January was pretty wild, and the rest of the year won’t necessarily be tame. But even if the major market indices had closed essentially flat for the first month of 2021, you’d be in great shape for the rest of the year if you had picked the right stocks.
Axon Enterprises (NASDAQ:AXON), Zoom (NASDAQ:ZM), Wingstop (NASDAQ:WING), Sleep Number (NASDAQ:SNBR), and fuboTV (NYSE:FUBO) have all kicked off 2021 on the right foot. They all posted double-digit percentage gains in January, and I think they’re just getting started.
I own all five of these stocks. Let’s check out the reasons why you may want to consider buying them, too.
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One of my hottest stocks so far this year, Axon soared 42% in January. The company’s product catalog covers cameras, energy weapons, and software that help law enforcement, but every layer here is bigger than you think. Let’s start with the namesake cameras. Axon body cameras have become the hardware of choice for police officers and other folks in law enforcement.
Recording confrontations is a pretty big deal these days. The public wants to know how arrests happen and when law enforcement crosses the line. Axon cameras preserve the truth — and that brings us to the software component of the model. The company just happens to own Evidence.com, the cloud platform of choice for the storage of recorded arrest, patrolling, and confrontation video footage, and also makes the ubiquitous Taser line of stun guns.
It all adds up to monster growth. The past few months have been far from tame for law enforcement, as you probably know, but Axon isn’t just a play on the groundswell for protests that have been sparked by social and political unrest. Revenue growth has clocked in at 20% or better for six consecutive years.
History may look back on 2020 as the year of Zoom, but there’s more than meets the eye to the videoconferencing poster child that was nearly a five-bagger last year. Zoom stock soared better than sevenfold through the first 11 months of 2020, only to shed nearly 30% of its value in December as COVID-19 vaccines started hitting the market.
Zoom is resuming its winning ways in 2021, and it’s easy to see why — the company isn’t going away. There will probably always be a virtual element to schooling, and companies are realizing that you can save on business trips and make better use of employee time with an online conference room or meeting space.
The video-conferencing giant has also become a more convenient way to check in on family and friends. It was one of last year’s most explosive stocks in terms of growth and shareholder gains, but all it did was accelerate its evolution to the point where it’s become essential. Beating the pandemic is great for all of us, of course, but Zoom isn’t going away in the next new normal.
Chicken wings are life to a lot of people, and Wingstop has come through with one of the more 2020-resistant businesses in the restaurant industry. The chain of more than 1,500 small-box locations sells wings, tenders, and fries, largely to folks on the go. A whopping 80% of its sales are off-premise purchases through takeout or delivery, and that helped it excel during the early stages of the pandemic when more conventional chains were sputtering.
Comps rose 32% in its fiscal second quarter when most concepts were posting double-digit percentage declines. It followed that up with a 25% year-over-year increase in the third quarter. It should deliver another strong report in two weeks.
The company is thriving in the new normal with its strong digital game, but it was a rock star before last year’s tumultuous ways. Wingstop has served up 16 consecutive fiscal years with positive comps, and in two weeks, it will stretch that to 17 years.
Spending a lot more time at home than usual in 2020 is making us appreciate the creature comforts of home. Your day begins and ends on your bed, so why wouldn’t that be the focal point of folks stepping up their lifestyles? Sleep Number’s unique product — a premium air-chambered mattress that adjusts to one’s firmness preference — is taking off these days. There was a one-quarter setback last year when the pandemic initially hit, but the company’s back to posting double-digit top-line growth.
Sleep Number has a game changer on its hands. The Sleep Number 360 — billed as the industry’s first smart bed — actively monitors sleep patterns. It adjusts the firmness to optimize sleep, and higher-end models even can move the incline higher or lower if it senses sleeplessness or snoring. With sales rebounding quickly and Sleep Number targeting 48% bottom-line growth for all of 2020, the shares can still be had for less than 25 times forward earnings.
There are a lot of people betting against fuboTV, but that’s not necessarily a bad thing these days. There’s nothing wrong with a little skepticism if you’re buying into growing companies, and fuboTV certainly fits the bill. The “sports first” live-TV streaming platform saw its subscriber base soar from 316,000 to 545,000 last year, and its already heady growth is accelerating.
Revenue rose 71% in the third quarter, and preliminary financial results translate to 77% to 83% top-line growth for the fourth quarter, which the company will make official later this month. The comparisons will get even easier in the coming months as fuboTV stacks up against last year at this time when it suffered a net decline in subscribers, with sporting events postponed in light of the global pandemic.
FuboTV is effectively monetizing its growing and captive audience through premium subscriptions and healthy ad revenue. This is a cutthroat market, but fuboTV is hoping to differentiate itself through fantasy sports offerings that it will roll out this summer and more lucrative gambling ambitions later in 2021.