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7 Stocks to Buy As Americans Receive Stimulus Checks

Posted on Thursday, December 31st, 2020 by MarketBeat Staff
7 Stocks to Buy As Americans Receive Stimulus ChecksMillions of Americans will be receiving an additional $1,400 as part of the Biden stimulus plan after receiving $600 as part of the stimulus bill that President Trump back on December 27, 2020. Many already have.

For many Americans, there is a definite plan for how that money will be spent. And the usual suspects like Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) will likely continue to be busy. However, for other Americans, the money they receive will truly be like finding money. Both scenarios present different thoughts for investors.

You may agree with the payments. You may disagree with them. It really doesn’t matter, they’re coming and now as an investor, the question is how can you benefit from the new spending that will undoubtedly occur as a result of Americans receiving this stimulus?

We have some ideas and we’re sharing them with you in this special presentation. It’s comforting to remember that for many people receiving the stimulus checks will help ease the pressure from desperate circumstances.

#1 - Dollar General (NYSE:DG)

Dollar General logo

Let’s start with what should seem like an obvious choice. Dollar General (NYSE:DG) has been one of the largest pandemic winners. It’s not just about the prices. Like real estate, location matters. And Dollar General has a large footprint that extends into areas that are not always covered by the big box chains. In fact, about 75% of the company’s nearly 17,000 stores are located in small cities defined as those with populations of 20,000 or less.

That’s significant in a world where social distancing and staying home have mattered. What’s also significant is that Dollar General is making a push into areas such as fresh produce and frozen goods. This is helping the company compete more directly in the grocery arena.

Dollar General stock is up about 34% in 2020. And with the stock down about 4% in the last month, DG stock may present an attractive buy-on-the-dip opportunity. To that end, analysts give Dollar General stock a price target of over $225.

About Dollar General
Dollar General Corp. engages in the operation of merchandise stores. Its offerings include food, snacks, health and beauty aids, cleaning supplies, basic apparel, housewares, and seasonal items. It sells brands including Clorox, Energizer, Procter & Gamble, Hanes, Coca-Cola, Mars, Unilever, Nestle, Kimberly-Clark, Kellogg's, General Mills, and PepsiCo The company was founded by J.Read More 

Current Price: $212.80
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $243.58 (14.5% Upside)


#2 - Target (NYSE:TGT)

Target logo

Another retail stock that stands to benefit from consumer spending is Target (NYSE:TGT). This shouldn’t be a surprise to those who have been paying attention to the retail sector over the past 18 months. Target was an early adopter of the omnichannel model that now defines the winners from the losers in the retail space. In 2019, Target was considered to be on the ropes as it made a pivot to increase its e-commerce present.

That has turned out to be a brilliant move. As stores were closed for public health concerns, Target was able to cash in. The company was one of the few retailers to see stronger sales during the second quarter, and sales have continued to be strong.

Target stock is up about 38% for the year and is down about 2% in December. Analysts suggest that the stock has room to fall, but those opinions were issued before the news of further stimulus. Target looks to be a solid winner heading into 2021. And the Dividend King (with 52 years of annual distribution increases) is a good stock for growth and value investors.

About Target
Target Corp. engages in the operation and ownership of general merchandise stores. It offers food assortments including perishables, dry grocery, dairy, and frozen items. The company was founded by George Draper Dayton in 1902 and is headquartered in Minneapolis, MN.

Current Price: $245.71
Consensus Rating: Buy
Ratings Breakdown: 16 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $251.42 (2.3% Upside)


#3 - Kroger (NYSE:KR)

The Kroger logo

As a pure-play on groceries, there are few companies that are a better bet than Kroger (NYSE:KR). Traditional supermarket chains have notoriously thin margins and face competition. Both of these act as headwinds for stock growth in normal times.

In an understatement of epic proportions, these are not normal times. And Kroger has proven to be more than up for the challenges of 2020. And as much as all of us would like to wish differently, we’re still going to be dealing with the novel coronavirus for a good bit of 2021, which makes Kroger a good stock to add to your portfolio.

The company posted strong earnings and revenue in the previous quarter including with growth in its digital sales. This is significant because even when the economy reopens in full, many shopping habits have been changed for good. Many Americans will still look to have their groceries delivered. And  Kroger has made strategic investments in its online delivery and pickup services which should position it well for whatever comes next.

About The Kroger
The Kroger Co engages in the operation of supermarkets and multi-department stores. Its brands include Big K, Check This Out…, Heritage Farm, Simple Truth, and Simple Truth Organic. The company was founded by Barney Kroger in 1883 and is headquartered in Cincinnati, OH.

Current Price: $38.59
Consensus Rating: Hold
Ratings Breakdown: 1 Buy Ratings, 11 Hold Ratings, 4 Sell Ratings.
Consensus Price Target: $38.56 (0.1% Downside)


#4 - Overstock.com (NASDAQ:OSTK)

Overstock.com logo

Perhaps one of the most unexpected pandemic winners has been the home furnishings category. And a company that has benefited from this growth has been Overstock.com (NASDAQ:OSTK). Furniture manufacturers have had a rough time of it over the last 20 years. But with Americans sheltering in place, many decided it was time that their home décor needed a face lift. And Overstock was more than happy to help them give their homes a facelift.

One catalyst for Overstock is its emerging cryptocurrency trading platform, tZero Markets a retail-oriented brokerage for digitized securities. Some analysts are excited about the potential that this may provide for the company’s earnings.

This may be a reason to hold the stock down the road, but for now, stick to the strength in the company’s core business. OSTK stock is up over 600% in 2020. And the company looks well positioned to continue that growth into 2021. Analysts agree. Overstock has a price target of over $100 which would be a near 100% gain from the stock’s current level.

About Overstock.com
Overstock.com, Inc operates online shopping commercial site. It also sells these products through www.overstock.com, www.o.com, and www.o.biz. It operates through the following business segments: Retail, tZERO, and MVI. The Retail Segment engages in e-commerce sales through its website. The tZERO Segment focuses on securities transaction through its broker-dealers.Read More 

Current Price: $77.67
Consensus Rating: Buy
Ratings Breakdown: 3 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $114.25 (47.1% Upside)


#5 - Activision Blizzard (NASDAQ:ATVI)

Activision Blizzard logo

Yes, video game stocks were a pandemic winner. And it’s reasonable to expect that companies like Activision Blizzard (NASDAQ:ATVI) will benefit as many Americans remain under varying degrees of mitigation measures due to the pandemic. In fact, ATVI stock is up 56% as 2020 comes to an end.

But that’s missing the bigger story for Activision Blizzard. The company, and others in its sector, have always known that the pandemic surge was a one-off event that will, hopefully, never be repeated. But the company is expanding ways to monetize its business.

For example the company has introduced its popular Call of Duty title into its mobile gaming platform. It’s also using its free-to-play Warzone game as a way to get users into its Call of Duty ecosystem. And what does all that mean? It means that even as society began to re-open in the summer and into fall, player engagement as measured by average hourly commitment remained very high.

About Activision Blizzard
Activision Blizzard, Inc engages in the development and publication of interactive entertainment. It operates through the following segments: Activision Publishing, Blizzard Entertainment and King Digital Entertainment. The Activision Publishing segment develops and publishes interactive software products and entertainment content, particularly for the console platform.Read More 

Current Price: $76.40
Consensus Rating: Buy
Ratings Breakdown: 20 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $113.45 (48.5% Upside)


#6 - DraftKings (NASDAQ:DKNG)

DraftKings logo

A perhaps not so surprising phenomenon of the pandemic was that millions of Americans wanted to gamble with their stimulus money. And the reopening of sports has created a strong environment for the growth in stocks lIke DraftKings (NASDAQ:DKNG).

DraftKings was one of the many companies that went public through a special purpose acquisition company (SPAC). The company debuted in April and the stock is up nearly 350%.

But the question for many investors is what will the stock do in the future? If analysts are to be believed then now would be a good time to jump on DKNG stock. The company is covered by 25 analysts who give the stock an upside of nearly 20%.

Late in 2020, DraftKings announced a partnership with ESPN that makes the company an exclusive provider of daily “fantasy sports” operations. It’s also a “co-exclusive partner for gambling link-outs” at ESPN. This will keep DraftKings top of mind for many current, and potentially future, gamblers.

About DraftKings
DraftKings Inc operates as a digital sports entertainment and gaming company in the United States. It operates through two segments, Business-to-Consumer and Business-to-Business. The company provides users with daily sports, sports betting, and iGaming opportunities. It is also involved in the design, development, and licensing of sports betting and casino gaming platform software for online and retail sportsbook, and casino gaming products.Read More 

Current Price: $48.08
Consensus Rating: Buy
Ratings Breakdown: 21 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $68.55 (42.6% Upside)


#7 - Apple (NASDAQ:AAPL)

Apple logo

If you’re more interested in something on the tech side of things, you can still look at Apple (NASDAQ:AAPL). First, after the company’s three-for-one stock split in late summer, shares are attractively priced and still up 77% for the year.

Second, the company just launched the latest version of its iPhone (the iPhone 12). And to say the response has been strong is an understatement. In October the iPhone 12 made up 24% of the 5G smartphone market worldwide even though it had only been launched for two weeks. The company was smart and aggressive in pricing the devices and with the addition of 5G technology, plus an established core of users on an upgrade cycle, the match was lit.

New stimulus dollars could very well be the inflection point for even stronger sales. And don’t forget the company continues to gain traction in areas such as wearables and services. The services business alone recorded 16% year-over-year growth in 2020.

About Apple
Apple, Inc engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services. It operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific. The Americas segment includes North and South America.Read More 

Current Price: $144.84
Consensus Rating: Buy
Ratings Breakdown: 24 Buy Ratings, 6 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $165.13 (14.0% Upside)

 

Investors can probably add their own stocks to this list. There are many stocks that will benefit from consumers having a bit more purchasing power. However, I should state very clearly that if you are among the millions of Americans receiving a stimulus check, your first priority should be to pay bills and to add to your emergency funds.

This presentation is primarily aimed at higher-income individuals who aren’t going to receive a stimulus check but can profit from the companies that stand to benefit. And it’s also aimed at individuals for whom the stimulus provides them with an opportunity to invest.

Like many events that happened in 2020, this latest round of stimulus is by definition, a stimulant. There are many other reasons to be optimistic about the prospects for equities for 2021. However, additional direct payments to millions of Americans can help get the ball rolling. And by investing in these companies, you can ensure that your portfolio gets off to a strong start.

20 "Past Their Prime" Stocks to Dump From Your Portfolio

Did you know the S&P 500 as we know it today does not look anything close to what it looked like 30 years ago? In 1987, IBM, Exxon, GE, Shell, AT&T, Merck, Du Pont, Philip Morris, Ford, and GM had the largest market caps on the S&P 500. ExxonMobil is the only company on that list to remain in the top 10 in 2021. Even 15 years ago, companies like Radio Shack, AOL, Yahoo, and Blockbuster were an important part of the S&P 500. Now, these companies no longer exist as public companies.

As the years go by, some companies lose their luster, and others rise to the top of the markets. We've already seen this in the last few decades, with tech companies surpassing industrial and energy companies that once dominated the S&P 500. It's hard to know what the next mega-trend will be that will knock Apple, Google, and Amazon off the top rankings of the S&P 500, but we know that companies won't stay on the S&P 500 forever.

We've identified 20 companies that are past their prime. They aren't at risk of a near-term delisting from the S&P 500, but they show negative earnings growth for the next several years. If you own any of these stocks, consider selling them now before they become the next Yahoo, Radio Shack, Blockbuster, AOL and are sold off for a fraction of their former value.

View the "20 "Past Their Prime" Stocks to Dump From Your Portfolio" Here.





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