In just a few days, we'll be putting 2020 firmly in the rearview mirror. That's a proposition most Americans can fully get behind.
But for investors, seeing 2020 come to a close might bring mixed emotions. Despite losing over a third of its value during the first quarter, the broad-based S&P 500 looks to end the year higher by a double-digit percentage. That's actually above its historic annual return rate, which is pretty impressive given all that's transpired in 2020.
However, crossing the proverbial finish line for 2020 doesn't mean investors can't generate sizable gains in the year that lies ahead. If you have $1,000 at your disposal, which won't be needed to pay bills or cover emergencies, buying the following three stocks could allow you to start 2021 with a bang.
Though tech stocks have been on fire in 2020, there are a number of tech names that offer bountiful upside in 2021 and beyond. Near the top of that list is customer relationship management (CRM) solutions provider salesforce.com (CRM 0.41%).
As the name implies, CRM software helps businesses maintain customer info, identify prospective sales opportunities, log service issues, and manage marketing campaigns across a single cloud-based platform. The retail industry is a logical beneficiary of CRM software, but it's certainly not the only sector or industry benefiting from these solutions. The entire service industry, healthcare, information technology, distribution, and finance companies can all improve their sales by employing the CRM solutions offered by salesforce.
Beyond just having a broad audience with which to offer its solutions, salesforce is the uncontested kingpin of CRM. Research and advisory firm Gartner estimates that salesforce controlled a whopping 18.3% of the global CRM market by the end of 2019. By comparison, SAP, Oracle, and Adobe Systems, the respective No.'s 2, 3, and 4 in global CRM market share, combined for 19.1%. CRM is a consistent double-digit growth opportunity, and salesforce.com is the unquestioned go-to for businesses.
Additionally, don't overlook the company's recently announced acquisition of Slack Technologies for $27.7 billion in cash and stock. The biggest deal in salesforce's history will allow the company to cross-market its CRM solutions to Slack's rapidly growing enterprise user base, which is a tactic that rival Microsoft has used with its Teams platform.
Expect salesforce to have another excellent year in 2021.
Marijuana stocks should also be a hot commodity in the new year, with pot stocks in the U.S. having the most substance behind their valuations. Though I don't believe federal legalization will happen next year, I do see state-level legalizations and organic growth within already legal states driving big-time growth for vertically integrated multistate operator Cresco Labs (CRLBF 6.70%).
One way Cresco is expected to move the needle in 2021 is with its retail operations. Although Cresco doesn't hold dozens of dispensary licenses like some of its peers, it does have 19 operational locations, roughly half of which are located in Illinois. The Land of Lincoln is a limited license state, which means it's only going to dole out a fixed number of retail licenses. Thus, Cresco's ability to open 10 locations in Illinois (at least initially) should allow it to gobble up meaningful share in a market that can exceed $1 billion in annual weed sales by 2024.
An even more exciting growth opportunity for Cresco Labs comes from its wholesale business. In early January, it closed on its all-stock acquisition of Origin House. The key to this deal is that Origin House held one of California's highly coveted cannabis distribution licenses. With this license now in hand, Cresco can place pot products into more than 575 dispensaries throughout the Golden State -- i.e., the largest cannabis market in the world, by annual sales.
Cresco Labs should be one of the fastest growing marijuana stocks in 2021, and will likely turn the corner to recurring profitability before the year is over.
On a macro basis, the outlook for gold has just about never been most lustrous. A record amount of global investment-grade debt is sporting a negative yield, and the U.S. Federal Reserve has been clear about keeping lending rates at or near historic lows. When coupled with ongoing quantitative easing measures (i.e., $120 billion in monthly bond-buying activity) and more fiscal stimulus, the table is set for the price of gold to soar.
As for SSR Mining, it'll benefit from higher precious metal prices, and much more. For instance, it recently completed a merger of equals with Turkey's Alacer Gold. The combined entity has four producing assets that are fully capable of up to 760,000 ounces of combined gold equivalent output each year. Improved yield at Copler, Seabee, and Marigold will be key to hitting this lofty goal.
What's more, SSR ended the third quarter with almost $220 million in net cash. Most mining companies are still trying to dig their way out of debt from a rampant spending spree in the early 2010s. SSR Mining's management team has always taken a more cautious spending approach. With $450 million in annual free cash flow expected in 2021 and 2022, the company is initiating a $0.05 quarterly dividend in Q1 2021, and may use additional capital for share repurchases.
At just over a multiple of 5 times Wall Street's projected cash flow per share in 2021, SSR Mining might be the most attractive gold stock in the entire industry.