10 Stocks to Buy for the Holiday Season

Author: Rachel Warren | November 23, 2020

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'Tis the season

With Thanksgiving almost upon us and Christmas just over a month away, you might be considering adding a few new stocks to your portfolio to close out 2020 with a bang. Even though investors have had a roller coaster of a year, there are still plenty of incredible stocks just ripe for the picking.

The 10 companies on this list hail from a variety of sectors and offer something for every type of investor, from the risk tolerant to the risk averse. Let’s take a closer look.

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We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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1. Apple

Popular FAANG stock Apple (NASDAQ: AAPL) has beaten all the odds this year amid tenuous market conditions. During fiscal 2020, Apple reported net sales increases across the majority of its segments, including iMac, iPad, wearables, and services. Although iPhone sales declined from fiscal 2019, Apple’s total net sales for fiscal 2020 grew by 6% from last year at $274.5 billion. With $38 billion in cash and cash equivalents on its balance sheet, Apple has plenty of liquidity to weather any near-term headwinds it may face in the current market.

ALSO READ: 3 Tech Stocks That Look Like Bargains Today

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2. Etsy

Online shopping has been more popular than ever this year. It’s no surprise that e-commerce platform Etsy (NASDAQ: ETSY) has consistently thrived throughout the pandemic, with shares of the company up 210% since January.

During the first nine months of 2020, Etsy reported a 101.1% increase in gross merchandise sales and a 102.1% increase in revenue compared with the same period in 2019. Etsy had over 3.7 million active sellers and around 70 million active buyers on its platform as of Sept. 30. By contrast, at the end of September 2019, the company reported just 2.6 million active sellers on its platform and 45 million active buyers.

Analysts seem to think that Etsy’s growth story is just getting started. They estimate that Etsy will boost its earnings by more than 57% per year over the next five years alone.

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3. Amazon

Amazon (NASDAQ: AMZN) was certainly a top stock before the pandemic and has remained so throughout 2020. The company has its finger on the pulse of all manner of industries, from entertainment to fashion and beauty to electronics. Amazon’s third-quarter net sales alone represented a 37% increase from the year-ago quarter. With Amazon’s recent launch of its very own online pharmacy, marking its latest disruption in another pivotal industry, the e-commerce behemoth continues to prove itself as one of those stocks you can buy and hold for a lifetime.

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4. Lowe’s

Between the first wave of lockdowns earlier in the year and the second rollout of closures now going into effect, consumers have found themselves with more time on their hands to start and finish home-improvement projects they might otherwise have put off. Retailers like Lowe’s (NYSE: LOW) are ideally positioned to cater to this surge in demand while reaping the obvious fiscal benefits that come with essential business status.

In the third quarter ending on Oct. 30, Lowe’s reported comparable sales in the U.S. up 30% year over year, while online sales grew 106% from the same quarter in 2019. The company was able to increase its cash position to a cool $8.2 billion by the end of Q3, whereas it had only $794 million in cash and cash equivalents during the year-ago period. Management expects the company to achieve up to 20% sales growth in the final quarter of 2020.

ALSO READ: 3 Pandemic Stocks That Could Make You Rich

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5. Facebook

Shares of Facebook (NASDAQ: FB) fell initially during the March crash, but they have more than recovered since that time. The stock is now up about 30% year to date.

The company has reported double-digit revenue growth in all three quarters of 2020, with its Q3 revenue alone growing 22% year over year. Facebook reported 2.7 billion monthly active users by the end of the third quarter and an average of 1.8 billion daily active users for the month of September, a 12% increase compared with the year-ago periods.

Although Facebook’s third-quarter user count dropped from the prior quarter, management anticipates that surges in ad revenue will continue to expand top-line growth in the final few months of the year.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

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6. Alphabet

An outpouring of advertiser spending and augmented Google Cloud revenue have consistently driven Alphabet’s (NASDAQ: GOOGL) (NASDAQ: GOOG) top-line numbers since the pandemic began.

In the third quarter, Alphabet’s revenue grew by 14% year over year. This was a significant improvement from the 2% revenue decline it experienced in the previous quarter, and it was also a sign that the company is rebounding from any short-term negative impact attributable to the pandemic.

Alphabet’s assets far outweigh its liabilities, which forms a reliable cushion against further volatility that may arise during the final quarter of the year and going into 2021. At the close of Q3, Alphabet reported total assets of $276 billion, while its total liabilities amounted to $74.5 billion.

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7. Lululemon Athletica

It’s no secret that apparel-focused retailers have frequently gotten the short end of the stick during the pandemic. lululemon athletica (NASDAQ: LULU) had a rough first quarter, during which revenue dropped 17% year over year.

However, the company’s balance sheet came back to life in the second quarter as its stores reopened. During that three-month period, Lululemon grew its revenue by 2% year over year while its direct-to-consumer net revenue surged 155%.

And despite the short-term impact from the pandemic, analysts project that Lululemon could achieve double-digit annual revenue increases over the next five years.

ALSO READ: 3 Stocks That Could Make You Rich

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8. Starbucks

Starbucks’ (NASDAQ: SBUX) fiscal year ended on Sept. 27. During that 12-month period, the company reported a 14% plunge in comparable-store sales and consolidated net revenue down 11.3%.

Although fewer transactions and temporary store closures due to the COVID-19 pandemic contributed to these losses, management seems confident that the company can make a sharp rebound in fiscal 2021. Not only does management project that Starbucks will grow its global comparable-store sales by as much as 23% in the new fiscal year, but it expects to open more than 2,000 new stores during that period.

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9. Spotify

Music-streaming giant Spotify (NYSE: SPOT) has been a popular choice this year for investors buying into the stay-at-home trend, but the stock was a winner long before the pandemic. Last year, the company grew its revenue by 29% from 2018.

Consumer demand for valuable listening content during the pandemic has further enabled Spotify to build on its recession-proof business model. As of the end of the third quarter, Spotify reported that it had 320 million monthly active users and 144 million subscribers on its platform. Comparing Spotify’s monthly active user and subscriber count with the year-ago period, these figures grew by 29% and 27%, respectively. The company also reported 14% year-over-year revenue growth in Q3.

Given that analysts estimate the company will grow its revenue by more than 140% every year in the coming five-year period, Spotify looks poised to offer plenty more upside to long-term investors.

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10. Zoom

Zoom Video Communications (NASDAQ: ZM) has been at the top of many investors’ buy lists this year. The company, which is up by nearly 525% year to date, has been one of the most prominent of the stay-at-home stocks. Zoom also reported triple-digit revenue growth in both the first and second quarters of fiscal 2021.

Zoom has proven its ability to meet the shifting demands of changing times. Even once a safe and effective coronavirus vaccine makes it to market, the new remote-working philosophy is likely here to stay. Companies like Zoom should continue to be a necessary fixture for consumers around the world. Although analysts don’t foresee Zoom continuing its unprecedented rate of growth indefinitely, they still think the company will increase its earnings by nearly 40% per year over the next five years.

5 Winning Stocks Under $49
We hear it over and over from investors, “I wish I had bought Amazon or Netflix when they were first recommended by the Motley Fool. I’d be sitting on a gold mine!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Previous

Next

Person with credit card and smartphone making online purchase at holidays

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Getting your investment portfolio ready for 2021

These 10 tried-and-true companies have managed to ride out the ups and downs of market headwinds due to the inherent strength of their businesses and continued consumer demand for their products and services. As we head into the new year, it’s more important than ever before to focus on buying recession-resistant companies that align with your personal investing goals and philosophy and that you are willing to hold for no less than three to five years.

By adhering to this simple but valuable investing mantra, you can prepare for the unpredictabilities of the market and rest confident in your investing decisions, regardless of what volatility the economy brings in the coming year.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Rachel Warren has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Etsy, Facebook, Spotify Technology, Starbucks, and Zoom Video Communications. The Motley Fool recommends Lowe's and Lululemon Athletica and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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