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These 2 Stock Market Plays Are Moving Up the Charts in 2021

By Dan Caplinger - Updated Apr 7, 2021 at 9:12PM

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Could these areas see more gains ahead?

The stock market was narrowly mixed on Wednesday but generally remained close to record levels. Mixed economic news created some volatility, but moves were relatively modest. The S&P 500 and Dow Jones Industrial Average are both within 1% of their highs, while the Nasdaq Composite has pulled back a bit further but is still sharply higher over the past year.

Index

Percentage Change

Point Change

Dow Jones Industrial Average (^DJI 0.06%)

0.05%

16

S&P 500 (^GSPC 0.23%)

0.15%

6

Nasdaq Composite (^IXIC 0.00%)

(0.07%)

(10)

Data source: Yahoo! Finance.

Investors looking for successful plays in 2021 have had to be a bit choosier than they were in 2020. Yet while big gainers aren't as plentiful as they were in 2020, there are still a couple of areas that feature some huge winners. Below, we'll look at two industries that have powered ahead this year and have plenty of momentum for further gains throughout 2021 and beyond.

1. Marijuana stocks

Marijuana has been a popular investing area for several years, but it got a big shot in the arm recently with the 2020 U.S. elections. A change in political party control of both the White House and the Senate has created a much more receptive environment for considering marijuana reform, including decriminalizing pot at the federal level. That's helped lift shares of the entire industry, with the ETFMG Alternative Harvest ETF (MJ -2.96%) seeing gains of more than 50% so far in 2021.

Jar of dried cannabis next to seeds and rolling papers on a wood table.

Image source: Getty Images.

Industry consolidation and other strategic moves have lifted some individual stocks even further. For instance, both Tilray (TLRY) and Aphria (APHA) have more than doubled since the beginning of the year, as they prepare to move forward with a merger that would create the largest cannabis company by revenue in the industry. Similarly, cannabinoid drug specialist GW Pharmaceuticals (GWPH) is up almost 90% year to date after getting a buyout bid from industry peer Jazz Pharmaceuticals (JAZZ -0.67%), and OrganiGram Holdings (OGI -3.51%) has climbed nearly 150% on news of a massive investment from tobacco giant British American Tobacco (BTI -0.39%).

A lot now rides on whether marijuana actually gets fully legalized in the U.S. market. Yet with fundamentals in the business improving, there could be considerable upside for marijuana stocks in the months to come.

2. Shipping stocks

In contrast to marijuana stocks, most investors don't pay much attention to the companies that ensure goods get to where they're going. The global economy relies on getting products to market, however. So whether you're looking at crude oil and other energy products that move by tanker ship or dry bulk goods that cargo ships carry, the companies that handle shipping play a vital role for the global economy.

The recent blockage of the Suez Canal only highlighted the importance of shipping worldwide. That's ignited interest in some stocks that rely on high shipping rates, as the industry is seeing a favorable environment for pricing.

As a result, big shipping stocks have posted sizable gains. Star Bulk Carriers (SBLK -0.35%) is up 67% so far this year, while Safe Bulkers has risen 82%. Navios Maritime Holdings has left its peers in the dust, posting gains of more than 350%.

On the tanker side of the business, returns have been more subdued but are still impressive. Frontline (FRO -1.72%) has risen 23% year to date, while Nordic American Tankers (NAT 2.15%) gained 17% and Teekay Tankers (TNK -1.41%) has seen a 31% jump.

As the global economy recovers, shipping demand will likely increase. That could help support shipping rates that would in turn boost profits for these companies, potentially continuing the upswing in stock prices.

Investors have plenty of choices of where to put their money. Right now, though, the interest in shipping and marijuana stocks seems justified, and it'll be interesting to see just how far these groups of companies can climb.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends OrganiGram Holdings. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Tilray Stock Quote
Tilray
TLRY
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
^DJI
$33,999.04 (0.06%) $18.72
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,283.74 (0.23%) $9.70
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
^IXIC
$12,938.12 (0.00%) $0.00
Nordic American Tankers Limited Stock Quote
Nordic American Tankers Limited
NAT
$2.85 (2.15%) $0.06
Frontline Ltd. Stock Quote
Frontline Ltd.
FRO
$12.01 (-1.72%) $0.21
Teekay Tankers Ltd. Stock Quote
Teekay Tankers Ltd.
TNK
$25.23 (-1.41%) $0.36
British American Tobacco p.l.c. Stock Quote
British American Tobacco p.l.c.
BTI
$41.16 (-0.39%) $0.16
Star Bulk Carriers Corp. Stock Quote
Star Bulk Carriers Corp.
SBLK
$25.76 (-0.35%) $0.09
Jazz Pharmaceuticals plc Stock Quote
Jazz Pharmaceuticals plc
JAZZ
$156.55 (-0.67%) $-1.05
GW Pharmaceuticals plc Stock Quote
GW Pharmaceuticals plc
GWPH
OrganiGram Holdings Stock Quote
OrganiGram Holdings
OGI
$1.10 (-3.51%) $0.04
ETF Managers Trust - ETFMG Alternative Harvest ETF Stock Quote
ETF Managers Trust - ETFMG Alternative Harvest ETF
MJ
$6.22 (-2.96%) $0.19
Aphria Stock Quote
Aphria
APHA

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

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