Back to top

Image: Shutterstock

4 Promising Stocks That Are Transforming the Way We Function

Read MoreHide Full Article

The year 2020 has been full of disruptions, thanks to the coronavirus pandemic that has altered every aspect of people’s lives. From changing the way we work, eat, shop, travel, spend free time and interact with family and friends, every activity has witnessed a sea change. Lockdowns, shelter-in-place restrictions and social-distancing practices led to the emergence of the “new normal.”

The new normal has led to the adoption of new ways of life such as work from home, dine at home, shop from home, learn at home and many more. Hence, people have confined themselves to the four walls of their homes with increased dependence on technology.

Although the arrival of Pfizer’s COVID-19 vaccine has raised optimism, apprehensions regarding the deadly virus are far from gone. People are expected to follow social-distancing norms, wear masks and limit travel for the foreseeable future. As a result, companies are making efforts to figure out strategies that will stay relevant for the days ahead.

Given this scenario, we bring forth four promising stocks that are transforming people’s lives.

Let’s take a look.

One of the most obvious changes in consumer behavior has been the massive shift to the purchase of essentials items and that too via online. Consequently, retailers are leaving no stone unturned to capitalize on online demand by enhancing digital platforms and optimizing the supply chain. Companies are aggressively pursuing ways to improve omnichannel capabilities and delivery facilities, including curbside pickup, as people are still conscious about visiting stores. Target Corporation (TGT - Free Report) is one retailer, which is well equipped to serve customers through its curbside pickup or delivery-at-home facilities. The company is not only witnessing robust e-commerce sales trends but also benefiting from same-day services (Order Pick Up, Drive Up and Shipt) that surged 217% in third-quarter fiscal 2020. Sales fulfilled by Shipt were up nearly 280% year over year and sales through Drive-Up grew more than 500% during the said quarter. Order Pickup rose more than 50% in the quarter. Notably, the Zacks Consensus Estimate for the company’s fiscal 2021 earnings has moved 9.1% north over the past 60 days. This general merchandise retailer currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Secondly, the megatrend determining the future is none other than work from home. With companies advising people to work from home to maintain social distancing, internet providers, cloud computing and other technology facilitating free video-conferencing services are now basking in the spotlight. Dropbox, Inc. (DBX - Free Report) is one such platform that allows individuals, teams and organizations to collaborate through its website or application. This Zacks Rank #2 company’s strong focus on product innovation and introduction of solutions like an updated Dropbox Spaces, HelloSign, Passwords, Vault and Computer Backup is anticipated to expand its user base. Also, solid demand for cloud storage and the Virtual First initiative bode well. The Zacks Consensus Estimate for its 2021 earnings has been revised 9.9% upward over the past 60 days.

Another trend that is picking up of late is cook-at-home. More time spent at home and the fear of getting infected through delivery persons are the main reasons behind this trend. As a result, demand for fast moving consumer goods (FMCG), especially in the arena of snacks, instant coffee, biscuits and chocolates, witnessed striking growth. Of these, the emerging snacking habit that largely rose from staying at home all the time is likely to prevail. B&G Foods, Inc. (BGS - Free Report) is a manufacturer and marketer of shelf-stable and frozen foods. Some of the popular brands of the company are Green Giant, Back to Nature, McCann’s, Ortega, Victoria and Mama Mary, among many others. Additionally, B&G Foods is benefiting from higher online sales, backed by efficient delivery services of its retail customers. The Zacks Consensus Estimate for this Zacks Rank #2 stock’s 2021 earnings has moved 19.9% north in the past 60 days.

Education is no exception to the dynamic changes in people’s lives due to the pandemic. As millions of children are affected by the closure of schools worldwide, online education has become the need of the hour. This led the education industry to integrate technology, including the use of language apps, virtual tutoring, video conferencing tools and online learning software. One of the leading providers of career-oriented post-secondary education services to high school graduates and working adults, Lincoln Educational Services Corporation (LINC - Free Report) , has benefited from this trend. The Zacks Rank #2 company’s Lincoln Empowered suite offers more than 170 online core and elective PreK-12 courses. Evidently, its third-quarter 2020 revenues improved 8.5% year over year. The Zacks Consensus Estimate for its 2021 earnings has moved up 23.1% in the past 60 days.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>