5 Jul

3 steps I’d take today to find top stock picks for 2021

first_img Finding top stock picks for 2021 may seem like a tough task to some investors. The 2020 stock market crash and an uncertain economic outlook mean the prospects for many companies are difficult to work out.However, I would focus on companies with solid financial positions and wide economic moats when they trade at low prices.That way, it may be possible to unearth the best shares for 2021. They could produce the strongest performances over the long run.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Judging financial strength among potential top stock picksThe uncertain economic outlook means that today’s top stock picks may be those businesses with solid financial positions. They may be able to more easily overcome what could prove to be a tough period for many industries and regions over the coming months.Analysing a company’s financial position can be done by taking a look at its annual report and recent trading updates. They provide information on areas such as its debt levels, which is always important when weighing up an investment. They can also show how many times its operating profit covered interest costs and the amount of liquidity it has available. All of these areas can make a real difference to its ability to survive what could be a volatile 2021. They can impact how it is able use an uncertain period to its advantage in terms of making acquisitions and innovating.Analysing a company’s competitive positionTop stock picks for 2021 may also be those companies that can outperform their sector peers via a competitive advantage. For example, they may have a unique product, enjoy strong brand loyalty or have a lower cost base than rivals. This can make a real difference to their profitability both in difficult economic circumstances and when a period of strong growth takes place.Therefore, focusing on a company’s competitors could be a sound move. It may highlight the strengths and weaknesses of a business that are not always obvious. They may make an impact on how successful it proves to be from an investment perspective.Ensuring a margin of safety is obtainedAs ever, the top stock picks of today could prove to be those companies that trade at a large discount to their intrinsic values. In other words, their share prices currently undervalue their long-term financial prospects. This may provide them with greater scope to deliver capital appreciation over the coming years.Assessing a company’s value, in terms of metrics such as price-to-earnings (P/E) ratio and price-to-book (P/B) ratio, on a standalone and relative basis could be worthwhile. It may allow an investor to determine which companies in a specific sector offer the best value for money. They may be among the top performers in 2021 and beyond. And they could have the biggest positive impact on an investor’s portfolio. Enter Your Email Address 3 steps I’d take today to find top stock picks for 2021 I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Our 6 ‘Best Buys Now’ Shares Image source: Getty Images. Simply click below to discover how you can take advantage of this. See all posts by Peter Stephens Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Peter Stephens | Friday, 4th December, 2020 Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!last_img read more

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