My 2021 best stocks to buy list: 2 to consider

Jabran Khan details two logistics-related stocks on his watchlist for 2021 amid a possible stock market rally.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I believe the stock market could rally in 2021. With that in mind, here are two stocks from my watchlist for 2021 that I believe can offer good returns.

Best stocks to buy now #1

FTSE 250 incumbent Tritax Big Box (LSE:BBOX) is my first pick. BBOX is a real estate investment trust (REIT). It invests in and funds pre-let development of logistics facilities and real estate. I like BBOX for 2021 and beyond. Firstly, logistics is a thriving market right now due to the boom in online ordering, e-commerce, and e-fulfilment. Secondly, property stocks have enjoyed an upward boost recently due to vaccine development and a somewhat amicable conclusion to Brexit negotiations.

BBOX was established and profit-making prior to the pandemic. This is another reason I place it in my best shares to buy category. Its most recent results in October covering the third quarter made for positive reading with high expectations for the fourth quarter and full-year results too.

Despite reaching its highest ever price right now, I think Tritax shares are still reasonably priced. After the market crash, shares were trading for just 105p per share. As I write this, I would pay 186p per share, which is a 78% increase. I believe this is an indicator of how well BBOX has navigated the downturn. 

Best stocks to buy now #2

Small-cap growth share Clipper Logistics (LSE:CLG) is my next pick. CLG is a logistics firm that focuses primarily on the retail sector. Its client base includes ASOS, Asda, British American Tobacco, and many more. The changing face of retail has benefitted CLG as many retailers have had to adopt a stronger online presence in the face of the restrictions. Behind the slick websites and applications are the logistics and e-fulfilment services.

CLG was profit-making and performing well prior to the pandemic. Since the pandemic, however, CLG’s business has exploded. In August, full-year results until 30 April 2020 made for good reading, with increases in profit and revenue. This was before the long months ahead of restrictions began. A first half-year trading update reported a revenue increase of nearly 30% compared to the same period last year. In the most recent trading update released at the beginning of January, CLG reported increases in revenue in its logistics business of 50% for the months of November and December compared to the same period last year. I believe these positive results will continue in 2021 and beyond.

CLG is currently trading at 568p per share. This is an astonishing 320% increase from the market crash low of 135p per share in March. I see its share price increasing further as the retail sector adapts to changing shopping habits amid a global pandemic with restrictions. With some really promising results, an impressive client base, CLG is not far off the top of my best stocks to buy now list for 2021.

My verdict

I believe 2021 could be a good year for BBOX and CLG. I see the logistics sector continuing to grow exponentially. I believe this will be the case no matter what happens to the broader economy. Here is another stock I really like right now too. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jabran Khan has no position in any shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young Asian woman holding a cup of takeaway coffee and folders containing paperwork, on her way into the office
Investing Articles

How I could make a 10% yield for high passive income a reality

Jon Smith explains how he can target high passive income from top-yielding stocks, including one specific example he'd consider.

Read more »

Investing Articles

I’d buy 1,784 shares of this FTSE 100 stock to target £350 of monthly passive income

Muhammad Cheema takes a look at how British American Tobacco shares, with a dividend yield of 10.1%, can generate a…

Read more »

White female supervisor working at an oil rig
Investing Articles

1 ex-FTSE 100 stock that I think will get promoted soon

Jon Smith flags up an energy stock that used to be in the FTSE 100 and currently has strong momentum…

Read more »

Shot of a young Black woman doing some paperwork in a modern office
Investing Articles

With an 8% dividend yield, I think this undervalued FTSE stock is a no-brainer buy

With an impressive yield and good track record of payments, Mark David Hartley is considering adding this promising FTSE share…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

£9,500 in savings? Here’s how I’d try to turn that into £1,809 a month of passive income

Investing a relatively small amount into high-yielding stocks and reinvesting the dividends paid can generate significant passive income over time.

Read more »

Businesswoman analyses profitability of working company with digital virtual screen
Investing Articles

Dividend star Legal & General’s share price is still marked down, so should I buy more?

Legal & General’s share price looks very undervalued against its peers. But it pays an 8%+ dividend yield, and has…

Read more »

Investing Articles

Dividend shares: 1 FTSE 100 stock to consider buying for chunky shareholder income

This company’s ‘clean’ dividend record looks attractive to me and I’d consider buying some of the shares to hold long…

Read more »

Investing Articles

3 of my top FTSE 250 stocks to consider buying before April

Buying undervalued UK shares can be a great way to generate long-term wealth. Here, Royston Wild reveals a handful on…

Read more »