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Here're the 5 Top Stock Trades for 2021

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Tirthankar Chakraborty
·5 min read
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After a tumultuous start to 2020, Wall Street ultimately ended the year on a strong note. It turned out to be a good one for US stocks but it’s also true that your returns would have certainly varied based on your investment choice.

For instance, inclination toward high growth tech stocks rather than having a diversified portfolio would have helped you to earn more. This is because the Nasdaq-100 that generally constitutes more tech stocks had given a return of about 44% compared with the broader S&P 500’s yield of nearly 16%. Of course, a diversified portfolio diminishes risks; however, it does limit your income.

Thus, it’s imperative for investors to look for growth opportunities this year and stay invested in high-flying tech stocks for remarkable returns. It goes without saying that the broader economy is expected to do much better than what it did last year, with the coronavirus vaccine breakthrough raising hopes of finally being able to control the pandemic.

Meanwhile, a rather disappointing jobs data for the month of December has fueled hopes for further stimulus measures, something that augurs well for the economy. And with the economy expected to be in good shape, most of the tech stocks are expected to experience increased profitability.

In particular, the post-coronavirus economic recovery is going to be a tailwind for semiconductor stocks. At the same time, revolutionary changes in the field of technology like artificial intelligence, machine learning, and 5G wireless will no doubt drive chip sales this year. In fact, as quoted in an Investor’s Business Daily article, the World Semiconductor Trade Statistics expects chip sales to rise 8.4% to $469 billion in 2021.

Notably, things are looking up for the banking industry as of now, following the torrid beating it took last year. With the yield curve steepening, and optimism growing regarding more federal and infrastructure spending, bank stocks are very much in vogue. Thus, it’s imperative for astute investors to tap the rebound in the banking industry for handsome gains.

The real estate sector presents another good investment opportunity. Particularly, home builders are expected to do exceptionally well this year, thanks to low mortgage rates and demand for new homes rising with more people moving to suburbs.

It’s worth pointing out, that this year climate change has become a sensitive issue, and investors are in all likelihood expected to pour money into companies that are focusing on environmental issues. Notable among them are companies that are manufacturing electric vehicles (EV). These vehicles are known for curbing CO2 emission, and are expected to see an increase in demand this year, giving internal combustion engine (ICE) companies a run for their money (read more: 3 Electric Vehicle Stocks That Could Keep Gaining Into 2021).

Lastly, investors should also focus on marijuana stocks this year. There is without doubt growth opportunity in this field especially after voters in South Dakota, Arizona, New Jersey, and Montana legalized recreational marijuana last year. Several states have already legalized such marijuana for adults, with almost 36 states legalizing medical usage of marijuana as well. Expectations regarding decriminalization of marijuana at the Federal level are also increasing.

For this reason, we have highlighted five solid stocks from the aforesaid winning areas that you should keep an eye on this year. Here are the stocks –

NVIDIA Corporation NVDA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit, or GPU. The company, currently, carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current year earnings increased 6.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 67.9%.

JPMorgan Chase & Co. JPM is one of the largest financial service firms in the world. It serves consumers and businesses through personal service at bank branches. The company, currently, has a Zacks Rank #2. The Zacks Consensus Estimate for its current year earnings increased 11.5% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 219.2%.

Beazer Homes USA, Inc. BZH designs, builds and sells single family homes. The company, currently, sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for its current year earnings increased 20.6% over the past 60 days. The company’s expected earnings growth rate for the current quarter and year is 2.9% and 2.1%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

Tesla, Inc TSLA is literally helping the world by relying on sustainable energy by selling EVs. The company, currently, flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current year earnings increased 4.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 60.4%.

Tilray, Inc. TLRY is a pharmaceutical company. It develops cannabis based medicines, drugs, drops and oil products. The company, currently, has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for its current year earnings increased nearly 29% over the past 60 days. The company’s expected earnings growth rate for the current year is 79.6%.

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JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report
 
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
 
Tilray, Inc. (TLRY) : Free Stock Analysis Report
 
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