In this edition of our monthly stock market analysis, we are going to look at the best shares to buy in January 2021 – with our analysis covering January 11th to January 18th.
There’s a lot of excitement moving into 2021 – with the S&P 500 once again at high-time highs. The FTSE 100 has been on a mini-rally of its own over the past week, which is great for those of you with a basket of UK stocks.
The main activity on our list of picks this week is the removal of Zoom shares – which appear to be running out of gas. Instead, we’ve opted to replace the video conferencing stock with Easyjet – which at current prices, looks a bargain.
- 1 Top 5 Shares to Buy Right Now
- 2 Best Shares January 11th – January 18th Update
- 3 Shares to Watch – January 11th to January 18th
- 4 Comprehensive List of the Best Shares
- 5 How to Buy the Best Shares Now
- 6 How to Analyse Which Shares to Buy
- 7 Best Shares to Buy Today – The Verdict?
- 8 eToro – Buy the Best Shares With No Commission
Before we take a closer look at January’s best shares, here are our top 5 picks:
You can buy all of these top shares, as well as many others, at eToro and pay 0% fees!
1. Pfizer – COVID-19 Vaccine Approved in Several Countries (HOLD)
January 11th – January 18th: Pfizer stockholders continue to enjoy gains – with the shares up 2.80% over the past 5 days. Pfizer stocks need to rise by a further 14% to get to their prior all-time highs of $43.08.
Pfizer shares climbed at the start of November on news that its COVID-19 vaccine was over 90% effective. Now, the pharmaceutical company has finished its late-stage trial and confirmed that its vaccine is 95% effective. While Pfizer fell slightly on news that Moderna’s competing mRNA vaccine could be stored in a refrigerator while Pfizer’s requires dry ice, Pfizer has a huge advantage since it will be the first to distribute a working COVID-19 vaccine in much of the world.
Better yet, Pfizer already has commitments from various governments for over 450 million doses. By the end of 2021, the company says it could produce as many as 1.3 billion doses globally. With the pandemic still raging across much of the world, demand for Pfizer’s vaccine will be high no matter what other pharmaceutical companies release in the coming months.
If the vaccine isn’t reason enough for you to like Pfizer shares, the company offers a very attractive 4.20% dividend yield.
2. Amazon – Unbeatable Returns in 2020 (HOLD)
January 11th – January 18th: There hasn’t been much stock price action of Amazon shares over the past week or so. The stocks were priced at $3,256 at the close of 2020 – and are worth $3,114 at the time of writing. That’s a decline of just over 4% since the start of the new year.
It will come as no surprise to learn that the vast majority of global stocks are down in 2020. However, this isn’t the case with Amazon – which continues to thrive. Crucially, not even a worldwide pandemic can stop the momentum with these shares.
Back at the start of the year, you would have paid just under $1,900 per Amazon stock. At the time of writing in October 2020, these very same shares are priced at just under $3,200. Put simply, had you made an investment at the start of the year and held on to the stocks throughout the pandemic, you would now be looking at gains of 68%.
It is somewhat difficult to envisage Amazon’s good fortunes ending any time soon. Not only is its core online retail business growing year-on-year, but it is involved in heaps of other innovative products and services. This includes its ever-growing Amazon Prime subscription model, as well as cutting-edge technologies like cloud computing and artificial intelligence.
3. Moderna – mRNA Vaccine Pioneer (HOLD)
January 11th – January 18th: With the Moderna COVID-19 vaccine now approved in several nations, the stocks continue to rise. Over the past 5 days alone the shares have gone from $113 to $117 – translating into weekly gains of 3.5%.
Moderna is right behind Pfizer in getting its COVID-19 vaccine out into the world. It announced that its vaccine is 94.5% effective and that it can be stored in a standard freezer for up to 30 days.
Like Pfizer, Moderna is also using mRNA technology that could fundamentally change the way the world approaches vaccination in the future. What’s especially exciting about Moderna is that the company has set its sights beyond the coronavirus pandemic. Moderna is already developing five vaccine candidates, five immuno-oncology candidates, four rare disease therapies, and two autoimmune disease inhibitors. While none of these treatments are proven, the fact that Moderna’s COVID-19 mRNA vaccine is effective bodes extremely well.
To be sure, the company is expensive. But it’s never going to be cheaper than it is now once mRNA technology gains widespread traction.
4. Paypoint- Super-Undervalued Stock Ready to Bounce-Back After Lockdown (HOLD)
January 11th – January 18th: Paypoint shares are yet to take off even after the announcement of the UK’s several approved vaccines. However, it goes without saying that this is because of the extended lockdown measures that have since been installed. As such, Paypoint shares are just over 2% down over the past 5 days. But, at current prices, the shares remain a hold.
Paypoint is the latest stock to make its way into our list of the best shares to buy right now. For those unaware, the technology company is behind the in-store payment services found in tens of thousands of UK locations.
This includes everything from retail and convenience stores, supermarkets, and petrol stations. The shares are listed on the London Stock Exchange with a current market capitalization of just £414 million. Make no mistake about it, Paypoint shares have been hammered this year as a result of the wider COV19 lockdowns.
This makes sense when you consider that the vast majority of its retail locations have been closed for months on end. In fact, with the stocks valued at over 1000p at the start of the year, Paypoint shares are now 40% at 600p. But, this exciting technology company was looking good before the virus came to fruition.
As such, there is no reason to believe that it will not get back to pre-COV19 levels when the lockdown restrictions are just a distant memory. If the shares do breach the 1000p-level, this would require an increase of over 65% based on current prices.
5. Apple – Superb Earnings Report for Q4 Fiscal Year (HOLD)
January 11th – January 18th: Apple stocks – much like many other leading tech shares, are have been pretty-much unmoved over the past week. The shares are down just 0.04% over the prior 5 days.
Apple was a new addition to our portfolio of stock picks in September 2020 – and it remains a hold. Much like the rest of the US tech scene, the firm has enjoyed a fruitful 2020. Lockdown or no lockdown – there appears to be no stopping this NASDAQ giant. This because evident in the firm’s recent earnings report – where it smashed through market expectations by some distance.
For example, year-on-year revenues were up 11% to just under $60 billion. 60% of this figure came from international sales. Even more impressively, earnings per share increased to $2.58, representing growth of 18%. In turn, Apple announced a dividend of $0.82 per share. The biggest news of the quarter is that Apple executed a 4-for-1 stock split.
This means that shareholders are now in possession of four times the number of shares they had prior to the split. In terms of its stock price performance, Apple started the year at $75 per share (taking into account the split). On September 1st 2020, the shares were priced at just over $134. This represents a year-to-date increase of 78%. As per its recent earnings report, there is no reason to believe that the upward swing will end any time soon.
6. Tesla – Catch This Growing Company While you Still can (HOLD)
January 11th – January 18th: Even though Tesla shares lost almost 8% in value in the prior 24 hours of writing this article, the stocks are still 12% up over the past 5 days. Volatility on Tesla stocks remains high, albeit, investor appetite continues to rise.
This company is one for the long run. Tesla – the US-based manufacturer of electric cars, is arguably just at the start of its corporate journey. Had you bought Tesla shares five years prior to this article, you would have paid just $262 per share.
Fast forward to December 2020 and the same shares were priced at $718 each (after a 5-to-1 stock split – so the shares are really worth $3,590 apiece). This translates to a market capitalization of $668 billion. In fact, Tesla shares gained a truly incredible 743% in 2020.
This bullish sentiment is further amplified when you consider the other ventures that Tesla is behind – all of which centre of renewable, sustainable, and cutting-edge technologies. At the forefront of this is solar renewable solutions – which is likely to dominate the consumer energy industry in the very near future.
7. Easyjet – At Current Prices This Stock is Too Cheap to Turn Down (New Buy)
We don’t need to tell you that airline stocks have been hit especially hard over the past 12 months. Crucially, global travel restrictions remain in place across most regions – so passenger numbers are still at just a fraction of pre-pandemic levels.
In turn, not only have the value of airline stocks nosedived over the past year but the risks of investing have never been higher. With that being said, if you have a slightly higher appetite for risk and you are looking to target larger financial returns, Easyjet looks like the best pick of a bunch from the airline scene.
First and foremost, at current prices of 803p per share, the upside potential is huge. If we were to take the pre-pandemic price of 1,500p as the medium-to-long term target, this would require an upward movement of 86%. Secondly, it is important to remember that Easyjet share saw growth of 60% in the 7 months before airline stocks capitulated. This means that the firm was enjoying a successful period of activity – interrupted only by the wider impact of global travel restrictions.
On the other hand, much like any other airline stock, Easyjet shares are far from guaranteed to get back to pre-COVID levels. After all, it’s burning through cash at a rapid rate and in November 2020, reported a huge loss of £1.3 billion. The good news for concerned stockholders is that the airline has since secured over £3 billion in liquidity. It is hoped that this will be sufficient to see Easyjet throughout these turbulent times.
8. Cineworld – Vaccine Approval is Huge New for This Cheap Stock (Hold)
January 11th – January 18th: Cineworld shares have been overly volatile recently – with the markets still undecided what the future holds. For example, the shares enjoyed a 16% increase in the first few days of last week. But, over the prior 24 hours, the shares have dropped by over 6%. At current prices, Cineworld shares remain a hold.
If you’ve been keeping track of our weekly stock market analysis for some time now, then you’ll know that Cineworld Group is in and out of our portfolio like a yo-yo.
Crucially, this is because of the UK’s lockdown strategy that has changed consistently over the past 6 months. With that said, the Pfizer vaccine approval means that Cineworld cinemas will once again reopen its doors. When remains to be seen – but it is no longer a case of ‘if’.
Now, it is no secret that Cineworld was heavily impacted by the pandemic shutdown, and thus – its shares have completely capitulated in 2020.
Starting off 2020 at 220p each, Cineworld shares have since hit lows of just 15p. This translates into a stock price decline of 93% – meaning a £1,000 investment would have left you with just £70. Crucially, the vaccine approval now means that the shares are back on the up – and quickly.
The shares are now trading at 64p. At this price level, you can still get yourself a huge bargain – especially considering the 220p valuation the shares held just 11 months ago. If Cineworld is able to get back to pre-pandemic levels, this would require growth of 185%.
9. British American Tobacco – Best UK Dividend Stock to Buy (HOLD)
January 11th – January 18th: There hasn’t been much stock price action with British American Tobacco over the prior 5 days, with the share up by just under 1%.
British American Tobacco (BAT) is a major player in the global tobacco industry – with brands such as Pall Mall, Dunhill, and Lucky Strike leading the way. Although the UK powerhouse has enjoyed a fruitful time on the London Stock Exchange – subsequently rewarding shareholders for many, many decades, its fortunes reversed in 2017.
With an all-time high of 5,383p being hit in June of the same year, the stocks tumbled to 2,541p in 2019. However, not only have the stocks since stabilized – but the company is paying one of the largest dividends in the UK shares space. In its most recent distribution, this worked out at a yield of 7.2%. In fact, BAT has increased its dividend payment for 20 years in a row – even during the somewhat bearish years of 2017-2019.
With that in mind, BAT could be a good addition to your stock portfolio for two reasons. Firstly, you have the chance to buy the shares on the cheap at current prices of sub-3,000p. Secondly, you will be buying shares in a company that has a long-standing track record of paying generous dividend yields.
10. Facebook – No Dividends, but Huge Upside Potential (HOLD)
January 11th – January 18th: Facebook shares are down 4.4% over the prior 5 days. This remains a long-term hold for us, so we’re not too concerned with short-term volatility.
Although you have missed the boat on Facebook – at least in terms of its initial stock market price, it’s still not too late to obtain its shares at an attractive price.
The company has grown to exponential heights since its public launch in 2013 – and while the social media giant has had its fair share of privacy-related scandals, the future looks bright. Crucially, Facebook now boasts an impressive 2.6 billion monthly active users – which is up 11% from the prior 12 months.
With this in mind, its current market capitalization of $651 billion is potentially still just a fraction of what it could be worth in years to come. On the flip side, Facebook is yet to pay any dividends to shareholders, but this could something the company looks at in the near future.
The market is focused on vaccine distribution and the renewed lockdown in the UK. Domestic stocks have been under particularly strong pressure thanks to the announcement of a deal with Europe for Brexit. However, analysts are still puzzling out what the deal means for the long-term stability of UK stocks, and there could be a stronger reaction after the holidays.
Moving into the new year, expect a lot of trading activity. There was a lot of news in recent days and we expect traders to be eager to get back to their desks.
Let’s recap as to how to markets have performed over the past 24 hours.
- FTSE 100: -1.09%
- FTSE AIM All-Share Index: -1.11%
- S&P 500: –0.26%
- NASDAQ 100: –1.25%
- Dow Jones: –0.29%
The following shares didn’t quite make the cut this week – but are most definitely worth keeping an eye on over the next 7 days.
- Intel Corp: Shares rebounded nicely after falling 10% in response to worse-than-expected earnings. Look for restructuring news to boost Intel’s shares in the medium-term.
- American Express: Another major US stock that failed to meet market expectations in its most recent earnings report. The share price is already climbing again, but this could still be an opportunity to buy the dip.
- SVB Financial Group: SVB Financial Group is a commercial bank that specializes in tech-related financing. With another great quarterly performance as per its Q3 earnings report, the shares are up 2.3% over the past week. We’re not too sure yet whether or not this upward swing will be short-lived or if it’s a sign for greater things to come. As such, this is one to keep an eye on.
While there are many different types of shares out there, there are also thousands of different company shares from around the world that you can invest in. Different shares of companies come in all shapes and sizes, so it’s important to do your research and ensure you invest in the companies that best match your portfolio. Let’s take a look at some of the most popular companies to invest in in the UK.
We’ve already covered the top 10 shares to invest in right now, but there are many more worth considering. Check out our comprehensive list of the best shares below
- American Airlines
- Aston Martin
- Beyond Meat
- British Airways
- Dart Group
- Eaton Vance
- Galliford Try
- General Electric
- Johnson & Johnson
- Legal and General
- Metro Bank
- Micron Technology
- National Grid
- Rocket Companies
- Rolls Royce
- Royal Mail
- Standard Life Aberdeen
- Taylor Wimpey
- Travis Perkins
- Virgin Galactic
- You can buy shares without paying a single penny in commissions
- You can buy shares from just $50 (about £40) per trade
- You can easily deposit funds with a debit/credit card, UK bank account, or e-wallet
- The platform is tailored to those with little to no experience of buying shares online
- The platform is regulated by the FCA
Here what you need to do to buy shares from eToro:
Step 1: Open an Account
First and foremost, head over to the eToro website and elect to open an account. You will now be asked to enter some personal information – such as your full name, home address, date of birth, and contact details, You’ll also need to choose a username and a strong password.
Step 2: Upload ID
On top of the Financial Conduct Authority (FCA), eToro is also regulated by ASIC (Australia) and CySEC (Cyprus). As such, it is required to identify each and every user that opens an account. All you need to do is upload a copy of your UK passport or driver’s license, followed by a utility bill or bank account statement.
Step 3: Deposit Funds
You will now be asked to deposit some funds. eToro accepts a variety of UK payment methods, including:
- Debit Card
- Credit Card
- UK Bank Transfer
You will need to meet a minimum deposit amount of $200 (about £160). Your GBP deposit will be converted to USD (0.5% conversion fee), as this allows you to access both UK and international markets at the click of a button.
Step 4: Buy Shares
Once your account has been funded, you can then buy your chosen shares. If you know which of the above companies you wish to buy shares in, simply enter it into the search box at the top of the screen, and then click on the ‘TRADE’ button. In our example, we are looking to buy BP shares.
You will then see an order box that asks you to enter the amount that you wish to buy. This is in US dollars and not the number of individual shares. As we noted earlier, you can buy from just $50 (£40) worth of shares at eToro, so there is no requirement to buy a whole stock.
Finally, click on the ‘OPEN TRADE’ button to complete the share investment process!
If you are just starting out in the world of stocks and shares, it’s super-important that you learn the ins and outs of how to perform your own research – as opposed to choosing companies on the back of somebody else’s advice. In doing so, you stand the best chance possible of ascertaining whether or not the shares represent a viable long-term investment.
You can read more on How to Pick Stocks and Shares here.
As you’ll see from our list of the best shares to buy in January 2021 – most of our portfolio consists of US stocks. This is for good reason – with the likes of Pfizer, Moderna, Tesla, Apple, and Amazon smashing through the uncertainties of the coronavirus pandemic.
Over in the UK, very few FTSE 100 shares are worth more than pre-pandemic levels. In fact, the FTSE 100 Index itself is still down for the year. Nevertheless, we are still super-keen on British American Tobacco for its strong and stable characteristics. We are also keen on Cineworld – as per the Pfizer vaccine approval announced in the UK.
The latest UK addition to our portfolio is that of Easyjet. Sure, the wider airline industry is fraught with risk at present. But, at current prices, Easyjet looks too cheap to turn down.
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