January brought a wild start to the year for Wall Street, which saw the beginnings of an us-versus-them, individual-versus-institution narrative start to play out in a way that’s scarcely been seen.
The sudden surge in a handful of Reddit stocks, driven by traders on the website forum known as WallStreetBets, drove stocks like GameStop (ticker: GME) and AMC Entertainment ( AMC), two fundamentally troubled companies, to huge gains late in the month.
Whether these sudden rallies are sustainable or not is quite a different story, and those names are notably absent from the list of the five best stocks to buy for February:
— Apple (AAPL)
— Nautilus (NLS)
— The Walt Disney Co. (DIS)
— Nike (NKE)
— PayPal Holdings (PYPL)
Apple is not only an out-and-out blue-chip stock, it just strung together its first-ever $100 billion quarter, a remarkable milestone. It also represents 21% growth year over year, a major increase for a company of Apple’s size. Last quarter, Apple beat expectations in just about every category, with earnings per share (EPS) of $1.68 against a consensus $1.41 number.
iPhone revenue alone rose 17% year over year, while the high-margin services segment saw revenue jump 24%. The 5G iPhone was a “big seller” last quarter and promises to bring further sales momentum moving forward.
Although the stock trades for 31 times earnings, it’s hard to turn your back on such a healthy, cash-flush company focused on returning money to shareholders.
Named one of the best stocks to buy for 2021, Nautilus has been on a tear this year, with shares already up 46% year to date. A rival to Peloton ( PTON), Nautilus makes home fitness equipment under its eponymous Nautilus brand, as well as the Bowflex and Schwinn lines, to name a few.
The company is benefiting from the growth in home workout equipment as a result of the pandemic, with analysts expecting the company to post revenue growth of about 80% when the final 2020 numbers come in.
The Walt Disney Co. (DIS)
What a chaotic year it has been for Disney shareholders: The company’s cruise line business and its parks segment have both been decimated as a result of the pandemic, but another part of its business flourished. Its new Disney+ streaming service has gotten off to a legendary start, going from no subscribers to 86.8 million paid subscribers in just over a year. That’s roughly 40% of Netflix’s ( NFLX) total global subscriber count.
DIS stock carries a high forward earnings, as investors expect a swift comeback from its losses over the last year.
With the vaccine rolling out, Disney’s other business lines will start bouncing back as the global economy steadily returns to more normal levels. The Congressional Budget Office recently projected the U.S. economy would be back to pre-pandemic levels by mid-2021, so there’s some indication DIS won’t have to wait long.
Nike was initially one of the major U.S. companies most clearly hit by the pandemic, as the sudden shuttering of its retail locations and worries about its supply chain hit NKE stock.
Since the early days of the pandemic, however, it has become clear that Nike’s investment in the digital side of its business is paying off. Last quarter, Nike’s digital sales surged 84% year over year, with direct sales jumping 32%. Overall, Nike’s online presence helped drive total sales up 9% year over year.
PayPal Holdings (PYPL)
The last among the best stocks to buy for February is PayPal, another business getting a boost from the accelerating movement to digital payments. Last quarter, PYPL posted the strongest quarter in its history by gross revenue and total payment volume.
Although PayPal, which also owns Venmo, can’t expect to post numbers like that every quarter, the market is still expecting relatively strong figures from PYPL when it reports fourth-quarter earnings on Feb. 3. Revenue growth is expected to clock in at 22.8%, while EPS is expected to grow by 16.3%. While quarterly earnings can often serve to be a major catalyst, the sword cuts two ways, and you never know when expectations have simply been set too high.
Regardless of what PayPal’s February earnings report reveals, the company is a great long-term growth stock to buy and hold for years to come, with an enviable first-mover advantage that has helped the company thrive since the turn of the century.
More from U.S. News