highlights, “the ever-increasing size of blockchains like Bitcoin, Ethereum, and so on has led to issues of scalability.” Scalability “means the limitations of the blockchain for the processing of multiple transactions.”
Analysts emphasize the potential of Cardano to address scalability. ADA-USD is currently trading at around $1.82. Interested investors could consider buying the dips.
Stocks to buy: CME Group (CME)
52-Week range: $146.89 – $218.80
The CME Group is well known as the operator of exchanges that allow market participants to trade derivative products based on interest rates, equity indexes, foreign currencies, energy, metals and agricultural commodities. Its main segments are the Chicago Mercantile Exchange, Board of Trade of the City of Chicago, New York Mercantile Exchange and Commodity Exchange. The group has also launched futures and options on Bitcoin as well as futures for Ethereum.
The company reported first quarter 2021 financial results on April 27. Revenue was $1.25 billion, down from $1.52 billion in the prior year period. On an adjusted basis, net income was $641 million and diluted earnings per share were $1.79. A year ago, they had been $836 million and $2.33, respectively. As of March 31, CME Group had approximately $1 billion in cash.
CEO Terry Duffy cited, “Since the start of 2021, we have experienced strong demand for our products as clients looked to manage risks associated with the potential for a post-pandemic economic recovery. Trading volumes in Q1 have returned to pre-pandemic levels, with ADV in the first quarter representing our third-highest quarterly ADV ever, and open interest climbing above 100 million contracts.”
In the past 12 months, CME shares have returned around 19.4%. Its current price supports a dividend yield of about 1.68%. The stock’s forward price-to-earnings (P/E) and price-to-sales (P/S) ratios are 31.35 and 16.48, respectively. Potential profit-taking could push the shares below $200, a level that would offer better value for long-term investors.
iShares Russell 1000 Value ETF (IWD)
Our next choice is an exchange-traded fund (ETF), i.e., the iShares Russell 1000 Value ETF. The fund focuses on large- and mid-capitalization U.S. businesses that are regarded as undervalued relative to peers. IWD tracks the Russell 1000 Value Index.
The fund started trading in May 2000 and currently has 857 holdings. Net assets stand around $53 billion.
As far as sector weightings are concerned, financials leads the ETF with 21.38%, followed by industrials (13.69%), healthcare (12.71%) and communication (9%). The top 10 names comprise around 15% of net assets. Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B), JPMorgan Chase (NYSE:JPM), and Johnson & Johnson (NYSE:JNJ), lead the stocks in the roster.
IWD, which is up about 15% year-to-date (YTD), hit a record-high in May. Despite the recent gains, interested investors might want to keep the fund on their radar. It is a stable dividend payer with blue-chip stocks. Its dividend yield is 1.67%, and the ETF has an expense ratio of 0.19% per year.
Stocks to buy: Mastercard (MA)
52-week range: $263.96 – $401.50
Mastercard is one of the largest payment processors in the world, having processed $4.8 trillion in purchase transactions in 2020. Users can make payments by using its brands, which include MasterCard, Maestro and Cirrus.
Mastercard reported first quarter results on April 29. Net revenue was $4.2 billion, up 4% from the prior year period. Adjusted net income was down by 6% to $1.7 billion, or $1.74 per share. Cash and equivalents stood at $7.2 billion.
CEO Michael Miebach remarked, “We’ve made strong progress in delivering on our multi-rail strategy, as we integrate the Finicity and Nets corporate services teams. And, we continue to invest for the long-term, adding to our trust and digital identity capabilities with the planned acquisition of Ekata.”
Increasing digitalization and e-commerce adoption have become crucial growth drivers for Mastercard. A move to a cashless society means more revenue for Mastercard. As of Dec. 30, 2020, the company had issued 2.8 billion Mastercard and Maestro-branded cards.
Mastercard is working with blockchain technology group R3 to create a new cross-border payment system. It is also putting resources into its Crypto Card partner program so its partners can bring cryptocurrency payment cards to market.
So far in the year, shares are up about 0.5%. MA stock’s forward P/E and P/S ratios stand at 46.3 and 23.87, respectively. A potential decline toward $360 would improve the risk/return profile of the shares. Finally, the current price supports a dividend yield of 0.49%.
Mitsubishi Electric (MIELY)
52-week range:$23.27 – $33.90
Our next stock comes from overseas. Japanese conglomerate Mitsubishi Electric manufactures and sells electrical equipment worldwide. Its core business segments include energy and electric systems, industrial automation systems, information and communication systems, electronic devices and home appliances.
Mitsubishi Electric reported consolidated financial results for fiscal 2021 on April 28. Revenue increased for the second half of fiscal 2021 but decreased in the annual results by 6% from the previous year to $38.27 billion. Revenue decreased in all segments due to the adverse effect of the pandemic primarily in the first half. Net profit decreased by 13% from the previous year to $1.76 billion. Basic earnings-per-share was 82 cents in 2021, down from 95 cents in 2020. Free cash flow in fiscal 2021 stood at $3.34 billion.
Industrial Automation Systems segment saw a decline in the automotive equipment business due to lower demand for new cars in all regions except for China. China is a key growth driver for the the group. Management anticipates a 7% increase in revenue and 9% increase in net profit from fiscal 2021, mainly due to recovery in China as well as the U.S.
MIELY stock is down about 1.85% year-to-date, and the current price supports a dividend yield of 2.27%. In February, the shares hit a multi-year high. Its forward P/E and P/S ratios are 15.62 and 0.87, respectively. The conglomerate is likely to create shareholder value in future quarters, too. Potential investors could buy the dips.
Stocks to buy: Polkadot (DOT-USD)
52-week range: $2.69 – $41.79
Out final choice for today is Polkadot, a Swiss blockchain that started in 2016. It was created by the Ethereum co-founder Gavin Wood. What is unique about DOT-USD is that it enables developers to build their own blockchains and connect them with each other, allowing “cross-blockchain transfers of any type of data or asset, not just tokens.”
Analysts point out, “Polkadot is designed to operate two types of blockchains. A main network, called a relay chain, where transactions are permanent, and user-created networks, called parachains.” DOT-USD aims to act as the central point where all blockchains can share information. As a result, it could become a significant catalyst for the growth of decentralized applications. Investors have been buying into this prospect. Its market cap stands at $37.7 billion.
Several weeks ago, the digital currency investment group Osprey started a Polkadot trust product for its accredited investors. Coinbase is the fund’s custodian and the minimum investment is $25,000. The crypto is likely to reach new highs through the rest of the year.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.