The Dow Jones Industrial Average and the S&P 500 reported gains last month as the United States demonstrated that it is capable of executing a swift and sustainable recovery overshadowing inflation concerns previously raised by Treasury Secretary Janet Yellen. Investors should take advantage of the macroeconomic environment and the potential for rapid economic recovery by investing in the stock market now.
Stocks to Buy Now
Robinhood penny stocks are still trending, with retail investors as active as ever. These stocks, however, are notoriously volatile. With investors constantly debating which stocks to buy, the following Robinhood stocks have the potential to outperform.
Apple (NASDAQ: AAPL), headquartered in Cupertino, California, is a market leader in personal computers and consumer electronic products. It was established in 1977 and has a market cap of about $2.2 trillion.
Apple Stock Price
Apple’s stock price closed at $125.28 on the 28th of May. Its P/E ratio in 2020 was 37.99 while its forecasted P/E ratio in 2021 is 24.43 as per the Nasdaq website.
Apple Stock Forecast
The coronavirus pandemic has turned out to be a godsend for Big Tech. The pandemic’s ramifications have caused millions to work remotely, reviving interest in the company’s legacy products. The iPhone is the company’s primary profit generator, accounting for 56% of revenue in the first two quarters. During the last six months, sales of Mac increased by 42% while the sales of the iPad increased by 57% YOY. In addition, the company has continued to innovate by introducing new products and services.
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Apple Pay, Apple News, Apple Card, Apple Music, and Apple TV+ are among the services available, accounting for 16% of total revenue.
Apple’s earnings have helped it to bolster its P/E ratio to nearly 30. This is a significant improvement for a company that was unable to break the P/E multiple of 20 in the previous decade. The company’s valuation has risen, allowing it to compete with Alphabet and Microsoft. Its ability to continuously innovate while maintaining sound financials makes it an excellent investment even through fractional share purchase.
Pfizer (NASDAQ: PFE), headquartered in New York City, is among the biggest pharmaceuticals across the globe with nearly $50 billion in annual revenues. Pfizer also invests almost $8 billion annually in research and development. Pfizer was involved in the sale of multiple chemicals and healthcare products but now mostly deals with vaccines and prescription medication.
Pfizer Stock Price
Pfizer’s stock price closed at $38.65 on the 28th of May. Its P/E ratio in 2020 was 17.45 while its forecasted P/E ratio in 2021 is 10.5 as per the Nasdaq website.
Pfizer Stock Forecast
During recent years, Pfizer has been trending because of its partnership with BioNTech to supply the much needed Covid 19 vaccines. As a result, the company was able to secure a 1.8 billion-vaccine order from the European Union. This performance has increased Pfizer’s stock price by 16%, and the company expects to generate $26 billion in revenue in 2021.
Pfizer’s forward P/E ratio was just 13 last year, indicating that the company was trading at a lower valuation. Experts predict that Pfizer’s earnings per share (EPS) will be $3.68 this year, potentially boosting the company’s stock price by 20% to $48. The company also has a 3.84% dividend yield. The company’s current performance and potential, as discussed, make this a good investment for traders by buying full share or buying a fraction of the share.
SkyWest Inc (NASDAQ: SKYW) is a commercial airline headquartered in Utah, USA. Currently, the company’s services are available in the United States, Mexico, the Caribbean, and Canada. In general, the company operates regional flights and carries passengers who have purchased tickets from major airlines.
SkyWest Stock Price
SkyWest’s stock price closed at $49.03 on the 28th of May. Its P/E ratio in 2020 was -288.41 while its forecasted P/E ratio in 2021 is 25.4 as per the Nasdaq website.
SkyWest Stock Forecast
Because of national lockdowns and fear of travel, the pandemic has had the greatest impact on the hospitality industry. SkyWest, on the other hand, has performed exceptionally, as it nearly broke even in 2020 and is now profitable. The company has done well because it generates most of its revenue from fixed contracts with large carriers such as United Airlines. Fuel costs and a fixed reimbursement fee are levied against airlines under these contracts. In the first quarter, it reported earnings of $0.71 per share.
Analysts predict that by the fourth quarter, travel will have returned to pre-pandemic levels. SkyWest could even reach pre-pandemic flight volumes by the third quarter, as many airlines are already reporting adequate demand due to summer vacations. In addition, the company has a contract with Alaska Airlines to supply eight planes. It is currently trading at a lower valuation in light of its low-risk business model and long-term potential. It is trading nearly 24% below its price at the start of 2020 making it a bargain for investors.
The Bottom Line
Traders were on the fence in May, unsure whether to invest due to the crypto currency crackdown, rising inflation fears, and the possibility of another coronavirus outbreak. However, the country has performed well and has demonstrated its ability to recover quickly, making June the best month for investors to enter the stock market.
Disclosure: I own all the above stocks