Another round of stimulus checks is on its way. If your bills are paid and you have a strong emergency fund, it could be a great opportunity to invest that money in stocks that are due for big performances in 2021. As long as you're comfortable taking on some risk with your $600 stimulus check, there are some attractive buying opportunities out there that could potentially double your money.
Three stocks that are particularly appealing today are Moderna (MRNA 3.01%), AMC Entertainment (AMC 8.23%), and Stride (LRN 2.78%). They've all fell in the past month, but that doesn't mean the trend will continue into next year. Here's why these stocks could be strong buys in 2021.
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1. Moderna
Moderna is coming off a terrific 2020. Its share price skyrocketed more than 470% thanks to its COVID-19 vaccine, mRNA-1273. On Dec. 18, the U.S. Food and Drug Administration (FDA) granted the drug Emergency Use Authorization (EUA). The U.S. government has already ordered 200 million doses and can purchase 300 million more under its current arrangement with the company. Moderna also has a supply deal with the European Commission for up to 160 million doses, and Japan for another 50 million, in addition to deals with other countries.
mRNA-1273 is the company's first major product to hit the market -- and it's a huge first opportunity. The COVID-19 vaccine market could be worth $100 billion, and because Moderna and Pfizer are the only companies with authorized vaccines right now, they are in a great position to establish footholds. Big names like AstraZeneca and Johnson & Johnson could also take sizable pieces of the pie, but for a company like Moderna, whose main source of revenue up to this point has come from federal funding for its vaccine development, its top line will likely get a huge boost next year. In July, an analyst from Jefferies estimated that Moderna could bring in more than $5 billion in revenue annually from the sale of its vaccine. And with other drugs in its pipeline (including a vaccine for Zika and cytomegalovirus) and its mRNA approach proving to be successful, there could be even more growth ahead for the company in the near future.
Shares of Moderna have fallen 12% in the past month (while the S&P 500 has climbed 2%). Now could be a great opportunity to buy this healthcare stock on the dip.
2. AMC
AMC is a risky stock to invest in, but the good news is that vaccines from Moderna, Pfizer, and other companies could help in its turnaround. 2020 was a tough year for the movie theater business as the coronavirus pandemic kept people home. That wreaked havoc on AMC's financials.
In the nine-month period ending Sept. 30, the company reported revenue of $1.1 billion -- a mammoth 73% decline from the more than $4 billion in sales AMC brought in a year ago. With more than 1,000 theaters and over 11,000 screens, the company desperately needs the foot traffic to bounce back.
But now that there is a possible end of the pandemic in sight, there's some optimism that things could turn around for AMC as early as 2021. As concerns start to subside regarding COVID-19, that will inevitably loosen restrictions across the country and bring moviegoers back. At the very least, things shouldn't be nearly as bad for AMC as they've been since the pandemic began.
With shares of AMC trading at around $2, it won't take much for this stock to double your money if things go well in the new year. At the start of 2020, the stock was comfortably sitting above the $7 mark. While there's definitely some risk here, there's also plenty of upside for the stock should the economy rebound in 2021.
3. Stride
Education company Stride, previously known as K12, is a bit of a safer bet than AMC is. It can even be an alternative buy for investors who may be a bit more certain that COVID-19 will stick around in 2021.
Stride benefited from people staying at home during 2020. Enrollment in its online and blended learning programs soared. On Oct. 26, it released its quarterly earnings numbers for the period ending Sept. 30, and sales of $371 million were up 44.3% year over year. The company's bread and butter is its general education segment, which is geared for kindergarten through high school-aged students. It grew at a rate of 34.4% with revenue rising to $313.8 million during the period. But its career learning division had an even more exceptional quarter, rising 142.5% to $57.1 million in sales.
Online learning could continue to rise in 2021 if COVID-19 is enough of a concern for parents to keep their kids at home. But even if that isn't the case, there's potential in Stride's career learning segment, which focuses on developing skills for in-demand industries. With many businesses shutting their doors due to COVID-19 (and some jobs gone for good), people are going to need to upgrade or learn new skills -- and Stride can play a big role in that.
Stride's stock has only risen 5% this year despite more students learning online in 2020. Investors may be concerned that its sales are mainly due to the pandemic and they won't be sustainable once it's over. And while there's no denying Stride benefited from people staying at home, the pandemic also helped put its business on the radar as a viable learning option moving forward. Whether it's through its career learning division or just more people opting for online learning than in the past, investors shouldn't discount the growth opportunities for Stride. According to a report from research company Facts and Factors, the market for e-learning could reach $374.3 billion by 2026, growing at a compounded annual growth rate (CAGR) of 14.6%.
This could be an underrated growth stock to buy that could double your money -- it just may take a little longer than the other two stocks on this list.
