Even in the face of a global pandemic, the stock market outperformed historic averages, with the S&P 500 gaining more than 16%. In a year that was largely bifurcated, many stocks did much worse, while some did far better. The coming year looks like more of the same, as winners will likely keep winning while the struggles of others will surely continue.
On this clip from Motley Fool Live, recorded on Jan 29, "The Wrap" host Jason Hall and Fool.com contributors Danny Vena and Brian Withers lay out the case for three stocks that could make investors richer in 2021.
Jason Hall: What stock that you follow closely will be the best performer in 2021?
Danny Vena: I'm glad this is pointless prognostication [laughs] because I am fairly sure I'm going to get it wrong. That said, I've got three of them in mind and I'm torn, if I'm honest. Everybody knows how I feel about MercadoLibre (NASDAQ: MELI) and I also just called Nvidia (NVDA -4.40%) and Roku (ROKU -13.74%) my two highest conviction stocks for 2021. That said, I'm going to go with Roku for this pointless prognostication.
I think Roku is only just getting to the tipping point. I think they have gotten to the point with more than 51 million subscribers and now, they have a little bit of power when it comes to the ad-tech business. They are going to these streaming companies from a position of strength saying, "Okay, if you want to stream on our platform, that's great. We've got 51 million subscribers here. We want you to give us X," and whether that turns out to be cash or a percentage of the ad revenue or like they did with some of their streaming partners, "Give us some of your content that we can slap on The Roku Channel and we get all that advertising from that." I think that the fact that they just tipped into profitability last quarter, that they are over 51 million in subscribers. I think that this is a catalyst year for Roku and I think they could be among the best performers in my portfolio.
Jason Hall: Brian Withers, what you've got for us?
Brian Withers: Yeah, I thought you were going to ask a different question. [laughs]
Jason Hall: I changed things up.
Brian Withers: You did. I cheated and looked at the sheet and I got busted. I'm going to go with nCino (NCNO). Not many people might have heard of this one. This is similar to Shopify (NYSE: SHOP) [which] is the back-office for e-commerce. Individuals and companies that want to run an e-commerce store. Veeva (VEEV -3.09%) is the operations for life sciences companies. nCino is the back-office operations for banks in the cloud and they do a great job in providing a platform built on salesforce.com (NYSE: CRM).
Built on a solid cloud platform has been around for a long time that's highly configurable and fairly easy to ramp up to allow banks to get off a paper. You would be surprised at how many banks, large and small, that still operate in a environment where they're having to print stuff out and sign stuff and shuffle folders around. Going to get a loan, geez, the amount of paperwork that you have to sign to do that. There's no reason in what are we 2021, there's no reason to have to do that and then nCino has a well established platform built by bankers for bankers.
Jason Hall: Brian, if you could be sure, put that ticker over in the chat for folks.
Brian Withers: Yes I will.
Jason Hall: Again as the guy that owns all the stock, like a 130 different stocks around, and I'm a generalist. I follow a lot of industries. I follow a lot of stocks that are in The Motley Fool universe relatively closely. It's really hard for me just to pick one. But I think instead of saying this is the stock, I think that's going to have the best year. This is a stock that I think is going to have a great year and that's NV5 Global (NVEE 1.30%), the ticker's N-V-E-E.
NV5 Global is only on a couple of the Foolish services and it's still a pretty small company, it's an engineering firm mainly, but they also do some geospatial stuff. They made a large investment to acquire a big geospatial services company. But across the infrastructure industry and their engineering industry, they have their hands on a lot of different verticals. They do a lot of different things.
The founder and CEO, Dickinson Wright, he's got a long track record of being really really good at building successful engineering firms. Growth by acquisition's hard to do. But they have a really good process where they add small firms, regional firms to their mix. Then they ring out a lot of like the back-office costs and that kind of stuff to take advantage of their scale. That's why a lot of companies don't do acquisition well, they end up bloated.
But the other thing that they do is they add to existing verticals in areas they don't have geographic reach. They add other verticals that makes sense in ways that allow them to do things like cross-selling. All of a sudden their organic sales grow because somebody hires an engineer to do a project, a certain part of that project. In the past, that engineer, they could only do that part because they were a small mom-and-pop firm and they only did whatever engineering they do. But now they need to have maybe they want to bring somebody in the project management. Guess what? NV5 could do that. It's just really interesting combination of engineering project managements and again, the geospatial. They've just done such a great job of continuing to grow. I can't think of a better time to be in the infrastructure business right now. It's one of my favorite stocks owned for the next 20 years. Again, NVEE, NV5 Global.