As a new investor, you’re excited about investing. You’ve studied and developed a strategy, you’ve practiced with trade simulators, and now you’re ready to dive in. Now that you’re venturing into the stock market with your hard-earned money, you want to make sure that you’re investing in the right stocks.
The problem is that between the Nasdaq and New York Stock Exchange, there are a whopping 6,100 different stocks to choose from. With so many choices, where do you start?
The list below outlines the top stocks to buy in April of 2021.
Best Stocks to Buy in April 2021
Not all stocks are created equal, and with a massive number of retail investors flooding into the market since the new year, it has been a bit of a wild ride. At the moment, there are four types of stocks you should be looking into:
- Growth. 2021 has been a year of growth so far. With stimulus boosting the United States economy and a flood of new retail investors making their first trades, money is piling into publicly traded companies at the moment, with the top stocks on the market growing at compelling rates.
- Green. There has been a major change of guard in Washington, and changes in D.C. ultimately equate to changes in the stock market. The Democratic party, led by Joe Biden and in control of all branches of government, has been clear about its views toward climate change and changes it believes need to take place in the energy industry. As such, companies focused on clean, renewable energy are doing overwhelmingly well.
- E-Commerce. The coronavirus pandemic led to a surge in shopping online. Many consumers who would never have purchased anything online suddenly found themselves buying groceries, gifts, clothing, and even medicine online. Moreover, many liked the experience and might not go back. As a result, e-commerce has been booming and will likely continue to do so.
- Travel. Vaccines are becoming increasingly available. As more people receive their vaccines, they’ll not only be more comfortable traveling, they’ll be eager to do so after a long stay at home. As a result, the best travel stocks are likely to see a strong rebound ahead.
With that in mind, here are the best stocks to look into in April of 2021.
1. Amazon (NASDAQ: AMZN)
The coronavirus pandemic is a horrible thing. More than 100 million people around the world have gotten sick, with more than 2.3 million people losing their lives. There’s no downplaying the seriousness of this illness.
However, even the darkest cloud has a silver lining.
E-commerce companies have become prime beneficiaries of the pandemic. For months, consumers were told to stay at home, only leaving the confines of their homes in search of absolute necessities.
While there were already growing numbers of consumers shopping online, travel restrictions and temporary lockdowns led to a tidal wave of consumers who shifted from brick-and-mortar shopping to shopping on the web. Naturally Amazon.com, one of the most successful e-commerce websites in the world, seemed likely to benefit greatly from this trend — and benefit it has.
Since March 2020, Amazon.com’s stock price has climbed from just over $1,900 per share to more than $3,200 per share. With this kind of growth, Amazon.com has not only become one of the largest companies in the world, but one of the strongest growth stocks on the market today.
As a result of the growth, the stock trades with a pretty high valuation, with a price-to-earnings (P/E) ratio of more than 75, compared to the e-commerce average of around 55. However, the high price-to-earnings ratio is offset by the outsize growth in both revenue and earnings seen from Amazon.com when compared to other e-commerce players. Perhaps that’s why all 31 analysts covering the stock rate it a Buy according to TipRanks.
All in all, with e-commerce dominance at a time when more and more people are shopping online, Amazon.com stock is one to watch closely.
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2. Alphabet (NASDAQ: GOOG | GOOGL)
Alphabet, the parent of the leading online search engine Google, is yet another big tech play that’s seen incredible growth as of late. Moreover, this growth is likely to continue.
Not only is Alphabet a big tech player, it’s also a roundabout coronavirus pandemic recovery play. About 70% of the company’s revenue comes from digital advertising. With more people shopping online today than ever before, the company’s advertising business has been booming.
In fact, growth in advertising revenue was a major driver in the more than 23% year-over-year growth rate Alphabet saw in overall revenue in 2020. This growth is also being seen in the company’s earnings, with earnings per share climbing from $9.87 in the first quarter of last year to $22.30 in the fourth quarter of the COVID-19 pandemic-riddled year.
Moreover, while Alphabet has maintained an impressive balance sheet for several years now, this growth is leading to even more strength in the company’s financial foundation. With a market cap of more than $1.4 trillion, Alphabet has become a goliath, and with no sign of slowing in the online shopping trend, this growth is likely to continue.
With a P/E ratio of about 35, Alphabet is trading with a higher valuation than its peers in the tech industry with an average P/E ratio of around 24. However, like Amazon.com, Alphabet is delivering outsize revenue and earnings growth, offsetting the relatively high valuation when compared to its peers.
Alphabet is also a favorite among analysts, with all seven who currently cover the stock rating it a Buy according to TipRanks.
Money is flying into tech and into companies that cater to the online shopping industry. With Google being a leader in digital advertising and more consumers shopping online than ever before, the stock is a match made in heaven for most investment portfolios.
3. Apple (NASDAQ: AAPL)
Staying on the big tech trend, Apple is next on the list. With a market cap of more than $2.25 trillion, Apple is one of the largest companies in the world, and like the stocks mentioned above and the vast majority of those mentioned below, it has become a household name.
As you likely know, Apple is the creator of the iPhone, iPad, and Mac computers, with the iPhone representing the vast majority of the company’s revenue.
The stock had a strong start to the year, but gains tapered off in late January and again in late February, bringing the stock down to what many believe is a discount. There’s a good reason for this belief.
In big tech, there are few growth stories that are quite as strong as Apple’s, especially in the fourth quarter of last year. Revenue grew across all categories:
- iPhone. iPhone revenues were up 17% in the fourth quarter of 2020 on a year-over-year basis. With the iPhone representing the lion’s share of the company’s revenue, this is a very exciting metric.
- iPad. iPad revenue saw an even more incredible climb, growing 41% on a year-over-year basis in the fourth quarter. This is exciting as well, considering the fact that the iPad represents about 10.5% of the company’s revenue.
- Wearables & Home Accessories. On top of the compelling growth seen in the two most important segments of Apple, the wearables and home accessories arm of Apple experienced a 30% increase in sales.
- Services. Finally, the company’s high-margin services business grew by 24% in the quarter.
Some argue that the growth is the result of Apple’s stature as the leading global device manufacturer. Others argue that the growth was fueled by spending as a result of stimulus payments given to U.S. consumers. Some say it’s a mix of the two.
No matter where it came from, this growth is impressive.
It’s these impressive numbers that form the basis for the overwhelmingly positive analyst opinions on the stock. Out of 27 analysts covering Apple, 20 rate it a Buy, five rate it a Hold, and three rate it a Sell, with an average price target of $150.52 per share, representing the potential for more than 10% gains, according to TipRanks.
Like other growth stocks, Apple is currently trading with a relatively high valuation when compared to the industry average. However, like Amazon.com and Alphabet, the high valuation associated with the stock is offset by the strong growth seen in revenue and earnings, growth that many believe will continue for the foreseeable future.
4. Gevo (NASDAQ: GEVO)
Gevo isn’t necessarily the type of company you would expect to see on a list like this. The company is anything but profitable, and the stock was still trading in the penny category in late 2020.
Nonetheless, Gevo has seen an exceptional rise thus far in 2021. Year to date, GEVO stock has climbed from just over $4 per share to around $14 per share, and there are several good reasons for the move.
Gevo is a clean energy company, but the company isn’t making solar panels, windmills, or batteries. Gevo is focused on the production of clean, renewable fuels.
Over the past several years, the company has perfected technology that allows it to turn renewable feedstock like waste wood and food scraps into clean, renewable fuels, including jet fuels that have been used to power commercial flights.
Recently, Gevo has been getting quite a bit of attention from proponents of clean energy and demand from airlines and fuel distributors around the world. That attention has been amplified in recent months as a result of a change in political tides.
With President Joe Biden in the White House and Democrats in control of Congress, many expect there to be major clean energy legislation in the coming months. As a result, companies that operate in the clean energy space are likely to benefit from the following:
- Grants. Grants will likely be provided to clean energy companies like Gevo to fund research and to increase the supply of clean energy products.
- Tax Cuts. The federal government is likely to further support clean energy companies through tax policies that benefit green energy producers, helping these companies to keep funds in house and offer more competitive pricing of clean energy to consumers.
- Increasing Demand. Many expect tax credits to be provided to consumers who take advantage of clean energy products. Should this be the case, consumer demand for these products will likely increase — yet another plus for Gevo.
Expecting a rise in demand, Gevo is in the process of building its first Net Zero production facility, where it will be able to produce massive amounts of clean fuel with a net zero carbon footprint.
At the same time, Gevo has a strong balance sheet due to a recent capital raise, and with the clean energy movement gaining steam, it has plenty of support from the retail investing community. All in all, Gevo is a stock worth its position on your watchlist.
5. The Walt Disney Company (NYSE: DIS)
The Walt Disney Company is yet another household name on the list. Even if you’ve never been to Disney World or DisneyLand, you likely grew up watching Mickey Mouse or another Disney character bouncing around on your television screen.
Moreover, if you’re like most millennials who have cut the cable cord and chosen to stream entertainment, you’ve at least heard about Disney+, if you’re not already one of its growing number of subscribers.
When it comes to investing in the company, there are two big reasons you may want to consider diving in:
- COVID-19 Recovery. The Walt Disney Company felt quite a bit of pain as a result of the COVID-19 pandemic. Without consumers wanting to travel, its theme parks, hotels, and cruise lines have been struggling. However, many argue that with vaccines emerging and case growth slowing, COVID-19 won’t be delaying consumers’ travel plans much longer. Should this be the case, these arms of The Walt Disney Company are likely to make a swift rebound. After all, even following a COVID-19 pandemic, it is the dream of many around the world to experience Walt Disney World, and that’s not going to change.
- Streaming Entertainment. One of the major drivers in Disney’s recent stock growth has to do with its activities in the streaming entertainment space, which it has knocked out of the park. Launched in November 2019, Disney+ had 86.8 million subscribers as of December 2020, up from 73.7 million in early October and 60.5 million in early August.
Between a likely recovery in The Walt Disney Company’s travel-related business and incredible growth in the company’s streaming entertainment business, the company is firing on all cylinders.
Although it’s never a good idea to blindly follow analyst opinions, it is helpful to use their opinions as a source of validation for your own. When it comes to The Walt Disney Company, analysts seem to love the stock: 26 analysts currently cover it, with 21 rating it a Buy and 5 rating it a Hold.
All in all, Disney has struggled from time to time, but you can never count the stock out. As was the case with the COVID-19 pandemic, the company has a history of pivoting and making changes that are best for its growth and its investors. That’s not likely to change. The Walt Disney Company has plenty of potential for dramatic growth ahead.
Pro tip: Before you add any stocks to your portfolio, make sure you’re choosing the best possible companies. Stock screeners like Stock Rover can help you narrow down the choices to companies that meet your individual requirements. Learn more about our favorite stock screeners.
6. Microsoft (NASDAQ: MSFT)
Founded in 1975 by Bill Gates and Paul Allen, Microsoft has grown to become a software powerhouse. Today, Microsoft has become a cloud computing powerhouse too, and has captured the attention of consumers, businesses, and government agencies alike.
In fact, one of Microsoft’s most important wins in the cloud computing industry came in October of 2019, when the company was awarded the Joint Enterprise Defense Infrastructure (JEDI) project from the U.S. Department of Defense. The project is expected to last for a term of 10 years and yield $10 billion in revenue for Microsoft.
Since Satya Nadella took over as the company’s CEO in 2014, Microsoft has been undergoing a fundamental shift away from traditional software and toward cloud computing and the use of the cloud to deliver software as a service (SaaS).
Today, Microsoft has three main cloud computing offerings, including Azure, the company’s cloud computing business; Office 365 productivity software, which is now available through the cloud in SaaS format; and Dynamics enterprise software, another cloud-based software suite that caters to enterprises.
The shift to the cloud has done quite a bit for Microsoft. As a result of the shift, Microsoft has been enjoying higher margins and wider adoption of its products, ultimately increasing sales. Microsoft Azure now accounts for about 20% of the cloud computing industry, a market share that has doubled in a matter of four years and is expected to continue growing.
Cloud computing is the way of the future. It’s reducing the cost of software, leading to AI and augmented reality capabilities, and giving businesses tools they never had before. And with Microsoft being one of the leading players in the industry, it’s likely to continue enjoying the fruits of its labor for the long haul.
That could be why all 24 analysts that are currently covering the stock rate it a Buy, according to TipRanks.
With its clear dominance in cloud computing and a versatile visionary like Satya Nadella as a leader, there’s plenty of room for growth in Microsoft stock ahead.
7. NextEra Energy (NYSE: NEE)
NextEra energy has nothing to do with travel or technology, and isn’t necessarily a winner as a result of the COVID-19 pandemic either. Nonetheless, there are plenty of reasons to be excited about NextEra Energy.
While you may not know the name NextEra Energy, you likely know the name of one or two of its subsidiaries, which provide electricity to millions of homes and businesses across the U.S. Combined, it is the largest publicly traded utility company in the world. Some of the company’s largest subsidiaries include:
- Florida Power & Light. Florida Power & Light, also referred to as FP&L, is the largest provider of electricity in the state of Florida.
- Gulf Power. Gulf Power handles the provision of electricity to nearly half a million customers in northwest Florida.
- Florida City Gas. Florida City Gas is the premier provider of natural gas to homes and businesses in the state of Florida.
Utilities stocks have been a safe bet from a historical perspective. Not only is growth in this category easy to predict, the vast majority of strong investment opportunities in the category pay strong dividends. However, the simple fact that NextEra Energy is a massive utilities company isn’t enough to make this “best of” list.
This is a clean energy play.
Years before anyone could have known what would come of the 2020 election season, NextEra Energy saw value in clean energy. So, it began shifting its focus away from nuclear power plants and into clean energy.
Today, the company is the world’s largest producer of clean, renewable wind energy, and it plays an important role in the U.S. solar energy industry. With the likely shift away from the burning of fossil fuels and toward the use of clean, renewable resources that’s taking place, NextEra Energy’s investments in clean energy infrastructure are likely to pay off in a big way, making the stock one for the watchlist.
8. United Airlines (NASDAQ: UAL)
United Airlines is a pure COVID-19 travel recovery play. With control over 13% of the United States domestic air travel market, it’s a name you likely know well or at least have heard of.
The airline industry has been suffering for some time. Who wants to be breathing recycled air thousands of feet in the air in a metal tube with hundreds of people they don’t know during the COVID-19 pandemic? Nobody, that’s who.
Like all other publicly traded airline companies, United Airlines lost billions of dollars in 2020. These dramatic losses have led to a seriously low share price, which will prove to be a massive undervaluation as the travel sector begins to recover.
That could happen sooner than you think.
Vaccines have been administered to consumers for weeks, and the availability of these vaccines increases by the day. As a result of vaccines making their way into arms, likely combined with warmer weather as winter ends, the COVID-19 new case trend is starting to reverse, with growth in case counts falling from December and January highs.
That’s great news for airlines and any other stock in the travel industry.
As COVID-19 cases continue to wane, people aren’t just going to be more likely to travel, they’re going to be itching for it. If you’re like most people, you’ve been stuck in your house for nearly a year. Maybe you decided to abort the annual vacation plans, you haven’t seen your family much, and you’re going stir crazy. So, what do you need?
As soon as the pandemic is largely under control, consumers are going to start traveling again, and I’m expecting to see a big boom in space. Moreover, considering the economic impact of COVID-19, consumers are probably going to be looking for the best deals they can get on travel, which bodes well for United because it’s a discount airline.
At the same time, while Delta Airlines and Southwest Airlines have already begun their recovery, United Airlines has traded relatively flat since the start of the COVID-19 pandemic, leading to an extreme undervaluation that would be hard for most value investors to ignore.
There’s no guarantee that COVID-19 will be under control any time soon, nor a guarantee that the travel industry will recover in the near term. However, all signs point to these being the most probable outcomes, making United Airlines a stock that shouldn’t be overlooked.
9. Peloton Interactive (NASDAQ: PTON)
Peloton Interactive proved to be a big winner in the year 2020, gaining more than 400%. The gains have largely been attributed to the COVID-19 pandemic, and while the pandemic has helped the company grow, the management of the company can’t be discounted either.
Peloton Interactive sells home workout equipment and subscription services in the health and fitness market. This proved to be a great industry to be in during the COVID-19 pandemic.
As a result of the virus, gyms across the country and around the world closed their doors. After all, the last thing people needed to be doing was going to an enclosed area where others were working out and breathing heavy, ironically making gyms — places you go to be healthy — some of the most dangerous places on earth.
With gyms closing, consumers weren’t going to stop working out. After all, a healthy lifestyle leads to a long, fruitful life. So, consumers looked to other opportunities to exercise and stay active.
Knowing that consumers were looking for better ways to workout at home, Peloton mashed the gas pedal on its advertising efforts. Soon, no matter what you were watching, reading, or listening to, there was a strong chance that you would encounter an ad for Peloton.
Between the overwhelming demand from consumers who wanted to maintain a healthy lifestyle and the nearly perfect execution in displaying their offerings to these consumers, Peloton sales flew off the charts.
In the first fiscal quarter of 2021, Peloton saw revenues rise by 232% on a year-over-year basis, with subscriptions growing 137% year over year.
While some may argue that this kind of growth isn’t going to last throughout 2021, that conclusion may be in doubt. Sure, COVID-19 may be coming under control, but Peloton isn’t likely to dial back its advertising efforts, which is likely the larger reason the company saw such strong growth in sales in the first quarter of this year anyway.
As sales and profits continue to grow, there’s no reason to expect any slowing in the company’s profit growth, which likely plays a role in the fact that of 23 analysts rating the stock, 18 rate it a Buy, three rate it a Hold, and only two rate it a Sell.
It’s hard to argue against strong sales growth when it comes to investing opportunities. With the incredible performance of the company in 2020, and 2021 starting off along the same lines, Peloton Interactive has the potential to create stock market millionaires.
Avoid Playing the Short Squeezes
One of the hottest topics on Wall Street so far in 2021 has been the Big Short Squeeze, an event that saw retail investors take aim at hedge funds that profit from taking large short positions in stocks. By banding together and purchasing a massive number of shares in these stocks, retail investors on the WallStreetBets subreddit forced massive short squeezes, causing incredible losses for hedge funds and leading to just as significant profitability for many of the retail investors involved.
As a result, GameStop, Blackberry, and even a Canadian cannabis company known as Sundial Growers saw dramatic gains. As a result, many newcomers started to follow the WallStreetBets subreddit in hopes of tapping into these incredible gains.
Unfortunately, the short squeeze is a complex trade to play, and a large number of the newcomers to the stock market bought in at the wrong time, losing a massive amount of money on the downswing.
This has even led to a rush into Bitcoin after WallStreetBets posted about the electric vehicle maker Tesla accepting Bitcoin as a form of payment, becoming the first vehicle manufacturer to do so.
Following the herd may seem like an exciting concept, especially when it seems as though the herd is winning. But the reality is that by following the herd on these highly volatile moves, you’re opening the door to potentially significant losses, especially if you’re not an experienced stock trader.
Wise investment decisions, built on research and made for the long run, are the decisions that ultimately result in wealth for those who make them.
Whether you’re looking to invest in the stock market for the first time or you want to rebalance your portfolio to take advantage of the hottest trends on Wall Street, the stocks listed above are compelling opportunities to look into.
You’ll notice that each of the stocks on the list fall into the big tech and e-commerce, travel, clean energy, or workout equipment categories. These categories seem to be the home of the biggest opportunities on the market today.
Nonetheless, you should never blindly follow the opinions of any expert. Doing your own due diligence is the only tried-and-true way to make successful long-term investments.
Disclaimer: The author currently has no positions in any stock mentioned herein nor any intention to hold any positions within the next 72 hours. The views expressed are those of the author of the article and not necessarily those of other members of the Money Crashers team or Money Crashers as a whole. This article was written by Joshua Rodriguez, who shared his honest opinion of the companies mentioned. However, this article should not be viewed as a solicitation to purchase shares in any security and should only be used for entertainment and informational purposes. Investors should consult a financial advisor or do their own due diligence before making any investment decision.