3 stocks that shined in 2020 (and how they could help you profit in 2021)

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If you were to ask any investor last year what the general trend of their investments returns were like, it would be compared to that of a roller coaster ride.

One that has tested abilities to remain true to our positions, in what originally seemed to be a series of never ending ‘red days’.

This is then further accentuated by human nature and our tendencies to question our rationale behind our portfolios.

Yet in the context of panic selling, the shutting down of economies and doubts of a cure in the near future, a handful of stocks have consistently risen.

Now of course the Federal Reserve’s stimulus, economies reopening and new market highs- at least in the latter stages of the year- all played their role in aiding stock prices.

That being said, these stocks have routinely produced healthy returns to their investors in a market where extreme volatility has somewhat been the norm.

Therefore I’m suggesting that these companies themselves were the main drivers of the stock price and not so much the factors stated.

A case could even be made for some of these companies, that they may have been more prosperous if it wasn’t for the return to normalcy, but that’s another story.

For now, here’s my list of stocks that shined this year and at the bear minimum, would have returned you just over 300% had you invested in January.

 

Zoom

Voted recently as Yahoo Finance’s company of the year, Zoom is a American communications technology company, specialising in video conferences.

Based in the cloud, Zoom allows individuals and businesses to interact with one another when meeting in person is not possible.

Therefore Zoom was positioned perfectly to take advantage of the pandemic whereby social distancing and the closure of businesses limited interaction.

By taking these conversations online, you were then aligned with advice given by healthcare professionals and in some countries, the temporary laws of governments.

As a result of being a remedy to these problems, Zoom saw a world wide adoption.

This is in spite of the fact it was originally designed to cater to businesses, not me and you on an eventless friday night.

Translating this adoption into numbers you’ll find that the companies year over year revenue growth increased by 367%.

In the eyes of the stock market and investors, this progression has warranted an increase in the stock price by just under 500% (at the time of writing) from January.

 

Tesla

If you have no idea who Tesla is, then I’m afraid you have been living under a rock.

Founded by the genius that is Elon Musk, Tesla in short, is a clean energy company whose primary focus is electric vehicles.

It’s perhaps the odd one out on the list in that it’s rise in stock price was not directly accentuated by the pandemic.

Rather years of building infrastructure, bringing down costs and optimising performance has started to gain the recognition it deserved last year.

It can be easy to forget that Tesla has been a publicly traded company for over a decade and it’s only just started to gain ‘mainstream popularity’.

I’d also like to think that Tesla’s increase in stock price represented the beginning of the transition between the old world (fossil fuels) and the new world (electric, solar etc).

Thanks to Tesla’s forward thinking, they are now well situated in both the battery and electric car industries for this worldwide awakening.

Tesla investors have had plenty to rant and rave about this year with it’s inclusion into the S&P 500, the building of Berlin’s gigafactory and a record number of deliveries.

All of these achievements, despite the pandemic and it’s shockwave effect on businesses, is truly a sign of a strong company.

Strong companies make lucrative investments and Tesla is no exception, returning investors almost 650% if you were to have bought stock in January.

 

Fiverr

Startling statistics have been released over the course of this year just gone by governments in regards to unemployment rates.

Did you know that in the heights of the pandemic, according to the Washington post, the US unemployment rate reached 22 million people.

With so many physical jobs lost, the focus for many individuals around the world was to turn to the internet to make money.

This event, although devastating for people like you and me, posed as the ideal conditions for the growth of freelance platforms like Fiverr.

Accommodating both skilled and unskilled individuals, Fiverr acts as the ‘middle man’ between buyers and sellers.

As you can imagine, it’s user base grew exponentially, year over year profits increased by 88% and investors in Fiverr were left feeling smug.

Investment in this stock at the start of January would have meant you were over 770% up.

 

How They Could Help You Profit In 2021

Now the point of this article wasn’t just to point and say hey, look how successful these companies were last year, consider investing in them this year.

After all you should copy what’s successful, right?

Not necessarily, although these stocks were strong last year and I have reason to believe they will be this year, it wasn’t the point I was trying to convey.

The idea was to make you think more so about the positioning of certain companies and whether or not they synergise with the current financial climate.

This, in conjunction with the disruptive innovation ideology coined by Cathie Wood, seems to be the winning formula for finding lucrative investments in today’s forward-thinking market.

 

Conclusion

Although last year was a rollercoaster ride, some companies have prospered in these difficult market conditions.

This goes to show the value in doing your research into a company because it certainly pays in the long run.

You should also never be afraid to alter your portfolio to merge in nicely with the financial landscape.

Did these companies gain traction due to luck, good positioning in the market, a strong investor base, a bit of everything?

No one truly knows.

But what we do know is strong background research, the correct mindset and calculated risks put us in the best possible position to profit from companies like these.

By Dan Waterman

 

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