Are These The Best Stocks To Buy In The Stock Market Today?
This year, the stock market has surprised many investors by being able to rebound so quickly. It’s easy to forget that the market has recovered all its losses during the coronavirus pandemic. The S&P 500 and Nasdaq at all-time highs, partly thanks to blue-chip stocks like Amazon (AMZN Stock Report) and Apple (AAPL Stock Report) which led the rally. Considering the speed of the recovery, any slight disappointment in economic data or lingering effects of the pandemic on the economic rebound could weigh on the stock market.
In 2021, the fate of the broader economy and the stock market will likely revolve around the pace and effectiveness of vaccine rollouts for COVID-19. The recent volatility in the stock market today was fueled by the surging COVID-19 infections across the globe. In addition, throughout November, there were around 10.7 million people unemployed in the U.S. The figure suggests that the labor market recovery has not been as speedy as many hoped.
Investors seem to be in a defensive mode when there are so many uncertainties in the market, and that’s understandable. However, if you believe in the potential and the value of stocks with strong fundamentals, you wouldn’t mind paying a dollar more or less today. With all that in mind, do you have a list of the best stocks to buy during this uncertain time?
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Best Stocks To Buy [Or Sell] Now: Fastly
Fastly (FSLY Stock Report) soared nearly 15% on Tuesday. This came after there were rumors of potential interest from Cisco Systems (CSCO Stock Report) to acquire the edge computing specialist. Before this, Fastly’s stock had been in a bit of a downward spiral since announcing preliminary Q3 2020 results. No doubt, the shares of the edge-cloud computing company have been on a tear prior to that. With the massive surge in web traffic during the pandemic coupled with the popularity of TikTok, you can’t blame the disappointment among investors when the company announced that it had lost TikTok as a customer. With a high-flying stock like Fastly, investors’ expectations were through the roof.
Despite the shares had rebounded to the $100 mark during yesterday’s intraday trading, it is still not enough to soothe the battered egos of those who bought FSLY before it released preliminary earnings two months back. But that’s a part of life, isn’t it? Sometimes you take chances that eventually play out in your favor. And sometimes they don’t.
Of course, buying stocks on merger rumors are risky. Admittedly, if Cisco does make an offer, it would likely be significantly above Fastly’s current stock price. On the flip side, if a deal doesn’t happen, you could expect a decline in the stock price in the same magnitude as yesterday’s jump. But however you want to look at it, there is no denying that this edge computing company is sitting in an industry with a long growth runway ahead. Considering that, would you be adding FSLY stock to your watchlist?
Best Stocks To Buy [Or Sell] Now: Stitch Fix
Online apparel retailer Stitch Fix (SFIX Stock Report) has continued to gobble up market share at the expense of rivals. The company’s stock price closed nearly 40% higher on Tuesday. This came after the company reported quarterly revenue of $490.4 million, ahead of analysts’ estimate of $481.2 million. Also, the company’s client base grew 10.2% year over year. You could argue that there’s no online clothing company today that holds more promise than Stitch Fix. The company’s focus on recommendation algorithms is a unique strength, with some calling it the Netflix (NFLX Stock Report) of clothing. Its offering is essential to those who struggle on deciding what to purchase.
“In a time period where many traditional brick and mortar retailers are still experiencing double-digit year over year revenue decreases in their most recent quarter, we delivered an increase of over 240,000 net active clients quarter over quarter, a return to double-digit, year-over-year active client growth, which we expect will increase further this fiscal year,” – Katrina Lake, CEO of Stitch Flix
Stitch Fix is benefiting from a “generally improving” U.S. apparel spending backdrop, according to Morgan Stanley analyst Lauren Schenk. Building on the momentum, the company said it expects revenue to grow by 20% to 25% in fiscal 2021, amounting to $2.05 billion to $2.14 billion, topping Street estimates for $2.01 billion. Having outperformed on earnings and full-year guidance, is SFIX stock a buy right now?
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Best Stocks To Buy [Or Sell] Now: American Airlines
Last, on the list, American Airlines (AAL Stock Report) is probably the most volatile stock to buy on this list. The company’s stock price has jumped more than 57% since early November, handily outperforming its industry rivals. This week, the stock continued to be on the uptrend. That was despite the absence of any specific news. It is arguably the best cheap stocks to buy since many investors still judge stocks by their nominal share prices. Just this month alone, AAL stock has gone up by over 20%. That’s not too shabby by any standard.
The company reported its third-quarter earnings in October where the losses were narrower than analysts have estimated. The company reported revenues of $3.2 billion, a 73% drop year-over-year. American Airlines also reported a 59% decrease in total available seat miles. Besides, it saw a net loss of $2.4 billion for the third quarter.
Now, you could say that AAL stock is now safer to own as the positive vaccine developments reduce the risk of bankruptcy. While the recent gains are signaling some confidence among investors, investors should still tread carefully with this one. That’s because it’s debt levels are what concerns investors the most. Which makes it a more risky play compared to rivals with healthier balance sheets. But the question here is, do greater risks translate to greater reward in this case? Of course, you may be banking on a quick distribution of vaccines and the reopening of flight routes. If that is the case, would you be betting on AAL stock to continue its recent momentum?
