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5 Stocks You'll Want to Own in 2021

By Jennifer Saibil - Mar 13, 2021 at 6:55AM

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These companies all have incredible potential for the coming year and beyond.

We're well past 2020 at this point, and the world is hoping for a better 2021. The stock market ended the year with gains despite a global economic disaster, but many top stock prices are falling in 2021. Amazon (AMZN 0.25%) is down 4%, Square (SQ -4.25%) is down 8%, and Apple (AAPL 0.17%) is down more than 7%.

Now to the good news. These five stocks should reward you amply if you hold onto to them in 2021.

1. Walt Disney

Walt Disney's (DIS -0.70%) sales have been routed over the past year as parks and experiences closed down. Open now at limited capacity, they're still showing lackluster performance with sales in this segment declining a massive 53% in the first fiscal quarter ended Jan. 2, bringing down overall company sales 22% from the year-ago quarter. 

So why did the stock gain 67% over the past year? The answer is Disney+.

Mickey Mouse in from of the Magic Kingdom.

Image source: Walt Disney.

OK, it's a bit more than that. All of Disney's streaming sites were driven by pandemic lockdowns, and direct-to-consumer increased 73% in the first quarter off of a 250% year-over-year increase in Disney+ subscriptions, an 80% increase in ESPN+ subscriptions, and a 30% increase in Hulu subscriptions.

Investors are also getting ready for a travel rebound, and Disney is one of the companies that should benefit most when that happens.

I can't say that you can get Disney at a discount while sales are lower, but you can definitely expect a rising share price from the entertainment king. 

2. Fiverr International

The working world as we know it is changed forever as a result of the coronavirus pandemic. With the rise of companies facilitating the work-from-home environment such as Zoom Video Communications and Fiverr International (FVRR -1.84%), employers and workers alike realize that you can accomplish much of the same work from your home office as in the corporate office.

Fiverr is a leading freelancer website that benefited from the shift to the digital workforce over the past year. Sales grew 89% in the fourth quarter to close out a fabulous 2020, and the company is expecting a similar increase in the first quarter of 2021.

It also has lots of plans in place for the future. It expanded into 30 new categories in the fourth quarter for a total of more than 500, and it announced an acquisition of creative freelance platform Working Not Working to expand its services.

It sees a $115 billion total addressable market, and it's well positioned to keep up the growth in 2021 and beyond. Fiverr stock gained 581% over the past year and is up 11% so far in 2021, and investors can expect a lot more for the rest of the year.

A woman working from home having a video meeting.

Image source: Getty Images.

3. Roku

Streaming adoption ramped up during the pandemic, and Roku (ROKU -2.76%) makes sales from both sides. That is, it sells streaming devices, and also gets paid by advertisers for its free streaming channels.

Roku has the top spot in U.S. device sales, with 38% if the market in 2020, competing against companies like Amazon.  Player sales increased 18% in the fourth quarter, but platform revenue, which is ad sales and accounts for three-quarters of the total, increased 81% for a 58% increase in company sales. Advertisers are leaving traditional TV networks and migrating to newer platforms such as Roku, and several agencies doubled their deals with Roku and committed to future contracts.

Roku also added 14 million new active accounts, a 39% year-over-year increase, and average revenue per user increased 24%. It posted surprise profits in the third and fourth quarter of 2020,and it's expecting further growth in Q1 of 2021 and beyond.

Roku stock gained 358% over the last twelve months and is up 13% so far this year.

4. Target

Target (TGT 1.26%) outdid all of its in-store competition during the pandemic, posting more than 20% comps for the past three quarters. 

Target was a mess in 2016 before it got a new CEO and a new direction, and it was a huge turnaround story, as its investments in e-commerce and omni-shopping options fueled sales over the past four years and meant that it was prepared for lockdowns.

The company acquired same-say shipping company Shipt in 2017, and same-day services, which also include pick-up and drive-up, increased 212% in the fourth quarter ended Jan. 30, 2020. Drive-up grew more than 500%, and Target also ships 95% of digital orders from stores, instead of distribution centers, which is more cost-effective for the company and results in faster shipping. The company said it was investing in store renovations and more small-store models to support growth in these areas.

Target stock has gained 94% over the past year and is about flat year to date.

Peloton bike+ user with an instructor on screen.

Image source: Peloton Interactive.

5. Peloton

Peloton Interactive (PTON -1.49%) was also a pandemic winner as fitness enthusiasts turned to home-gym options.

The second quarter capped off a year of outstanding growth, with a 128% revenue increase, a 134% increase in connected fitness subscriptions, and a 472% increase in paid digital subscriptions.

The company has demonstrated that it's more than a one-bike business over the past year. It released new models, acquired another company, announced a partnership with Beyonce, and recently said it will launch in Australia later this year.

Peloton stock gained 400% over the past year, but it's down 24% so far in 2021. That makes it an excellent time to buy in on a dip.

 

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$102.42 (-0.70%) $0.72
Target Corporation Stock Quote
Target Corporation
TGT
$155.36 (1.26%) $1.93
Apple Inc. Stock Quote
Apple Inc.
AAPL
$137.59 (0.17%) $0.24
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$2,151.82 (0.25%) $5.44
Block, Inc. Stock Quote
Block, Inc.
SQ
$83.44 (-4.25%) $-3.70
Roku Stock Quote
Roku
ROKU
$94.20 (-2.76%) $-2.67
Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$89.74 (-1.32%) $-1.20
Fiverr International Ltd. Stock Quote
Fiverr International Ltd.
FVRR
$38.93 (-1.84%) $0.73
Peloton Interactive, Inc. Stock Quote
Peloton Interactive, Inc.
PTON
$14.51 (-1.49%) $0.22

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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