February was brutal, as modest gains through the first three weeks of the month were obliterated in the final week of trading. Most stocks are now a lot cheaper than they were a month ago, making this as good a time as any to put some money to work.
Market sentiment isn't bullish right now, but that only makes this an even better time to consider adding Roku (ROKU 1.58%), AT&T (T -1.37%), and Uber Technologies (UBER -0.07%) to your portfolio. Let's spell out the reasons these are among the top stocks to buy in March.
Image source: Uber Technologies.
Roku
One of last year's biggest gainers has had a 2020 to forget. The company behind the fast-growing streaming platform saw its stock more than quadruple last year, but the shares have retreated 15% through the first two months of this year.
The good news is that the stock surrendered under 5% of its value last week, less than half the carnage the general market suffered, as the market is starting to warm up to Roku again as an all-weather winner. If the economy keeps expanding, more people are going to make the jump to faster connectivity speeds and the growing number of streaming services available through Roku. On the other hand, if the economy stumbles -- or if coronavirus fears expand -- more folks will be staying home streaming video in the pursuit of escapism.
Roku has seen its active accounts climb 36% to 36.9 million over the past year. Engagement is off the charts, with the number of time spent streaming content through Roku soaring 60% in that time. Roku is now generating $23.14 a year in revenue per user -- less than $2 a month but still a rapidly expanding figure for an equally widening audience on a platform that's free for consumers. The stock closed out 2019 as the country's best-performing large cap, so as bad as last week was for most investments, Roku's ability to beat the market suggests that investors are rotating back into the stock.
AT&T
One of last year's more impressive turnaround stories hit a seven-month low on Friday. Activists pushed AT&T into promising a full review of its portfolio, holding off on big-ticket acquisitions, and expanding margins through enhanced operational efficiency late last year. The news has only gotten better in 2020, with a federal judge clearing the way for Sprint and T-Mobile, the country's third and fourth largest wireless carriers, to merge in a $26 billion deal.
One can look at the combination of two AT&T rivals as the creation of a more formidable competitor, but in the process it also eliminates a low-cost foe and should eventually improve pricing power for the remaining players. AT&T itself is a mixed bag. Its WarnerMedia acquisition gives it a strong content asset, and its flagship wireless business keeps growing. AT&T's old-school wireline business and its DIRECTV satellite television platform, meanwhile, are pulling back the other way.
An important point is that as AT&T's stock's been selling off as the yield is moving higher. AT&T has a head full of steam with its activist marching orders, and income investors are being treated to a 5.9% yield right now. But the deal is too good to last.
Uber Technologies
The world's leading ridesharing company is the only one of the three stocks on this list to be trading higher in 2020. Even after last week's sell-off, Uber shares enter March trading up 14% year to date. Revenue is accelerating, going from a 14% gain in the second quarter of last year up to 37% in its most recent financial update. Its namesake personal mobility business that accounts for 75% of its gross bookings and revenue is ridiculously profitable on an adjusted EBITDA basis.
Uber Eats, its faster-growing restaurant-delivery service, is losing a lot of money, but it's also an important part of the business model. As coronavirus fears escalate, one can argue that demand for restaurant-quality food without having to go out to an eatery is going to become even more popular. It's a competitive niche with heavy promotional activity, but Uber is a leader that will survive the inevitable shakeout. The stock can still be had for less than last year's IPO price, even as it's on more firm footing now.
Roku, AT&T, and Uber are some of the market's top stocks, and they are prime candidates to bounce back in March.
