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Here are 21 stocks (with closing prices through Dec. 16) that you should consider putting on your shopping list in 2021.
1.CROWDSTRIKE (CRWD, $179.79)
The December cyberattack on cybersecurity firm FireEye, and a hack of U.S. government agencies by suspected Russian hackers, highlights the importance of data security. That’s why CrowdStrike, a cybersecurity firm with a security product that detects cloud workload threats and stops data breaches on equipment ranging from servers to laptops, is well-positioned in a growing market, says Victoria Greene, founding partner and portfolio manager at G Squared Private Wealth. “CrowdStrike is stealing business from established providers,” Greene said. In its quarter ending Oct. 31, CrowdStrike added 1,186 new subscription customers and reported an 86% rise in sales. Greene says its recurring revenue growth, which jumped 81% in the quarter, could grow 50%-plus for the next few years. That growth trajectory is key, as the stock was up 260% in 2020 thru Dec. 16.
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4. WALT DISNEY (DIS, $173.12)
Best known for its theme parks, its animation movies like “Frozen,” and an extensive film content library, Walt Disney is now getting a boost from its year-old Disney+ streaming service. “Disney’s got fresh momentum,” says Mitch Rubin, co-founder of RiverPark Funds. The company recently said it already has 86.8 million paid Disney+ subscribers worldwide, exceeding Wall Street expectations by a lot. Disney, which is boosting its monthly fee by $1 to $7.99 starting in March 2021, expects as many as 260 million paid Disney+ subscribers by the end of fiscal 2024. Revenues will also get a boost when the coronavirus dissipates and people return to Disney theme parks and go back to movie theaters to watch Disney movies, Rubin adds.
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11. GUARDANT HEALTH (GH, $123.62)
While Covid-19 tests got all the attention in 2020, sophisticated cancer-related tests are morphing into a big investment opportunity too amid the precision oncology trend, says Callinan. Guardant Health’s “next-generation” diagnostic test enables doctors to analyze genetic mutations of a patient’s cancer, which helps them prescribe a treatment. What’s exciting is the test involves a “simple blood draw rather than a tissue biopsy,” Callinan said. The company, which increased revenues 23% in the latest quarter, is well-positioned for long-term growth.
12. PAYPAL (PYPL, $230.20)
Investors looking for a disruptor that can take advantage of the trend towards touchless payments accelerated by the pandemic should consider PayPal, which owns Venmo, says Daniel Milan, managing partner at Cornerstone Financial Services. While this year’s stock run-up has stretched the stock’s valuation, “there’s plenty of room to go.” There are still growth opportunities in non-cash payment options as “widespread adoption” occurs. PayPal’s launch of its cryptocurrency business, which allows customers to trade digital currencies in their PayPal accounts and eventually to use cryptocurrencies as a funding source for purchases at 26 million merchants worldwide, is another revenue driver.
13. HILTON (HLT, $104.41)
If there’s one hotel or travel stock to pick that will perform better than the market as a “reopening” trade, it’s Hilton, says Milan. Demand for hotel rooms “will pick up as the pandemic fades.” There’s no denying that empty rooms and shuttered hotels during the pandemic “damaged Hilton’s business,” Milan says. But the well-known brand with a strong balance sheet “should come out of the other end of the pandemic as a best-in-class option” for travelers, Milan said. Even though Hilton has rallied 80% from its March lows, it’s still in negative territory for 2020.
14. AMERICAN EXPRESS (AXP, $119.00)
American Express’s credit card business was hurt by less spending and travel during the pandemic. And business remains tough, with revenues falling 20% to $8.75 billion and net income diving 39% to $1.07 billion in the third quarter. But Milan says American Express will benefit from the “reopening” of the global economy and an increase in spending from consumers and businesspeople in the U.S. and abroad. American Express CEO Stephen Squeri said the financial company has taken steps to boost business. Changes include moves to drive spending and customer loyalty, launching a “Shop Small” campaign to support small merchants in 18 countries, and opening its network in China.
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15. AUTOZONE (AZO, $1,190.50)
When the economy and peoples’ lives return to a more normal routine once pandemic fears ebb, people will start driving again to work, to visit friends, and to vacation getaways. “Miles driven should increase,” says John Mantia, co-founder and director of finance at PARCO. And more driving means auto parts supplier AutoZone will sell more stuff in their retail stores and online. “The uptick in miles driven will equate to more wear-and-tear on vehicles,” Mantia said. The company’s recent announcement that it will buy back 5% of its outstanding shares signals it is “focused on driving shareholder return,” Mantia said.
16. NIELSEN (NLSN, $19.49)
Nielsen TV ratings have long been the way to measure how big an audience watched TV shows. But in a digital world where viewers are also streaming shows on smartphones and computers, more accurate measurement is needed to capture the true size of a viewing audience. Nielsen’s recent announcement that it will be launching Nielsen ONE, which will measure audiences watching on both TV or digitally, should breathe life into this value stock trading at about nine times its annual earnings, a valuation that’s more than 50% cheaper than the broader market. “They will have a new ratings system that will count linear TV as well as streaming,” says Charlie Bobrinskoy, vice chairman and head of investment group at Ariel Investments. The stock could rise from around $20 to $30 next year, he says.
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21. HEALTH CARE SRVS (HCSG, $26.78)
This company, which provides janitorial and dining services to nursing facilities, remains a good business despite the pandemic, says Lewis. It has a strong national presence, but still serves less than 20% of the nursing homes in America. “They have a long runway,” Lewis said. During the pandemic, its customers have been hurt financially due to fewer patients in facilities and higher costs due to the need for temporary nurses and protective care equipment. The good news: the company is seeing demand from new customers, says Lewis. Once the Covid-19 vaccine gets distributed to nursing staff at these facilities, Health Care Services Group’s customers will be able to shore up their finances and the company will start to convert new, financially stable customers into contracts with recurring revenue streams, Lewis says.