Stock picks for the week: March 22, 2021

Mar 22 2021, 3:00 am

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This time last year, Wall Street experienced its fastest plunge into a bear market of all time. Luckily, thanks to a hefty $3 trillion relief package from Congress, it also rebounded at a record-breaking pace.

Although it’s been a volatile 12 months, the stock market has now bounced back to an all-time high. And amongst a retail investing revolution, the new world of crypto art, and the blockchain boom, the market seems to have evolved for good.

As the vaccine continues to roll out across the globe, and the world starts to slowly reopen, the stock market will follow. But just because we’ve passed Wall Street’s one-year Covid anniversary doesn’t necessarily mean you should suddenly go all-in on airline stocks. Or should you? Here are the top stocks to invest in right now.

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Lyft

As vaccines continue to roll out, ride-hailing companies are on the rebound—and Lyft is proof of this. In a blog post last Thursday, Lyft (LYFT) announced that it had the most riders last week since March 2020. The rise in usage is likely due to riders becoming more comfortable travelling now that vaccines are rolling out.

As of Wednesday, shares of Lyft were up 450% and Uber 198% year-over-year. So which stock is better to pick? Since Lyft doesn’t have the regulatory, legal, or contractor woes that its competitor Uber is having in Europe, or the added burden of a food delivery service to weigh on its margins, it seems like the safer bet.

e.l.f Beauty

With the exception of the occasional Zoom call or living room selfie, makeup cabinets around the globe have been collecting dust over the past year. And beauty brands have suffered in turn, with sales dropping by half by Fall 2020.

But as the world reopens, e.l.f Beauty (ELF), known for its inexpensive cult beauty products like its beauty sponges and brushes, might be one of the best beauty brands to invest in.

The company has just developed a line with singer/songwriter Alicia Keys this January and recently released its full-year revenue outlook. With a reported double-digit revenue growth and sales expected to grow 7% to 9%, it seems that before long, e.l.f will no longer be on the shelf.

Splunk

Tech company names can be pretty weird, we know, but Splunk (SPLK) might just win the award for the weirdest. The real-time data, analytics, observability, and security platform gained a lot of initial interest for its platform built for the cloud, but its stock recently plunged due to disappointing top-line performance.

That said, although there are a lot of Splunk skeptics out there, this could be a great time to buy the stock on the dip. With its transition from upfront to annual customer invoicing, the company is implementing new changes to generate high cash flow. Analysts see Splunk becoming one of the industry’s biggest cloud competitors out there, predicting subscription rates to grow as much as 40% and $5 billion by fiscal 2025.

CarMax

Due to health concerns, public transport was an unpopular transport choice during the pandemic—and car sales were up. But hard economic times meant that buying a car brand new wasn’t popular either. So it makes sense that the market for used cars was high and why CarMax (KMX), America’s largest used-car retailer, is up more than 41% this year.

Adding to the company’s obvious success during the pandemic, CarMax also has been pivoting to online transactions and expanded into home delivery and curbside pickup.

Need more convincing? Last week, the company also announced its commitment to achieving net-zero carbon emissions by 2050Analysts see CarMax’s earnings sliding 16% in 2021, but then surging back with a growth of 27% in 2022.

Adobe

Decades-old publishing software giant Adobe (ADBE) is set to report its financials for its first fiscal quarter this Tuesday. The company continues to outperform market expectations, beating Wall Street’s profit targets in all four 2020 fiscal quarters.

Adobe has impressively seen five consecutive years of 20% growth or higher and analysts predict a 22% year-over-year increase in Tuesday’s report. You don’t need Photoshop to know that those numbers are good!

Vital Farms

It’s no secret that farms are vital—to our health and the economy. But ethically-produced food company Vital Farms is striving to make the industry more of a humane one. That’s why it partnered with over 200 family-owned farms to produce ethically-sourced pasture-raised eggs.

With the boom in consciously-farmed food, it makes sense that the company was a trending IPO when it went public last summer.

And business has been booming for the company ever since. After a 32% revenue growth in 2019, the company has seen an increase in 44% in the first quarter of last year. With the company set to report a financial update this Wednesday morning, it’s a hot stock to watch.


Disclaimer: Market Buzz contributor has no position in any of the stocks mentioned.

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