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.
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.
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.