The simplest strategy for amassing wealth and building a rock-solid retirement portfolio is to buy stock in excellent companies and hold them for the long haul.
Whether you’re looking to add to your portfolio or are just getting started, our list of the best stocks to buy now will help you get on the path to investing success.
You see, investors are too often concerned over when to buy and when to sell. Owning the right stocks will beat timing the market every time.
The COVID-19 crash last year is a perfect example…
Nobody knew how long the decline would last. In fact, most analysts thought the drawdown in stocks would last a lot longer than it did.
But we knew investors who continued to buy the best stocks on the market would be handsomely rewarded.
And that’s turned out to be correct.
That’s why we weren’t worried about trying to time the bottom. Since it’s near impossible to get that right, we simply recommended buying the best stocks on the market and holding them over the long term.
The returns we’ve helped our readers generate speak for themselves:
Now that the worst of the coronavirus is over and markets are nearing record highs, investors are concerned with the risk of buying at the top. After all, the economy is far from being fully recovered, and many risks remain, even as stocks near record highs.
But the strategy is the same. Owning high-quality stocks over the long term beats trying to time the market.
The best part is, we’re still finding opportunity in a select group of stocks with similar return potential today.
To get you started, here's our list of the best stocks to invest in right now.
They've each been picked by Money Morning's team of market experts, each with decades of trading and investing experience.
Our experts don't work for big banks or brokerage houses. They aren't money managers hoping to skim off a percentage of your portfolio. They are offering their experience and expertise directly to our readers because they are sick of Wall Street parting everyday folks with their money.
They've pinpointed these seven stocks as having outstanding short-term and long-term profit potential.
This could be the only chance you have in your life to get into great companies at such low prices. Let's get started.
Who They Are: Alibaba Group Holding Ltd. (NYSE: BABA) is one of the world's largest e-commerce companies, with a market cap over $540 billion. It operates a network of sites in China.
The company isn't just focused on e-commerce. Alibaba has expanded into cloud computing, digital media, entertainment, and even healthcare platforms. Because of this growth, Alibaba is often referred to as the "Amazon of China."
In fact, its earnings over the last 12 months were over $1 billion more than Amazon's. If it were valued the same way Amazon was, BABA stock would skyrocket 121%.
Why Now Is the Time to Buy: Money Morning Executive Editor Bill Patalon has called Alibaba a "single-stock wealth machine" and "one of the single greatest wealth opportunities of our lifetime." He sees every share of Alibaba you buy – trading around $260 at the end of January – being worth $2.1 million in four decades.
There are three big reasons behind Alibaba's potential…
These "toxic stocks" belong nowhere near your portfolio – dump them today.
These "toxic stocks" belong nowhere near your portfolio – dump them today.
Why BABA Is a Buy: The Biggest Shopping Day of the Year
Alibaba has turned "Singles Day," an anti-Valentine's Day tradition, into a global shopping event. In November 2020, more than $74.1 billion was spent by more than 800 million people worldwide over Alibaba's networks of sites. It was the most money ever spent on a single shopping event. The number of buyers was more than the combined population of the United States, Mexico, Brazil, and Canada.
That's more than 7 times what shoppers spent on Amazon’s Prime Day this October ($10.4 billion).
The buying was so frenzied that over 583,000 orders were being placed per second at its peak.
There is truly nothing like Singles Day anywhere else in the world. And the holiday is only growing.
Those 2020 numbers represented a 95% increase from 2018.
That staggering sales growth has translated to a significant earnings boost…
Why BABA Is a BUY: Alibaba Is an Earnings Machine
For such a large company, Alibaba is still growing its earnings at a breakneck pace.
For the full year 2020, BABA earned $7.90 per share. That was a 58% increase from FY 2019.
Those earnings are expected to climb 11% to $8.80 in 2021 and 27% to $11.24 in 2022.
Those estimates are likely conservative.
After all, Alibaba has crushed earnings estimates by an average of 25% each of the last four quarters.
Revenue is expected to grow at a similar pace. The company had 22% revenue growth in 2020 and consensus estimates call for 30% in 2021.
It's really no surprise the company has an impressive 32.7% profit margin in 2020. Since its founding in 1999, Alibaba has had one of the most innovative leadership teams in the world…
Why BABA Is a Buy: The Right Leader Is Guiding the Way
Singles Day 2020 was the second since visionary founder Jack Ma left the company.
There was a lot of nail-biting on Wall Street when Ma's retirement was announced in 2018. But in fact, the care with which Ma's succession was handled only demonstrates what an exceptionally well-run company Alibaba is.
CEO Daniel Zhang, who took over as executive chair in September 2019, was the creator of the Singles Day sales event.
Since he became CEO in 2015, Alibaba became the first Asian company to pass $700 billion in market value and has emerged as one of the top 10 most valuable public companies in the world.
Even with Ma's departure, there's no reason to think the company will slow down. Between Alibaba's business model and rapid growth in Asia, this is the online retail giant with the most room to grow in the next few decades.
Who They Are: Adobe Inc. (NASDAQ: ADBE) is highly regarded for products like Illustrator for creating, editing, and managing graphics as well as Photoshop for managing and editing pictures.
They're products that Money Morning Defense and Tech Specialist Michael A. Robinson has been using for decades.
Like most technology companies, Adobe continuously updates its offerings. The company keeps them current with contemporary needs like the work-from-home trend that’s now expected to be permanent for about 50% of companies even after the pandemic.
Why Now Is the Time to Buy: In a wild-and-wooly market like the one we're navigating now, focusing on a company whose products, services, and technologies you know, like, and use (even more when working from home) can give you one heck of a competitive advantage. Even as the economy changes and the vaccines lead to businesses reopening, companies with must-have products have only entrenched their footholds.
That's why Robinson loves the stock so much. Throughout his more than 30-year career, Robinson has relied on Adobe and its suite of products.
Why ADBE Is a Buy: It Knows How to Sell
Back in 2009, the firm quietly began moving from a "sales" model to a de facto "rental" model. This means users pay monthly fees on an ongoing basis to gain and maintain access to a range of products delivered via the Web, or "the Cloud."
The timing of this shift was perfect.
It's not just because the global cloud market is growing at 21.4% a year and will be worth $185.8 billion by 2024, according to KBV Research.
It's something far more fundamental. A well-run firm that uses the cloud to deliver software as a service (SaaS) has two factors operating in its favor that hardware companies can only dream about.
The first is high profit margins. The second – which is even better – is recurring revenue: The money literally rolls in month after month after month.
The firm says that – as of the end of this year, when you add up of all its various services – its total addressable market will be $80 billion.
Over the past three years, Adobe has grown its sales an average of 24% annually, meaning the firm is doubling sales roughly every three years.
At that rate, sales could hit $21.3 billion by the end of 2023. By 2026, they could come in at a stunning $40.6 billion.
Why ADBE Is a Buy: Excellent Partnerships
Robinson is always on the hunt for well-run firms captained by top-notch leaders.
One way you can judge that is by looking at key partners. And Adobe is working closely with Microsoft Corp. (NASDAQ: MSFT), one of the world's very best cloud-services players – and a firm that itself made the jump from software publisher to the SaaS model.
Microsoft ranks No. 2 in cloud hosting behind Amazon Web Services. Back in December, Adobe and Microsoft unveiled a sweeping alliance. Adobe Experience Cloud and Adobe Document Cloud integrated with Microsoft's Dynamics 365, Office 365, LinkedIn, and Azure cloud infrastructure services.
The move gives Adobe access to 180 million of Microsoft's commercial customers. Adobe has said it's getting a "phenomenal response" for the Microsoft integration.
Forget AT&T, T-Mobile, or Verizon. The real returns in 2021 and beyond will come from this backdoor 5G market.
Forget AT&T, T-Mobile, or Verizon. The real returns in 2021 and beyond will come from this backdoor 5G market.
Why ADBE Is a Buy: This Stock Could Double Your Money
To find stocks that can jump 100% higher from when you buy them, you need to look at the firm's earnings, its earnings growth rate – and then calculate how long it will take to double profits.
By doing that, we can figure out how long – on average – it should take for the stock price to double, as well.
With Adobe, after a detailed review of its financials, Robinson projects earnings per share (EPS) will grow by an average 30% over the next three years.
This is a conservative forecast.
The fact is that – over the past three years – Adobe has grown its EPS at an average annual rate of over 30%.
It finished 2020 with EPS up 80%, from $6 to $10.83.
Robinson is keeping his growth estimate conservative, at 30%.
By inputting that number into his "doubling calculator" (an equation mathematicians refer to as the "Rule of 72"), we find that the stock should double in 2.4 years (72/EPS Growth Rate of 30% = Doubling Time Frame of 2.4 years).
For the 12-month stretch that ended Sept. 2 – when Adobe hit its most recent high of $536.88 per share – the company's shares had risen 72.6%. That's six times the return of the S&P 500, which rose 12.1% during that same time frame.
While the price has pulled back slightly since then, that’s only serving as an opportunity for investors to buy at a discount.
Who They Are: SolarEdge Technologies Inc. (NASDAQ: SEDG) is one of the world’s leading solar companies and our favorite way to play the explosive growth happening in the renewable energy space. Solar costs are now on par with fossil fuels, and the Biden administration is making renewable energy funding a priority. It’s a double catalyst for this exciting sector.
SolarEdge designs, manufactures, and sells direct current optimized inverter systems for solar installations. Solar simply won't work without them, and SEDG makes the best inverters on the planet.
In addition to inverters, the company has also developed a cloud-based monitoring platform to help manage energy consumption. This is a great development since it extends the company’s reach beyond manufacturing and into a service essential to solar power.
SEDG is one of the best pure solar plays because it sells its hardware and software to residential solar installations as well as commercial solar installations.
By keeping its addressable market as large as possible, SolarEdge is growing sales at a rapid pace… It's up 62% since 2019 and has averaged 86.3% over the last three years.
If it's able to keep that pace over the next three years, investors could really see some explosive gains from SEDG stock.
Why Now Is the Time to Buy: Renewable Energy Is the Future
When it comes to making money in stocks, it pays to spot trends early. Look no further than work-from-home stocks this year.
That's why we’re looking at the solar sector, which is downright unstoppable.
Renewable energy has major advantages over traditional energy sources. It’s not controlled by Middle East dictators. It doesn’t need to be shipped across the world or mined from under the ground. It can’t dry up, and it doesn’t pollute the environment.
The only thing that’s been missing has been the technology to make it efficient and affordable. That’s finally here. And it’s creating opportunities left and right. Just look at the money flowing into electric vehicle stocks right now.
In the case of solar power, there's still massive growth potential ahead.
Right now, over 60% of electricity generation in the United States is from fossil fuels, which means there's plenty of growth left for solar.
Even with the current 30% tariff on Chinese solar panels set in place in 2018, which was originally seen as a major setback given much of the manufacturing is outside of the United States, solar has continued to grow…
Take a look at how much solar usage has gone up in the last decade.
While this looks like we have added a lot of capacity, we still have a long way to go (with a lot of money to be made along the way).
In 2019, solar energy provided only 2% of total U.S. electricity. But we expect that will at least triple to 6%, and possibly quintuple to 10% by 2024.
On top of that, the economics have also gotten better. Solar costs have fallen 82% since 2010, making it a much more affordable form of energy.
As solar costs continue to fall, they'll continue to replace more expensive fossil fuels.
Why SEDG Is a Buy: The Biden Administration Is Prioritizing Solar
Solar power has been popular in Washington lately, and the Biden administration is no exception.
In May 2020, the Trump administration greenlit the largest solar project in the United States. The Gemini solar project in Nevada will be a $1 billion, 690-megawatt power plant with 380 megawatts of battery storage when complete.
During his campaign, President Joe Biden also promised to rejoin the Paris Climate Accord and get America's electric grid to be carbon-neutral by 2035.
The economic benefits of this changeover, in terms of job creation and GDP growth, could be substantial. But it will nevertheless require massive investments in wind, solar, hydro, biomass, and nuclear power.
These 19 stocks are like poison for portfolios – and far too many investors are holding them without even knowing.
These 19 stocks are like poison for portfolios – and far too many investors are holding them without even knowing.
While we have seen several solar plants built in the last few years, the Biden-Harris campaign promised to spend $2 trillion on renewable energy. Now that the COVID-19 relief package is passed, the White House and Congress are turning their sights on infrastructure spending. And solar could feature heavily.
Within this plan, they want to create a task force to push the install of 500 million solar panels to help reach a goal of 100% carbon-free electricity by 2035, a much quicker goal than the prior target of 2050.
Biden's program also calls for putting in 500,000 electric vehicle charging stations by the end of 2030 and shoring up tax credits for buying electric vehicles. The USPS already launched a $6 billion program to replace mail trucks with electric vehicles.
More to the point, the Biden administration may well create a national solar incentive or mandate similar to California's requirement that new homes be built with solar panels.
Even without that, analysts expect to see U.S. solar installations to grow by 42% from now through 2025.
And the most lucrative way to play this is SolarEdge. The inverters the company manufactures are absolutely critical for providing consumable solar power. And this company sells the best ones in the business.
Over the past three years, the firm has grown earnings by an average of 30%. At that rate, it's on pace to double in 18 months, not counting the impact of any new solar legislation out of Washington.
Who They Are: Constellation Brands Inc. (NYSE: STZ) is the beverage giant behind Corona beer, Ravenswood wine, and Svedka vodka. Since 2017, the company has been expanding into the legal cannabis market. And it's the best cannabis stock to buy before legalization becomes even more widespread.
Congress is already working on bills that would end the Schedule I designation for cannabis and laws that would end the federal prohibition of cannabis. This could lead to an explosion of opportunities for marijuana companies. Plus, even more states could be encouraged to legalize cannabis.
That’s part of the reason Constellation is such a great play here.
In 2017, Constellation Brands became the first Fortune 500 company to invest in legal cannabis, buying a $191 million stake in Canopy Growth Corp. (NYSE: CGC). Since then, it has upped its investment to more than $4 billion.
Its favorable position to capture much of the recreational cannabis market has analysts at the National Institute of Cannabis Investors (NICI) calling it a "stock to retire on."
Why Now Is the Time to Buy: Constellation Is a Powerhouse
Constellation is a powerhouse company you'll want to keep in your portfolio on a very long-term basis – it's only going to grow every year. Its beverage lineup alone makes it a great buy.
And as the market for cannabis-infused beverages opens up in Canada and elsewhere, its partnership with Canopy gives it a leg up now that cannabis-infused beverages are legal in Canada.
It's more than legalization fueling Constellation Brands' rise. There are three reasons this stock will be making shareholders a fortune…
Why STZ Is a Buy: Constellation Is Already an Outstanding Blue-Chip Company
While many cannabis companies are young startups without a proven track record, Constellation has already built a massively profitable empire with its beverage brands, averaging over $2 billion in profits each of the last four years.
The road to success wasn't always an easy one. Going back to the late 1980s, Constellation lost 70% of its value over three and a half years. But it bounced back in a big way in the 1990s, and it has since acquired some of the most recognized brands in beer, wine, and spirits.
Analysts at NICI have called CEO Bill Newlands and the controlling shareholders "the best management team of any company in any industry in the world."
Constellation also pays a dividend, which you won't get from any pure play cannabis stocks. The 1.4% dividend yield can help you ride out any turbulence to greater and greater wealth.
Why STZ Is a Buy: Canopy Is One of the Largest Growers in Canada
Constellation now holds a 38.6% percent stake in Canopy. So, an investment in Constellation is also an investment in Canopy, which is definitely to investors' advantage.
Canopy was already one of the dominant players in the Canadian medical cannabis market when Constellation made its investment. Canopy has the highest revenue of all Canadian marijuana companies. Now armed with a multibillion-dollar war chest, Canopy has made a slew of acquisitions all around the world.
That includes a deal with U.S.-based Acreage Holdings Inc. (OTCMKTS: ACRGF), which sets up a potential acquisition that will be triggered if the U.S. federal government legalizes cannabis. That could be closer than ever as Senate Majority Leader Chuck Schumer is proposing a bill that would do just that.
The move ensures that Canopy – and Constellation Brands – will be ready to pounce if the U.S. market opens up on a broad scale.
Canopy isn't limiting its scope to North America either. It has acquired cannabis enterprises in European countries as well, including Spain and Denmark. In May 2019, Canopy acquired the German company Cannabinoid Compound Co., or C3, the largest CBD-based pharmaceuticals company in Europe.
At this point, you might be tempted to buy shares of Canopy too. There's certainly nothing wrong with that. But buying Constellation gives you an extra level of profit potential. Here's why…
Why STZ Is a Buy: Cannabis Beverages Are Ready to Explode
Cannabis-infused beverages became recreationally legal in Canada just last December. And they are a prime candidate to take over as the cannabis consumption method of choice for a number of reasons…
First, they are simply a more familiar option to many people. A Canadian government survey showed 77% of adult residents drink alcohol, but only 17% smoke.
And unlike alcohol, cannabis is calorie-free, giving drinkers an alternative that won't contribute to weight gain.
Plus, cannabis doesn't cause hangovers.
So, Constellation and Canopy have a chance to attract not just cannabis users looking for new consumption methods, but also drinkers who want the kick without the side effects.
Constellation already has a dominant beverage empire. Add cannabis to the mix, and the sky's the limit.
Who They Are: Microsoft Corp. (MSFT) needs no introduction. It's one of the biggest tech companies in the world, with more than 156,000 employees.
The company is a household name due to the success of its software products, as well as its productivity products like Microsoft Office and Office 365 Security. But it's become much more than the software company Bill Gates founded in 1975…
Why Now Is the Time to Buy: Microsoft Is Resilient
We’ve already seen stocks bounce back in a big way from the pandemic, but that’s just paving the way for even bigger growth once the economy fully rebounds.
And Microsoft will continue to lead the way.
To this point, MSFT's peak-to-trough drop during the pandemic and resulting economic crisis was only around 27%, and it has rallied well (60%) since mid-March.
Don’t expect that to let up either, especially as the economy recovers. Microsoft could be the next company to reach a $2 trillion market cap.
Why MSFT Is a Buy: Its Strong Core
Microsoft was one of the best stocks on the planet going into the pandemic and still will be coming out of it.
A big reason for that is the company’s ability to generate cash.
Take a look at net cash flow from operations, one of the most important metrics for businesses.
Here's how those numbers have looked for the past four years: 2016 = $33.3 billion; 2017 = $39.5 billion; 2018 = $43.9 billion; 2019 = $52.2 billion; 2020 = $60.6 billion. That's some impressive growth in cash generation.
The pandemic didn’t’ slow that down, and the economic recovery coming our way can only boost these higher.
Why MSFT Is a Buy: A Leader in Cloud Computing
Its cloud computing arm continues to thrive, growing revenue and market share faster even than the juggernaut that is Amazon.
Back in 2018, 80% of all enterprises were running their applications through Amazon Web Services (AWS). But by the end of that year, the adoption rate for Microsoft Azure jumped to 58%.
Microsoft’s Azure even won a coveted $10 billion cloud computing contract with the U.S. Department of Defense over AWS in 2019.
Cloud-computing platforms and services are an essential part of enterprises in today's market – increasing the number of new digital businesses and operating an IT infrastructure for existing conglomerates.
In 2020, 87% of all major enterprises had a multi-cloud system to help manage their operations. And large public companies with over 1,000 employees were spending, on average, over $6 million on cloud-computing technology.
According to Statista, the global cloud computing industry will hit $305 billion by the end of 2021. That's up a whopping 25.7% from 2019.
And cloud computing isn't the only industry Microsoft is a major player in…
Why MSFT Is a Buy: The Growing E-Sports Market
Let's not forget the substantial video game segment of MSFT's business, which is getting a major boost from the coronavirus due to the massive amount of people being forced to stay at home.
During this time of social distancing, numerous video game platforms have reported significant spikes in interest, particularly in e-sports.
The new Xbox Series X game console – just released on Nov. 10 - is receiving rave reviews in the gaming community and should provide MSFT with a massive amount of revenue as it’s virtually sold out everywhere. The only way to get one now is by paying a premium on eBay Inc. (NASDAQ: EBAY) or another second-market seller.
D.R. recommends beginning to take a position in MSFT now, and to continue buying shares on any pullback.
Who They Are: BlackRock Inc. (NYSE: BLK) is a company doing what you’re doing right now: investing. Except BlackRock does it on an astonishing scale with some of the best results in the world.
Its portfolio is so massive it’s actually larger than every economy in the world except for the United States and China. With a portfolio this size, you might think this means it grows slowly. But that couldn’t be further from reality.
In fact, Money Morning Chief Investment Strategist Shah Gilani calls BlackRock a “money-printing machine.” Even after a nearly 80% run-up over the last year, BlackRock pays a handsome 2.3% dividend yield. The average yield for the S&P 500 is a full percentage point less.
Why Now Is the Time to Buy: It’s a big-time dividend-payer in an uncertain world.
Even though the stock market has rallied back from the pandemic crash, there’s plenty of uncertainty around. Investors are nervous about inflation, rising interest rates, and the economy not fully recovering.
But a stock that can generate cash for your portfolio can add stability.
And you’ll have a hard time finding a better deal than BlackRock.
Consider this: While many companies, from Wells Fargo to General Motors, cut their dividends, BlackRock kept paying its throughout the pandemic economy. Go back a little further to the 2008 financial crisis, an even bigger disaster for Wall Street, and BlackRock didn’t budge its dividend.
This is a rock-solid company for uncertain times.
Why BLK Is a Buy: BlackRock Is the World’s Largest Investor
Investing is what you’re doing after all, so why not own the biggest and best investor of them all?
BlackRock owns some of the best companies in the world, including Apple, JPMorgan & Chase, and Exxon Mobil. Sure, you can go out on the market and buy these same stocks, but BlackRock owns enough it has seats on boards. That means it has a say in how the companies are run in ways individual investors can’t.
Even better, it invests in startups and helps take young companies public, something individual investors have a hard time doing on their own. BlackRock was one of the leaders behind the biggest foreign IPO since AliBaba when it helped Coupang, a Korean e-commerce firm, go public in March. That matters if you own BlackRock, because it is going to make decisions to improve its bottom line. That gives you exposure to some of the most exciting companies in the world while your friends have to wait and see.
It also owns iShares, some of the biggest ETFs on the market. Think about how popular investing has gotten during the pandemic – more than 10 million new brokerage accounts were opened last year. BlackRock is collecting fees on a big chunk of newcomers who are buying into their very first funds.
Lastly, BlackRock invests in everything else under the sun, from commodities to currencies to derivatives. If there’s a way to make money on something, Blackrock is doing it.
Why BLK Is a Buy: Artificial Intelligence Is Changing the Game
As Shah points out, “CEO Larry Fink changed the entire asset management model a few years ago.” That included using artificial intelligence and machine learning to hone its investing strategies.
It created the BlackRock Lab for Artificial Intelligence back in 2018 as a way to put serious resources behind this push. These tools are allowing it to use even more data in its investing decision-making, like using text analysis to measure market sentiment or to use web traffic to find future growth prospects.
Its asset management model costs it nearly nothing to run but brings in over $10 billion a year in fees. AI is only going to help streamline its management tools further.
In January 2021, BlackRock took a minority stake in Clarity AI, a data science company. The investment is a clear signal BlackRock is committed to using Big Data and machine learning to improve and create new investment management tools. BlackRock says its plans are to use Clarity AI’s technology to beef up Aladdin, its proprietary AI tool for investment pros.
Why BLK Is a Buy: BlackRock Is Taking On China
Far from being complacent, BlackRock is focusing on some of the fastest growing countries in the world, including China. Even if BlackRock had exhausted its potential in the United States, which it hasn’t, the opportunities available in China could still ignite its share price higher.
BlackRock is making investing in China possible for investors around the globe, where it offers advice and insight on investing in everything from Chinese bonds to the Hong Kong stock exchange. It's also offering a China-focused mutual fund.
But the real opportunity here is that BlackRock is starting to manage money for Chinese investors. In fact, it’s one of the very first foreign companies to get approval from the Chinese government to offer these services. While it first set up asset-management operations in China in 2017, it now has approval to manage money for any Chinese investor.
That opens up China’s 700 million person middle class to BlackRock’s investment management business. Remember, the entire population of the United States is half of that. That’s why BlackRock’s China venture is so enticing for investors like us.
Who They Are: Apple Inc. (NASDAQ: AAPL) is certainly a household name. It's also one of the favorite stocks of Money Morning Executive Editor Bill Patalon. Don’t let the size of the company fool you. Apple grew to become the first $2 trillion company in the world amid a global pandemic and economic recession. This isn’t a legacy stock coasting on its name.
Apple is best known for its tech devices, including the iPhone, Mac computer, iPad tablet, Apple Watch, AirPods, Apple TV, and Beats headphones. But the company is more than its devices. Apple is renowned for its Apple Care support services, digital content streaming services, cloud storage, and even the cashless payment service Apple Pay.
Founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne, the company is now run by one of the world's most recognizable execs, Tim Cook.
Why Now Is the Time to Buy: Because of Apple's long-term performance and reliability, Bill considers it one of his "Accumulate" stocks. That means it's a stock you can keep buying more of year after year to increase your wealth.
"The pioneer and perfector of the 'ecosystem' strategy, Apple sells more than just tech – it sells an end-to-end way of running your life – from work, to health, to communication, to entertainment," Bill said. "Apple's innovative array of devices, software, and services work together seamlessly, which has cemented its reputation for ease of use."
That ecosystem is also what powers its growth. Once a user adopts an Apple device, they are naturally encouraged to use Apple’s subscription services and add more Apple devices.
Why AAPL Is a Buy: It's More Than Its Devices
Apple is not just a device company anymore.
That is, it's not unit sales of Apple devices that are driving the company's growth. It's the services Apple delivers to the devices people already own.
Sales of those services, including Apple Music, iCloud, and the App Store, hit $13.35 billion in Q2 2020. They finished the year with $53.7 billion in revenue from services.
Overall, the company is expected to bring in an astronomical $315 billion in revenue in 2021. That's an increase of 11% from full-year 2020 numbers, which will include sales of the latest 5G iPhone 12 in Q4 2020. In 2022, revenue is expected to jump a conservative 8.5% to $342 billion.
Why AAPL Is a Buy: Apple's Sights Are Set on Healthcare
Growth estimates for Apple are healthy – but we see it as underestimating the profit potential here.
In 2019, Morgan Stanley (NYSE: MS) did a deep dive on Apple's healthcare opportunity. The investment bank concluded that healthcare could add anywhere from $15 billion to $313 billion annually to Apple's top line. The report pegged the midpoint at $90 billion of additional revenue by 2027.
Apple’s TTM revenue is $294 trillion. So, if the Morgan Stanley report is right, that represents a revenue increase of nearly 20% from healthcare alone.
And even though we've focused on "services" so far, Apple's devices are still an absolute cash cow…
Why AAPL Is a Buy: Device Sales Are Rock Solid
"The company's roster of devices has grown from the venerable Mac to the iPhone, the iPad, and the Apple Watch, while it has added lucrative services like the App Store, Apple Music, and the new Apple TV Plus streaming service," Bill said.
With 5G here, we are seeing a whole new "upgrade cycle" heading our way – especially as a coronavirus vaccine gets distributed.
Plus, Apple's hardware sales continue to expand the installed base of Apple users. In Q4 2019, the company said half the customers who bought a Mac were new to the platform.
Investors should expect this new customer conversion rate to remain similar in 2021 as the company began releasing new Macs with its own Apple M1 computer chips in November 2020. This will also increase profitability because the company will no longer need to purchase and install computer chips from Intel Corp. (NASDAQ: INTC).
The installed base matters because all those users – approximately 1 billion people own at least one Apple device – are also signing up for Apple's services. And that's where most of its revenue growth is coming from now.
That revenue growth has made Apple one of the richest companies in the world.
Not to mention, the company has a $191.8 billion war chest of cash on hand that it can use to dominate whatever market it wants next and pays investors a reliable 0.66% dividend.
Yes, stocks are a good addition to any investment portfolio. Over time, stocks can be the most successful way to build wealth.
Stocks typically offer higher returns than other investment vehicles, like real estate and bonds. We identify the factors that make stocks a good long-term wealth builder and give investors those picks regularly.
Trading stocks by trying to time the market for short-term gains is much riskier. It can be done successfully – and profitably – but if it's done without proper research and analysis, it often results in big losses.
One key step to pick the best stocks to buy is to examine a company's earnings reports over time to analyze the firm's financial health. The most important metrics to measure are earnings per share (EPS) and the price/earnings (P/E) ratio.
EPS is the portion of a firm's profit distributed to each share of stock. It's the most basic and important number for measuring a company's profitability, it and helps to calculate valuation metrics like the P/E ratio.
The P/E ratio shows how much investors can invest in a stock to recoup one dollar of earnings. In other words, it shows how much people will pay for every dollar a company earns. The ratio is calculated by dividing the most recent share price by the most recent EPS.
The stocks we mentioned here are a great place to get started. But if you're looking to expand your portfolio, keep up with Money Morning throughout the year.
We'll be offering expert recommendations periodically, and every few weeks, we publish a list of the best stocks to invest in right now based on the most up-to-date information available.
And if you're looking for more ways to profit, we've got you covered…
Money Morning's track record is impeccable.
The companies we've shared with our readers have climbed 146% in seven months, 161% in 12 months, and 288% in 10 months… and our longer plays have risen more than 600% and even 1,300%!
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Money Morning’s brand-new chief investment strategist is going live in his first-ever segment of BUY THIS, NOT THAT.
In 30 minutes or less, Shah Gilani is going to run through all 50-plus stocks you should know about – for better or for worse.
Shah is not holding back; prices, tickers, and company names will be coming your way fast.
Be ready to take notes! Watch now…
Coinbase's massive IPO means cryptocurrencies have "officially" arrived on Wall Street.
It's an extremely bullish development for Bitcoin, but... investors everywhere want to know about the exchange's stock itself - "Should I buy Coinbase?"
Here's what you need to know...
Microsoft Corp.
(NASDAQ: MSFT) is up 11.8% in the last two weeks.
Anyone holding shares got a nice pop.
But we’re seeing the early tremors of something much bigger ahead.
Microsoft stock has a couple catalysts on the way that could push the stock to $400 by the end of the year.
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It's unusual for an investor day to make much news.
But Nvidia's was a different thing altogether.
Nvidia stock is soaring now, and the biggest gains are still in the future.
Here's what has Wall Street so excited and why it's a buy now...
Shah Gilani’s never been more excited about the market and the growing number of opportunities for regular investors to build life-changing wealth.
It’s all thanks to mobile app-based investing and what he calls the “Fractional Shares Revolution.” And for folks in the know, there’s huge profit potential….
Coinbase went public at a $100 billion valuation.
What happens next? Our Coinbase stock price prediction will show you what's ahead for the exchange.
The Costco stock price has managed to recover from a recent sell-off.
The company prevailed even in the pandemic e-commerce wave.
But Costco stock still looks cheap today. If it's not yet obvious to you yet, it should be here...
Penn National stock shares took a 25% haircut over the last month.
That might look like a great opportunity to buy the dip on an exciting stock in an exciting industry.
But there's more to the story here.
And more risk.
In our latest Zillow stock forecast, Money Morning Defense and Tech Specialist Michael Robinson reveals a staggering price prediction for the stock.
In fact, his prediction is actually conservative.
The company is revolutionizing an industry that grew by $2.5 trillion in value in 2020.
Read all about what they're up to here...
One of the many changes we saw in 2020 was the flurry of new, inexperienced investors and traders into the market via mobile apps.
But they’re still a strong force in the markets, meaning there’s extreme moneymaking potential in their trading activities for folks who know how to play it.
Today, Tom’s using some of the volume and pricing data from this crowd to tee up an interesting profit play that experienced investors can get into for potential 100%-plus gains… .
After a weak March performance, stocks are roaring back.
Indeed, Chris has been saying all along that strong momentum and April seasonality will keep markets moving higher.
But there's one ETF that really stands out amongst all these bullish performers.
Buying it outright means double-digit profits, but trading options will probably double your money here if you move this week.
Here's the ticker... .
With the Dow above 33,500, the S&P 500 above 4,100, and the NASDAQ north of 13,800, it's no wonder you've been hearing Wall Street worrying about an impending bubble.
But Andrew's not worried about a bubble yet.
And once you realize what's actually happening and how easy it is to make money right now, you won't be, either....
Cathie Wood of ARK Investment Management is one of today’s savviest fund managers.
But she recently received some flak for making what Michael believes is one of her shrewdest investments yet in a sector likely to grow 300% to hit $82 billion in five years.
And what mainstream Wall Street is turning its nose up at could mean incredible profits for us….
Twitter is about to make some serious improvements to its product and that could make the stock a breakout candidate.
For years it seemed like the only update that Twitter made was giving you the ability to send out 280 characters.
But Twitter has turned the pandemic into opportunity and is launching a slew of initiatives that could send it soaring.
Here's what Twitter is up to and why it's a buy right now...
Infrastructure stocks have been all the rage this year and they're only going to get hotter now that a new $2.3 trillion spending bill is being pushed in Washington.
Investors have been snapping up the shares of infrastructure stocks for some time now.
But it's not too late to buy if you know where to look.
Here are the best infrastructure stocks to buy ahead of this massive new spending...
We see General Electric gaining some attention in recent weeks.
GE entered into a $30 billion agreement with AerCap to sell 54% of its aircraft leasing business.
In addition to 46% of the stock of AerCap, GE walks away with $24 billion in cash and about $1 billion in debt securities from AerCap.
The cash infusion is pushing many investors to ask whether they should buy GE stock. Let's see...
