Great Stuff Picks: The ‘2021 Road to Recovery’ Edition
All right, all right, all right already! I’ve teased you enough.
You can quit asking, “What are Mr. Great Stuff’s top picks for 2021? Predictions, please!”
Seriously, it’s like I’m hoarding vaccines and New Year’s dreams over here, not stock picks. And no, you won’t find any “Tesla is the next AOL!” kind of predictions today.
But I get the hype — I mean, last year’s picks in “4 Stocks to Buy Before the Ball Drops” returned a cumulative gain of more than 220% in a year. And not one of them is a loser! Eat your heart out, Wall Street talking heads.
Last year’s theme was tech mega trends, and 2020 was certainly the year of tech mega trends. (Just ask my colleague Paul . Better yet, click here to see what tech he’s looking at now!)
Anywho, we’re mixing it up this year … and for good reason!
As Great Ones know, I’m worried about a reckoning in the stock market. Valuations are through the roof — especially among tech stocks and anything attached to an IPO or SPAC.
None of these valuations are sustainable, and that’s my concern. I’m not saying overvalued stocks like Tesla, Airbnb or SunPower will come crashing down anytime soon … but growth in 2021 may be a bit harder to come by.
So, to find our portfolio patch of green, grassy growth in 2021, Great Stuff took a bit of a contrarian tack. You say contrarian; I say realistic. Potato, potahto.
This year’s theme — as you can see from the headline — is recovery.
There’s a light at the end of the pandemic tunnel. The vaccine is rolling out and, with any luck, we’ll all finally emerge from our COVID-19 cocoons just itching to be literally anywhere other than where we spent the last 10 months. After all, we’re closing in on “Here’s Johnny!” at this point.
It’s (almost) time for fresh air and travel. Time to put the rubber to the road and burn gasoline. Time to jet around the globe once again and visit the happiest places on earth — hint hint.
Ready to spread your wings and fly? Get ready for takeoff!
You’ve heard from the rest, now get ready for the best. That’s right: It’s time for Great Stuff Picks’ best stocks to own for 2021!
No. 3: Big Ol’ Jet Airliner…
Please carry me too far away. I’m sorry, Steve Miller Band, but here is the last place I’ve got to stay.
And who better to carry you and your portfolio far away than Boeing (NYSE: BA)? Yes, Boeing.
The airline industry sits poised for a rebound in 2021. Now, you could risk it and bet on Delta or American, but airlines will soon pump out steep discounts left and right to get people to fly again. That eats into earnings, which isn’t good for us as investors.
Furthermore, airlines will need to retool and repair grounded planes and order shiny new aircraft. That’s where Boeing comes in — the company is ready to sparkle in 2021!
After being grounded for 20 months, the 737 MAX resumed flights this week. The stigma around Boeing’s 737 MAX is waning. The company is still conservative on sales projections due to COVID-19, but orders for the profitable plane are sure to resume in short order.
Meanwhile, despite fears of decreased U.S. defense spending, the latest National Defense Authorization Act calls for $740.5 billion in 2021 — a nearly 3% year-over-year bump. Boeing will certainly see a fair amount of that cash head its way.
Overall, analysts expect the company to see revenue jump 33% in 2021 and a massive earnings increase to $4.24 per share. Then again, after it lost $9.47 per share in 2020, any increase would be massive.
The bottom line is that Boeing is a perennial name in the airline and aerospace industries. It’s not going anywhere. Period. BA shares were beaten down too much this year, and they’re priming for a comeback in 2021.
As such, Great Stuff Picks says buy BA.
No. 2: Don’t Call It a Comeback!
Mark my words: 2021 is when Intel (Nasdaq: INTC) will rise from the ashes, like a bold, computer chip-wielding phoenix.
Though, Intel isn’t really on fire. Nor did it burn itself to the ground. I mean, it brought in some $71.9 billion in sales this year. It beat or matched Wall Street’s earnings estimates in the past four quarters. It saw revenue grow nearly 5% despite production problems and a pandemic — that’s no small potato chips.
Finally, Intel is still the most dominant semiconductor maker in the U.S. — sorry AMD, it’s the truth. The company won’t just lie down and let some upstart chip company run all over it.
Furthermore, hedge funds are involved now. Activist fund Third Point just announced a $1 billion INTC stake and demanded Intel spin off its too-meager manufacturing arm.
Remember: Intel isn’t struggling because it’s not innovative. It has the technology. It has the know-how. What it needs is better manufacturing. If that means a factory spinoff and outsourcing, so be it.
We’ll know more after the company’s investor day event in January, and my bet’s on big changes after the event.
Look for Intel to seriously consider Third Point’s concerns. Heck, we may even see CEO Bob Swan pushed toward the exit. One can hope… He certainly hasn’t stopped AMD’s Lisa Su from eating his lunch.
Any of these developments could light a fire under this blue-chip semiconductor company and help speed Intel’s return to its former glory.
The turnaround is coming, which is why Great Stuff recommends you buy INTC.
No. 1: The Happiest Investment on Earth
If you didn’t see this coming, you haven’t kept up with your Great Stuff. The shame!
Walt Disney (NYSE: DIS) is my pick for 2021’s hottest investment. Why? Because Disney+ will be bigger than Netflix.
The Mouse’s House may be late to the streaming game, but boy, does it have content.
Some 100 new shows and movies are on the way, with 80% of those heading straight to Disney+. New Star Wars series and movies. New Marvel series and movies. New Pixar movies. New! New! New!
There’s so much new content coming to Disney+ that analysts didn’t even bat an eye when the company said it’d hike subscription prices by $1 per month. By contrast, every time Netflix even hints at a price hike, the Wall Street talking heads lose their $#!%, and the stock falls.
Even before all this new content, Disney+ was a major success.
The service has 86.8 million subscribers, up from 73 million at the end of last quarter. Furthermore, Disney projects between 230 million and 260 million subs by 2024. To put that in perspective, Netflix only had about 195 million global subs at the end of the third quarter.
But we didn’t even get to the best part! You know what Disney has that Netflix doesn’t?
Theme parks, cruise lines and merchandise. So. Much. Merch. With the pandemic set to ease up in 2021, the revenue from those shuttered theme parks and cruise lines is rearing to come back online. And with happy travelers in the boundless Magic Kingdom come merch sales.
Customers — like yours truly — are just dying to buy Mandalorian shirts and Grogu figures. That’s Baby Yoda, for you normies out there.
Here’s the post-pandemic deal: Disney+ and Disney’s movies drive people to buy Disney merchandise and go to Disney parks. It’s literally the perfect people trap, built by a mouse.
DIS will explode in 2021, much like how it weathered the 2020 storm: the rise of Disney’s digital dominance. We mentioned it in last New Year’s recommendations, and the pandemic has only strengthened Disney’s digital pivot since then.
The bottom line: If you still haven’t done so already, buy DIS.
Great Stuff: Auld Lang Syne
Great Stuff is the perfect New Year’s gift for that extra-special someone in your life … someone so special, in fact, that you waited until just now to think about what to get them for the new year. (If you’re into that kinda thing to begin with.)
Either way, show someone just how much you care: Sign them up for Great Stuff today!
The second best extra-special gift you can give? A quick hi, hello and howdy-do! If you’ve never shared your thoughts with us here at Great Stuff, don’t put it off till next year!
Drop me a line at GreatStuffToday@BanyanHill.com. It takes all kinds here, whether you’ve got a market rant in mind or just want to shoot the breeze with me and the team.
Until next time, stay Great!
Editor, Great Stuff