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5 of the Best Growth Stocks to Buy as 2021 Trading Kicks Off

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The stock market took a severe beating last March as the coronavirus pandemic ravaged global economic growth and corporate profits. However, the stock market recouped losses as unparalleled stimulus measures by the government coupled with the Fed’s accommodative monetary policy buoyed investors’ sentiment, with many pouring in massive amount of money into equities.

Interestingly, the chaotic year of 2020 saw the longest bull run as well as the shortest bear market ever. Nonetheless, investors are looking past any new threats this year, including worries related to the speedy rollout of vaccines and high stakes involved in Georgia Senate run-offs. They instead expect the stupendous stock market run to continue this year.

But it’s also true that market participants have priced in positive developments on the vaccine front and its impact on global economic recovery. What’s more, they are concerned about the market’s stretched valuations. Still, they believe that several parts of the market, including the parts hit hard by the coronavirus outbreak such as leisure and hospitality, financial, and energy, will do exceedingly well this year on the vaccine breakthrough. In fact, many believe that vaccine distribution will be faster than expected, with a large chunk of Americans getting vaccinated in 2021.

It’s worth pointing out that cyclical stocks in the past couple of months have actually progressed leaps and bounds, which is undoubtedly a tell-tale sign of economic recovery. Having said that, high-flyers like tech stocks are expected to do well as stay and work-from-home trends are likely to continue well into 2021.

Expectations of increased corporate earnings this year are now growing. Moreover, the new administration over the course of 2021 is likely to introduce pretty large stimulus packages to pep up the economy. Top Wall Street firms, thus, are now raising their price targets for the broader S&P 500. For instance, as quoted in a Forbes article, Goldman Sachs expects the S&P 500 to touch 4,300 points by the end of this year, while Morgan Stanley, Wells Fargo and LPL Financial have set their end of this year price targets for the index to 3,900.

5 Top-Ranked Growth Stocks to Buy Now

Given the aforesaid positives, the stock market is set to scale northward this year. Also, traditionally the month of January in particular has been a good month for stocks. As mentioned in a MarketWatch article, since 1954, the S&P 500’s average price-only return came in at 1.05% in January, slightly more than the 0.67% return on average over the rest of the 11 months. Hence, now is the time for investors to invest in fundamentally-sound stocks poised to grow in the near future.

Thanks to our style score system, we have been able to identify five growth stocks. Our research shows that stocks with a Growth Score of A or B when combined a Zacks Rank #1 (Strong Buy) or 2 (Buy) offer the best opportunities in the growth investing space.

The Blackstone Group Inc (BX - Free Report) is an asset manager of alternative investments and a provider of financial advisory services. The company currently has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has moved up 2.1% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 97.8%.

Malibu Boats, Inc. (MBUU - Free Report) operates as a designer, manufacturer and marketer of sport boats primarily in the United States. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has risen 8.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 46.8%.

LaZBoy Incorporated (LZB - Free Report) is one of the world's leading residential furniture producers. The company currently has a Zacks Rank #2 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has climbed 27.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 26.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alphabet Inc. (GOOGL - Free Report) is one of the most innovative companies in the modern technological age. Over the last few years, the company has evolved from primarily being a search-engine provider to cloud computing, ad-based video and music streaming, autonomous vehicles, healthcare providers and others. The company currently has a Zacks Rank #2 and a Growth Score of B. The Zacks Consensus Estimate for its current-year earnings has risen 0.6% over the past 60 days. The company’s expected earnings growth rate for the current quarter is 58.5%.

Beacon Roofing Supply, Inc. (BECN - Free Report) is the largest distributor of residential and non-residential roofing materials in the United States. The company currently has a Zacks Rank #1 and a Growth Score of A. The Zacks Consensus Estimate for its current-year earnings has moved 23.2% up over the past 60 days. The company’s expected earnings growth rate for the current year is 22.7%.

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 >>