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6 S&P 500 Must-Buy Stocks for 2021 Flying High Amid Pandemic
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After completing a record-breaking November, Wall Street continued its rally in the first week of December. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — gained 1%, 1.7% and 2.1%, respectively, last week. Moreover, these three indexes recorded all-time highs on Dec 4.
Wall Street has performed fairly well so far in 2020 after recovering impressively from the pandemic-led bear market and the momentum is likely to continue in 2021. At this stage, it will be prudent to invest in Zacks top-Ranked S&P 500 stocks that have skyrocketed year to date with strong potential for 2021.
Positive Catalysts for 2021
First, although the United States is suffering from the resurgence of coronavirus, at least three potential vaccine candidates for COVID-19 have been backed by impressive late-stage clinical trial data and are lined up for emergency authorization from the FDA.
On Dec 2, the U.K. government approved the first-ever coronavirus vaccine in the world, which was developed by Pfizer Inc. (PFE - Free Report) and BioNTech SE (BNTX - Free Report) . Nationwide deployment will start this week.
Second, the availability of a vaccine in the near future will be a game changer in 2021 as it will reopen the U.S. economy or at least a large part of it. Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level.
Consequently, the cyclical or reopening stocks will get a big push from market participants aside from the growth-oriented technology and communications stocks.
Third, strong pent-up demand is likely to drive the U.S. economy in 2021. Personal savings rate remains high in 2020 so far due to concerns over coronavirus-led economic uncertainties.
Consumers were restrained or restricted by the government to spend on those items that were closed during lockdowns. Reopening of the economy with the easing of the pandemic will significantly boost personal spending.
Fourth, U.S. stock markets have witnessed a broad-based northward movement so far in 2020. Year to date, the three large-cap centric indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 5.9%, 14.5% and 38.9%, respectively.
The small-cap specific Russell 2000 and the S&P 600 jumped 13.5% and 6.3%, respectively. The mid-cap centric S&P 400 climbed 8.8%. Moreover, all the six above-mentioned indexes recorded their fresh all-time highs on Dec 4.
Fifth, in its latest estimation on Dec 4, the Atlanta Fed projected that fourth-quarter 2020 GDP will increase 11.4% after increasing a record 33.1% in the third quarter. Projections for corporate earnings are also growing since last July.
At present, the consensus estimate is that the 2021 earrings of S&P 500 Index will increase 21.2% on 7.5% higher revenues after it was projected to decline 17.1% in earnings on 3.9% lower revenues in 2020.
Our Top Picks
We have narrowed down our search to six S&P 500 stocks that have popped more than 40% year to date. These stocks have strong growth potential and have witnessed solid earnings estimate revisions in the last 7 to 60 days for 2020. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price perforance of our six picks year to date.
L Brands Inc. operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. It operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.
The company has an expected earnings growth rate of 22.5% for next year (ending January 2022). The Zacks Consensus Estimate for its next-year earnings has improved 33.2% over the last 30 days. The stock price has jumped soared 111.1% year to date.
Deere & Co. (DE - Free Report) manufactures and distributes farm equipment worldwide. The company operates through three segments: Agriculture and Turf, Construction and Forestry, and Financial Services.
The company has an expected earnings growth rate of 45.4% for the current year (ending October 2021). The Zacks Consensus Estimate for its current-year earnings has improved 1.3% over the last 7 days. The stock price has rallied 46.2% year to date.
IPG Photonics Corp. (IPGP - Free Report) develops and manufactures a range of high-performance fiber lasers, fiber amplifiers and diode lasers used in various applications primarily in materials processing worldwide.
The company has an expected earnings growth rate of 60.1% for next year. The Zacks Consensus Estimate for its next-year earnings has improved 4.3% over the last 60 days. The stock price has jumped 46.3% year to date.
PerkinElmer Inc. provides products, services and solutions to the diagnostics, life sciences, and applied services markets worldwide. It operates in two segments, Discovery & Analytical Solutions and Diagnostics.
The company has an expected earnings growth rate of 9% for next year. The Zacks Consensus Estimate for its current-year earnings has improved 5% over the last 60 days. The stock price has climbed 46% year to date.
Qorvo Inc. (QRVO - Free Report) develops and commercializes technologies and products for wireless and wired connectivity worldwide. It operates in two segments, Mobile Products, and Infrastructure and Defense Products.
The company has an expected earnings growth rate of 36% for the current year (ending March 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the last 30 days. The stock has surged 42.3% year to date.
Hologic Inc. (HOLX - Free Report) develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment in the United States, Europe, the Asia-Pacific, and internationally. It operates through four segments: Diagnostics, Breast Health, GYN Surgical, and Skeletal Health.
The company has an expected earnings growth rate of 59.8% for the current year (ending September 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the last 30 days. The stock has advanced 40.1% year to date.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
Image: Bigstock
6 S&P 500 Must-Buy Stocks for 2021 Flying High Amid Pandemic
After completing a record-breaking November, Wall Street continued its rally in the first week of December. The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — gained 1%, 1.7% and 2.1%, respectively, last week. Moreover, these three indexes recorded all-time highs on Dec 4.
Wall Street has performed fairly well so far in 2020 after recovering impressively from the pandemic-led bear market and the momentum is likely to continue in 2021. At this stage, it will be prudent to invest in Zacks top-Ranked S&P 500 stocks that have skyrocketed year to date with strong potential for 2021.
Positive Catalysts for 2021
First, although the United States is suffering from the resurgence of coronavirus, at least three potential vaccine candidates for COVID-19 have been backed by impressive late-stage clinical trial data and are lined up for emergency authorization from the FDA.
On Dec 2, the U.K. government approved the first-ever coronavirus vaccine in the world, which was developed by Pfizer Inc. (PFE - Free Report) and BioNTech SE (BNTX - Free Report) . Nationwide deployment will start this week.
Second, the availability of a vaccine in the near future will be a game changer in 2021 as it will reopen the U.S. economy or at least a large part of it. Since the lockdowns imposed in March, the U.S. economy is operating at a significant sub-optimal level.
Consequently, the cyclical or reopening stocks will get a big push from market participants aside from the growth-oriented technology and communications stocks.
Third, strong pent-up demand is likely to drive the U.S. economy in 2021. Personal savings rate remains high in 2020 so far due to concerns over coronavirus-led economic uncertainties.
Consumers were restrained or restricted by the government to spend on those items that were closed during lockdowns. Reopening of the economy with the easing of the pandemic will significantly boost personal spending.
Fourth, U.S. stock markets have witnessed a broad-based northward movement so far in 2020. Year to date, the three large-cap centric indexes — the Dow, the S&P 500 and the Nasdaq Composite — rallied 5.9%, 14.5% and 38.9%, respectively.
The small-cap specific Russell 2000 and the S&P 600 jumped 13.5% and 6.3%, respectively. The mid-cap centric S&P 400 climbed 8.8%. Moreover, all the six above-mentioned indexes recorded their fresh all-time highs on Dec 4.
Fifth, in its latest estimation on Dec 4, the Atlanta Fed projected that fourth-quarter 2020 GDP will increase 11.4% after increasing a record 33.1% in the third quarter. Projections for corporate earnings are also growing since last July.
At present, the consensus estimate is that the 2021 earrings of S&P 500 Index will increase 21.2% on 7.5% higher revenues after it was projected to decline 17.1% in earnings on 3.9% lower revenues in 2020.
Our Top Picks
We have narrowed down our search to six S&P 500 stocks that have popped more than 40% year to date. These stocks have strong growth potential and have witnessed solid earnings estimate revisions in the last 7 to 60 days for 2020. All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price perforance of our six picks year to date.
L Brands Inc. operates as a specialty retailer of women's intimate and other apparel, personal care, and beauty and home fragrance products. It operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.
The company has an expected earnings growth rate of 22.5% for next year (ending January 2022). The Zacks Consensus Estimate for its next-year earnings has improved 33.2% over the last 30 days. The stock price has jumped soared 111.1% year to date.
Deere & Co. (DE - Free Report) manufactures and distributes farm equipment worldwide. The company operates through three segments: Agriculture and Turf, Construction and Forestry, and Financial Services.
The company has an expected earnings growth rate of 45.4% for the current year (ending October 2021). The Zacks Consensus Estimate for its current-year earnings has improved 1.3% over the last 7 days. The stock price has rallied 46.2% year to date.
IPG Photonics Corp. (IPGP - Free Report) develops and manufactures a range of high-performance fiber lasers, fiber amplifiers and diode lasers used in various applications primarily in materials processing worldwide.
The company has an expected earnings growth rate of 60.1% for next year. The Zacks Consensus Estimate for its next-year earnings has improved 4.3% over the last 60 days. The stock price has jumped 46.3% year to date.
PerkinElmer Inc. provides products, services and solutions to the diagnostics, life sciences, and applied services markets worldwide. It operates in two segments, Discovery & Analytical Solutions and Diagnostics.
The company has an expected earnings growth rate of 9% for next year. The Zacks Consensus Estimate for its current-year earnings has improved 5% over the last 60 days. The stock price has climbed 46% year to date.
Qorvo Inc. (QRVO - Free Report) develops and commercializes technologies and products for wireless and wired connectivity worldwide. It operates in two segments, Mobile Products, and Infrastructure and Defense Products.
The company has an expected earnings growth rate of 36% for the current year (ending March 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the last 30 days. The stock has surged 42.3% year to date.
Hologic Inc. (HOLX - Free Report) develops, manufactures, and supplies diagnostics products, medical imaging systems, and surgical products for women's health through early detection and treatment in the United States, Europe, the Asia-Pacific, and internationally. It operates through four segments: Diagnostics, Breast Health, GYN Surgical, and Skeletal Health.
The company has an expected earnings growth rate of 59.8% for the current year (ending September 2021). The Zacks Consensus Estimate for current-year earnings has improved 7.9% over the last 30 days. The stock has advanced 40.1% year to date.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>