While growth and technology stock prices surged in 2020, many established blue-chip companies were flat for the year. This can present opportunities in the new year for bargain hunters.
Here are a few of the stocks I like for 2021:
Exxon Mobil
Oil stocks have been in the doldrums for a long time. Exxon Mobil (XOM) is trading at a price we haven’t seen since 2004 (see chart below). True, oil prices may remain low for longer, but demand for oil may pick up in 2021 as the global economy restarts. Exxon shareholders aren’t too happy either – investment company D.E. Shaw has been buying shares and calling for change, citing “overspending” (Source: Bloomberg).
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
For me, I like Exxon at these levels for long-term investors as I see it as buying a global leader in an important industry at a reasonable price. Goldman Sachs recently upgraded Exxon to a buy, citing “shares are cheap.”
Figure 1: XOM Stock Price Over the Years - Source: MarketWatch
JPMorgan Chase
The multinational bank’s stock price is down 12% as of Dec. 18, 2020 (Source: Morningstar). CEO Jamie Dimon said the company is looking to make acquisitions to boost growth, citing peer Morgan Stanley’s acquisitions (Source: Reuters).
Morgan Stanley purchased E-Trade and recently outbid JPMorgan Chase (JPM) for money manager Eaton Vance. Morgan Stanley’s stock price is up 30% year to date as of Dec. 18, 2020 (Source: Morningstar). If JPMorgan follows Morgan Stanley’s approach of buying asset managers and fintech in 2021, it could boost the company’s growth and help its share price. Plus, I like buying stocks at bargains, and buying JPM when it’s down 12% gives me some hope.
Hilton Hotels
Hotel stocks took a beating in 2020. But this upcoming year could be different. Consumers will want to get out of their living rooms and travel. This pent-up demand bodes well for the leisure, airline and travel sector.
Headwinds remain, there’s no question, but the stock market is forward looking. Hilton’s stock price could recover faster than that part of the economy. Hilton (HLT) is down about 5.46% year to date (Source: Morningstar). Oh, and by the way, Hilton has $3.5 billion in cash, which is a 328% increase in year-over-year cash reserves — that’s one impressive rainy day fund (Source: MacroTrends).
Disclaimer
Investment advisory and financial planning services are offered through Summit Financial LLC, an SEC Registered Investment Adviser, 4 Campus Drive, Parsippany, NJ 07054. Tel. 973-285-3600 Fax. 973-285-3666. This material is for your information and guidance and is not intended as legal or tax advice. Clients should make all decisions regarding the tax and legal implications of their investments and plans after consulting with their independent tax or legal advisers. Individual investor portfolios must be constructed based on the individual’s financial resources, investment goals, risk tolerance, investment time horizon, tax situation and other relevant factors. Past performance is not a guarantee of future results. The views and opinions expressed in this article are solely those of the author and should not be attributed to Summit Financial LLC. Links to third-party websites are provided for your convenience and informational purposes only. Summit is not responsible for the information contained on third-party websites. The Summit financial planning design team admitted attorneys and/or CPAs, who act exclusively in a non-representative capacity with respect to Summit’s clients. Neither they nor Summit provide tax or legal advice to clients. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state or local taxes.
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
-
The Home Stretch: Seven Essential Steps for Pre-RetireesThe decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
