After banner returns in 2020 despite it being a stock picker’s market, here are our three top stock picks for 2021.
Despite COVID-19, stock markets did well in 2020, with the Dow Jones Industrial Average generating a 9.7% total return including dividends, the S&P 500 gaining 18.4%, but both came up far short of the Nasdaq Composite’s amazing 45% gain.
Those were certainly very good returns in such an uncertain year, but they were far less than what you might have gained with some judicious stock-picking. And stock-picking was the name of the game last year, especially in technology and biotech stocks. Unsurprisingly, those were the stocks that fared the best in my Top Stock Picks contest that I hold for my Wall Street’s Best Investments newsletter every year.
The Results for 2020 are In!
In 2020, my contributors at Wall Street’s Best Investments (about to be re-named Wall Street’s Best Digest) beat the markets, hands-down, averaging a return of 180.2%! And our top five contributors posted stellar returns, averaging a very healthy 252.7%.
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Here were their 5 Top Stock Picks of 2020:
|Joseph Cotton||Cotton’s Technically Speaking||Inovio Pharmaceuticals (INO)||742.86|
|John Gardner||Equity Research & Portfolio Evaluation||The Trade Desk (TTD)||181.05|
|Chris Temple||The National Investor||Piedmont Lithium (PLL)||166.83|
|Jeffrey Hirsch||Stock Trader’s Almanac||Horizon Therapeutics (HZNP)||94.03|
|Tom Bishop||BI Research||Anavex Life Sciences (AVXL)||78.81|
Those are some amazing returns!
But now we’re on to 2021, and I’ve just asked my contributors for their top stock picks for this year. With more than 40 choices, it wasn’t easy to choose just three for this article. But reviewing their sectors, their fundamental and technical indicators, and my view of where the economy and markets are heading this year, here are three that look very promising:
Top Stock Picks for 2021
Contributed by John J. Gardner of ERPE Excerpts is Blink Charging Co. (BLNK). Here is what John wrote:
“Do you drive an electric vehicle (EV)? Or know anyone who does? Chances are you do. As of August 2020, it was estimated that cumulative sales of EVs in the U.S. since 2010 is 1 million. All ‘plug-in’ vehicles exceed 1.6 million. This number now tops 2 million globally. You can safely bet on many more soon.
“The future of cars is electric. As of late 2019, auto manufacturers had pledged to spend a total of $225 billion developing new EV’s in the near future. Recently, Toyota announced plans to generate half of its sales from electrified vehicles by 2025. Expectations are that there will be 550 EV models by 2022. One prediction for gross vehicle usage by 2040 is that 500 million passenger EVs will be on the roads globally.
“Charging stations will keep them rolling. Blink Charging is a leading owner, operator, and provider of electric vehicle charging. Blink has over 23,000 EV charging stations throughout the U.S., Europe, and the Middle East. Blink stations are conveniently located at airports universities, stadiums, supermarkets, workplaces, and other locations. Invest in Blink as it charges EVs and boosts your portfolio.”
Next up, Alphabet Inc. (GOOGL) was chosen by Richard Moroney of Dow Theory Forecasts. Here’s why:
“Alphabet has been on the Focus List for 52 months, more than twice the tenure of the next longest holding, Microsoft (MSFT). During that time, the shares have more than doubled, reflecting consistent sales and profit growth.
“We don’t expect the move away from traditional advertising toward digital to reverse, and YouTube—Alphabet’s most profitable advertising market—continues to gain popularity with younger audiences. Demand for cloud services is also on the rise.
“Much has been made of the company’s ‘moon shots,’ massive investments in unproven businesses such as autonomous cars and drone delivery. So far, none of these has paid off. However, the core business continues to do the heavy lifting, and if one of those special projects blossoms into a big winner, so much the better.
“After a profit decline this year, analysts target a return to roughly 20% growth in 2021 and 2022.”
Lastly, Bob Howard of Positive Patterns picked Altria Group, Inc. (MO), saying:
“The Covid tragedy has sped up many a thing. Just look at technology: we have had 10 years of advances in one year in 2020—by necessity. This will also be true of pot as the tax/revenue starved state governments (and Uncle Sam in D.C.) search desperately for new revenue streams. I believe the legalization of pot will also be accelerated. Every referendum on the ballot about pot in November passed. It’s just a matter of time before you can buy the ‘Willie-Nelson Reds’ right next to the Marlboros at 7-11.
“The obvious beneficiary of pot legalization is the tobacco companies. Ah, but I hear you say, “They don’t grow any pot.” Well, they don’t grow any tobacco either!
“It’s another sin tax for the government and will be treated as such, and available soon at retail/outlets like 7-11. Right now, legal pot costs about 2 times as much as illegal pot, and at some point, the ‘twain’ will meet. My guess had been 2025, but with the government badly needing tax revenues, I expect this to be accelerated quite quickly now.
“Altria will have a new revenue stream by 2025, and likely before that. It will mean huge (new) profits for MO and the stock already yields 8%+. The chart is looking much better. I note MO is one of the few companies that raised the dividend (in 2020). The stock is a bargain under 45 with exciting upside potential.”
I think 2021 will also be a year for stock pickers. So, my advice is to be judicious in your selections, and make sure you set your price targets and stop losses from day one. Happy investing!