Stocks rose in February, driven by widespread anticipation of further stimulus spending, as well as dovish commentary from the Federal Reserve, which doubled down yet again on its pledge to support the economy with low interest rates and asset purchases.
The influx of money into the economy over the last year has notably inflated asset prices in corners of the market, with real estate prices advancing and holdings like Bitcoin hitting all-time highs of more than $58,000 last month.
Late in February, concerns over rising interest rates weighed slightly on the markets, although when all was said and done the S&P 500 finished the month with a slight gain. With that in mind, and as the U.S. vaccine rollout continues ramping up, here are five of the best stocks to buy for March:
— Alibaba Group (ticker: BABA)
— ViacomCBS (VIAC)
— Goldman Sachs (GS)
— The Walt Disney Co. (DIS)
— Bumble (BMBL)
Alibaba Group (BABA)
First on the list of top stocks for March is China e-commerce giant Alibaba, which also made the cut as one of the 10 best stocks to buy for 2021.
Shares took a dip in February, offering investors a nice chance to buy into a fast-growing global powerhouse at an extremely reasonable price. At about 20 times forward earnings, and with expected revenue growth of 39% in 2021 and 30% in 2022, BABA remains a best-in-class, quality large-cap growth stock that actually trades at a discount to the S&P 500’s forward price-earnings ratio of 23.
Next up is ViacomCBS, a media and entertainment giant trading for about 15 times earnings. Unlike BABA, it pays a modest 1.5% dividend to boot. Shares have been on a run over the last year, as a beta of 1.8 helped shares rally; initially, the stock was badly beaten down by the pandemic, which sparked fears that ad revenue from live sports would all but disappear.
As sports gradually made their way back on the air, VIAC recovered from beaten-down levels, and now investors are applauding the company’s growth plans in the streaming market. ViacomCBS, which owns Nickelodeon, Showtime, Comedy Central, BET, MTV, Paramount, VH1 and the namesake CBS, among several other brands, is coming off a late-February announcement that the company will launch a new paid streaming service called Paramount+ on March 4.
The service will be available with advertisements for $4.99 a month, or $9.99 a month for the ad-free version. Paramount movies will debut on the service shortly after their theatrical releases, and spinoffs of shows like “Star Trek” and “SpongeBob SquarePants” will also be carried.
The company expects 70 million streaming subscribers and streaming revenue of $7 billion annually by 2024.
Goldman Sachs (GS)
Bank stocks are poised to benefit from increasing rates as the economy regains its footing, states and localities gradually reopen, and vaccine breakthroughs from Johnson & Johnson ( JNJ) and potentially Novavax ( NVAX) come to market. Banks benefit from rising rates, which help boost net interest margin, a key profitability statistic for financial institutions.
Goldman’s trading division has also been benefiting in recent quarters, as frenzied market activity drove fourth-quarter revenue growth of 23% in its global markets segment. A blistering market for initial public offerings combined with a price-earnings ratio of 13 — despite expected five-year earnings per share growth of more than 16% — makes GS one of the best stocks to buy for March.
The Walt Disney Co. (DIS)
Along with Alibaba, Disney also made the cut as one of our 10 best stocks to buy for 2021. It remains an attractive buy a couple of months into the year, if only because its biggest catalyst, Disney+, is still going strong. In more or less a year, the streaming service has amassed more than 94.9 million subscribers, with the company expecting somewhere between 230 million and 260 million subscribers by 2024.
The reasons to buy Disney are arguably more qualitative than quantitative, as the company has no trailing earnings due to the unexpected hit of the pandemic on its bottom line. But its management is in rarefied air, with chairman of the board and former Disney CEO Bob Iger arguably one of the most legendary executives in all of corporate America.
As the vaccine gains wider and wider acceptance, divisions like parks and cruises should come roaring back, making the company stronger than ever.
Bumble is certainly the most speculative name on this list, but the greater risk is directly accompanied by the greater potential reward. Again, Bumble’s allure is more qualitative than fundamentals-related, but it should benefit from being a central player in an industry with long-term tailwinds: online dating.
As one of only two major companies in the highly concentrated and growing industry, Bumble just went public in February. The second fiddle to the much larger Match Group ( MTCH), BMBL’s valuation is more than $8 billion, a fraction of the valuation of the $41 billion Match.
IPOs can often turn out to be a little bubbly for retail investors, and it looks to be the case for Bumble as well; the stock jumped to more than $84 a share on the first day of trading but now trade around $70 a share in early March. Although it’s certainly possible shares recede further, long-term investors should be encouraged by the performance of rival Match Group, which traded for less than $10 per share in early 2016 before soaring to all-time highs of more than $174 per share in 2021.
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