5 STOCKS THAT COULD DOUBLE IN 2021
Investment strategies are necessary for any good investor. Without a good strategy you will become a victim of your emotions which will causes you to buy and sell shares based on fear and greed instead of making rationale decisions.
One strategy many value investors swear by includes “buying the dip”. This refers to buying stocks when the market is pulling back with the expectation that a stock has become oversold and will begin to rise again. Warren Buffet is a famous believer in buying the dip, often preferring to avoid stocks that trade close to their all time high. Like Warren Buffet, I also prefer to buy stocks at a discount in order to secure a better margin of safety.
Right now I see numerous opportunities in the stock market. Below I outline 5 stocks that I believe represent great long term investment opportunities and I've drawn some clear lines of support across their charts to show how they each provide a very good margin of safety.
1) GW PHARMA
GW is a cannabis company that carries a lot less risk than it's peers. Unlike almost every other company in this industry, GW is profitable thanks to its FDA approved cannabinoid which is used to treat conditions including epilepsy. The company is currently expanding the use of this drug on conditions including autism, schizophrenia and multiple sclerosis. Therefore, I believe that there will be a lot of good news for GW in the near future and right now the stock offers a good margin safety given it's trading at a 5 year support level.
After being put to the sword by the effects of the coronavirus, Easyjet trades almost 75% lower than it's all time high. However, looking at this years chart for the stock, it seems as though Easyjet has found a bottom! The stock undoubetedly carries a lot of risk given that we dont know when travel will return to normal however, if Easyjet can survive the next 6 months then I believe that this high dividend paying stock can 1 day return to it's all time high... 400% higher than where it currently trades!
3) TENCENT MUSIC
Tencent Music (TME) is not only the leading music streaming company in China, TME also owns a 7% stake in European giant Spotify! The company trades at the same EV/R (a more accurate form of price to sales ratio) as Spotify yet the Chinese giant is growing quicker on many metrics and is already profitable!
Another good sign for the stock is that 5 more hedge funds added TME to their portfolio last quarter taking the tally from 25 to 30 and setting a new record for the stock. The yearly chart shows that $14 has been an important number for the stock and right now it's trading above that key figure. I believe that $14 will hold as support and the stock will bounce higher from this level.
Pioneer in the rapidly growing "insurtech" industry. Although, not yet earning a profit - Lemonade stock is trading at a lower price to sales ratio (35) versus other unprofitable growth stocks including Snowflake (185), Shopify (54) & Crowdstrike (44). Despite this, Lemonade's revenue is growing faster than all of these comparable companies whilst their user base continues to rise 80-100% annually.
The stock has fallen 25% this week after Credit Suisse & Goldman Sachs voiced their concerns about the companies ability to turn a profit. The stock is now approaching a near term trendline and there's a good chance that it will find support here.
5) CARA THERAPEUTICS
Cara therapeutics is a promising biotech start up and the creator of a leading new generation kidney disease treatment. Although its most promising candidate is still going through trials, Cara can expect their revenues to increase by 30x over the next few years if they are successful. The stock has had a mixed quarter and has now retreated to a well tested support level that has stopped Cara from going lower over the past 4 years!
Therefore, the stock offers a good margin of safety at this level and it could move a lot higher if there is good news regarding their trials.
From the charts above, you can see that these stocks are trading close to tried and tested support levels and that's why I believe they all carry a margin safety and represent excellent investment opportunities. Not only do these stocks provide a low level of risk given their chart patterns, they are each at the heart of fast growing industries! That said, it's important to remember that past performance is not always an indicator of future performance.
#tradeinplaces #trading #trade #learntotrade #tradingtips #etoro #finance #travel #travelblog #travelling #stocks #stockmarket #beststocks #stockpicks #stocks2020 #investing #investor #investment #investingtips #learntoinvest #google #uber #netflix #howtoinvest #getrich #china #tencent #lemonade #cara #therapeutics #canopy #editas #ballard #gw #stocks2021 #cryptocurrency #bitcoin #ethereum #xrp