The Top 6 Blue Chip
Stocks for 2021

Louis Navellier here. To say that 2020 was an outlier is an obvious understatement. In my 30+ years of investing, 2020 was unique.

The pandemic forced governments around the world to take unprecedented measures in response, including shutdowns of businesses, trillions in financial stimulus and an enormous push to safeguard public health. Scientists are currently rolling out different COVID-19 vaccines in a history-making push to inoculate the world’s population.

After suffering steep losses earlier in the year, the good news is that the stock market has rebounded.

We’re seeing signs that a V-shaped economic recovery remains well underway, with GDP roaring back, improved productivity, retail sales beating expectations in most categories, home sales surging and imported goods returning to pre-pandemic levels, which is a sign of healthy consumer spending.

There was a lot of uncertainty surrounding the presidential election, but Wall Street bounced back quickly after it was made clear that there would continue to be gridlock between the Senate and House.

I want to draw your attention to another key factor to keep a close eye on: interest rates. In order to support the economy, the Federal Reserve has said it will maintain near-zero interest rates through 2023. Personally, I wouldn’t be surprised if ultralow interest rates persist for the rest of my lifetime.

Still, the 10-year Treasury ticked higher lately, reaching over 1.6%. Recent bid-to-cover ratios on the Treasury bond auctions have improved, however, so I think we’ve probably seen a peak, near-term, in interest rates.

Overall, low interest rates will drive yield-hungry investors back to the stock market, as it continues to yield much more than Treasuries and banks.

That doesn’t mean I’m suggesting you park your hard-earned cash in an index fund and forget it. Far from it. The indexes exist to represent the market as a whole, but they usually contain a lot of lousy stocks.

At Growth Investor, we’re focused on the industry leaders that can regularly beat the market, not just follow along or play catch up. That’s why I get superior returns.

I recommend my stocks based on their strong fundamentals, earnings and sales growth. And I select the stocks that have the buying power to propel them higher through the year.

So when all of that sidelined cash comes roaring back into the market, my fundamentally superior stocks are in prime position to take full advantage.

With Growth Investor, my mission is to find you the next big stocks in the large-cap arena, as well as to steer you away from the duds. Over 30 years in the industry, I’ve devised a system that analyzes roughly 5,000 stocks, grades them according to eight specific fundamental factors, and waits for the right signal to buy. In other words, my flagship service is all about maximizing returns while minimizing risk.

Many of our Growth Investor stocks are also enterprises that dominate their markets and their industries. These fundamentally superior equities boast double-digit forecast sales and earnings growth on average.

But in this report, I’m going to show you the six companies that have emerged as the crème de la crème that you should buy in 2021. With strong sales growth and profits ahead, these stocks are a must-have for your portfolio in the year ahead…

Top Stock #1: BGFV

Back in 1955, United Merchandising Corp. was founded and operated five stores under the trade name “Big 5 Stores” to provide World War II army surplus items. The company’s first five stores were located in Southern California.

The company changed its name to Big 5 Sporting Goods Corporation (BGFV) in 1963 as it expanded its business to include sporting goods products.

Today, Big 5 Sporting Goods is a leading sporting goods store in the U.S., with about 430 locations across 11 states. The company’s retail stores offer traditional sporting goods and accessories, including athletic shoes and apparel, as well as indoor and outdoor athletic equipment; hunting, camping and fishing gear; winter and summer recreation products; and tennis, golf and roller sports gear.

With folks turning to outdoor recreation and home fitness programs during the global pandemic, many Americans turned to Big 5 Sporting Goods for their equipment needs.

The sporting goods retailer noted that its first quarter was a record in terms of sales and earnings, thanks to robust demand for its products, especially winter-related products. Same store sales jumped 31.8% year-over-year.

For the first quarter, Big 5 Sporting Goods achieved total sales of $272.8 million and earnings of $21.5 million, or $0.96 per share. That’s up from sales of $217.7 million and an earnings loss in the first quarter of 2020. The consensus estimate called for earnings of $0.50 per share on $260.18 million in sales, so BGFV posted a 92% earnings surprise and a 4.9% sales surprise.

Company management commented, “Our strong sales momentum has continued into the second quarter with sales performing at historically high levels for the quarter to date.” For the second quarter, BGFV expects same store sales to rise between 22% and 27% and for earnings per share to come in between $1.05 and $1.25. That compares to a same store sales decline of 4.2% and earnings per share of $0.52 in the second quarter of 2020.

Top Stock #2: DR Horton, Inc. (DHI)

D.R. Horton, Inc. (DHI) began operations in Fort Worth, Texas, where it constructed its very first home. Since then, the company has built more than 830,000 houses across the U.S. While that’s an impressive number, D.R. Horton is grounded in its mission to focus on creating homes for families and individuals, rather than focus on how many houses it can build.

And that’s why D.R. Horton has been dubbed “America’s Number-One Homebuilder.”

D.R. Horton has operations in 44 of the top 50 homebuilding markets in the U.S., and it ranks in the top five in 36 of these markets. The company’s homes are offered under a few brand names, including D.R. Horton, Express Homes, Emerald Homes and Freedom Homes, which enables the company to provide homes for every stage of life—from first-time homebuyers to those looking for a vacation home to families needing more room to empty nesters.

D.R. Horton released better-than-expected results for its second quarter in fiscal year 2021. During the quarter, the company closed on 19,701 homes, or a 36% year-over-year increase. In turn, homebuilding revenue jumped 41% year-over-year to $6.2 billion. Total second-quarter revenue rose 43% year-over-year to $6.4 billion, while earnings surged 95% year-over-year to $2.53 per share. The analyst community was expecting earnings of $2.20 per share and revenue of $6.13 billion.

Given the strong quarterly results and the robust housing market, D.R. Horton increased its full-year 2021 outlook. For fiscal year 2021, the company expects revenue between $26.8 billion and $27.5 billion, up from $20.31 billion in 2020. D.R. Horton also anticipates that it will sell 82,500 to 84,500 homes this year.

Top Stock #3: DOCU

After determining that paper-based agreements were costly, slow and prone to errors, DocuSign, Inc. (DOCU) developed e-signature technology in 2003. Eliminating the manual paper process gives companies faster turnaround times, limits errors and reduces expenses.

Through DocuSign’s cloud-based platform, companies can develop, upload and send agreements to all stakeholders for electronic signatures. The agreements can be approved on practically all devices and from nearly anywhere in the world. In fact, DocuSign has more than 500,000 customers and millions of users in more than 180 countries.

Consider this: 18 of the top 20 global pharmaceutical companies, 10 of the top 15 global financial services companies and seven of the top 10 global tech companies all utilize DocuSign’s technology. In addition, 800 federal, state and local government agencies utilize the company’s platform.

DocuSign smashed analysts’ earnings and revenue estimates for its first quarter in fiscal year 2022. The company even added its one millionth customer to the DocuSign platform recently, as more and more businesses turn to its platform for document signing and sharing.

During the first quarter in fiscal year 2022, total revenue jumped 58% year-over-year to $469.1 million, and subscription revenue increased 61% year-over-year to $451.9 million. Estimates called for total revenue of $437.81 million.

First-quarter earnings soared 266.7% year-over-year to $0.44 per share, compared to $0.12 per share in the first quarter of fiscal year 2021. The consensus estimate called for earnings of $0.28 per share, so DocuSign topped estimates by 57.1%.

For its second quarter in fiscal year 2022, DocuSign expects total revenue between $479 million and $485 million. That compares to analysts’ current estimates for total revenue of $473.68 million. Subscription revenue is forecast to account for between $459 million and $465 million.

Top Stock #4: EPAM

EPAM Systems (EPAM) operates in more than 35 countries, with more than 43,450 EPAMers and more than 275 Forbes Global 2000 customers. The company also has strategic partnerships with big-name corporations like Adobe, AWS, Google, Microsoft, Salesforce and SAP.

So, what services does EPAM Systems offer to attract such noteworthy partners? Simply put, EPAM Systems helps businesses adapt, grow more agile and faster, and stay competitive amidst a constantly evolving digital world. The company offers consultants and data expertise, designers to customize and develop digital experiences, engineers to construct software platforms, next-generation software solutions and process optimization solutions.

EPAM Systems collaborates with clients in a variety of industries, including automotive, retail, business information services, financial services, life sciences, travel and hospitality, software and insurance. The company has also partnered with healthcare clients, which includes Curogram. EPAM Systems is working with Curogram to help healthcare systems implement a simplified COVID-19 crisis response solution.

The global pandemic overall drove many new customers to EPAM Systems’ doorsteps as it accelerated digital transformation. EPAM Systems’ CEO Arkadi Dobkin recently commented, “Our strong start to 2021 highlights the rapid pace of digital transformation, application modernization and the need for new business models across industries.”

During the first quarter of fiscal year 2021, EPAM Systems achieved earnings of $1.81 per share on $780.8 million in revenue. That translated to 26.6% year-over-year earnings growth and 19.9% year-over-year revenue growth. Analysts were expecting earnings of $1.68 per share, so EPAM Systems posted a 7.7% earnings surprise.

Given strong ongoing demand for its services, EPAM Systems increased its outlook for fiscal year 2021. Full-year revenue is now forecast to grow at least 29% year-over-year. Full-year earnings per share are expected to be between $7.54 and $7.76, which compare to earnings of $6.34 per share in fiscal year 2020.

Top Stock #5: FUTU

Based in Hong Kong, Futu Holdings Limited (FUTU) is a Chinese financial services company. Through its brokerage and wealth management platform, Futu Holdings provides stock trading, wealth management services, market data and information, margin financing and other interactive services. The company’s services are available in Hong Kong, China and the U.S.

The company’s main platform, Futubull, enables investors to trade stocks in several markets, as well as offers real-time stock prices, financial news and other market data. The platform also provides an interactive community for investors, which allows them to connect and share trading ideas. Futu Holdings’ Moomoo platform is geared for international investors, offering transaction services for stocks and options, as well as ADRs, ETFs and other financial products.

Some folks refer to Futu Holdings as the “Robinhood of China,” given that the company offers similar services—paid and commission-free brokerage services.

Thanks to a surge in users, Futu Holdings Limited achieved “robust growth” during its first quarter in fiscal year 2021. The company added 273,000 paying users during the quarter, which brought its total paying client base to 790,000. That represents a 231% year-over-year increase. FUTU also noted that it now has about 1.96 million registered clients and a total of 14.2 million users.

First-quarter revenue soared 349.4% year-over-year to HK$2.2 billion, and adjusted earnings per share surged 634% year-over-year to HK$1.18 billion. In U.S. dollar terms, FUTU reported revenue of $283.6 million and earnings of $151.7 million. Earnings per ADS jumped 557% to $1.03.

Top Stock #6: IDXX

In the past 30 years, IDEXX Laboratories, Inc. (IDXX) has grown into a leading provider of veterinary products and services. Last year alone, the company dedicated $100 million in research and development; as a result of this dedication to innovation and new products, Idexx Labs has a variety of products that are used by veterinarians in more than 175 countries.

A few of the products developed in the past year alone include the IDEXX SDMA test, which helps veterinarians diagnose and treat kidney disease; fecal antigen testing, which helps detect intestinal infections; H3N2 Canine Influenza RealPCR Test, which provides specific testing for the H3N2 virus; and IDEXX Web PACS, a picture archiving and communications system used to optimize diagnostic imaging.

Idexx Labs also offers equine health products, livestock and poultry diagnostics, dairy testing and water testing solutions. In fact, the company’s products offer reliable diagnosis and treatments for more than 50 diseases that are prevalent in cows, pigs, chickens and horses. And its diagnostic tests evaluate the quality and safety of water and milk.

Given the company’s already vast portfolio and commitment to R&D, it’s no wonder that IDEXX Laboratories continues to post double-digit earnings and sales growth. For the first quarter, IDXX achieved revenue of $778 million, or 24% year-over-year revenue growth. Analysts were expecting first-quarter revenue of $737.38 million. First-quarter earnings jumped 82% year-over-year to $2.35 per share, topping forecasts for $1.71 per share by 37.4%.

Company management commented, “The IDEXX team delivered exceptional performance in the first quarter, reflecting continued robust demand for companion animal healthcare globally, supported by our innovation and direct commercial engagement.”

IDEXX Laboratories now expects full-year revenue between $3.11 billion and $3.16 billion, or 14.5% to 16.5% annual revenue growth. Earnings per share are forecast to be between $7.88 and $8.18, or 17% to 22% annual earnings growth. Both forecasts are nicely higher than the current consensus estimate.

How To Take Your Gains
to the Next Level in 2021

The stocks we’ve just discussed are a great start. Own even a few shares of the winners I’ve identified, and you could increase potential profits and income. But if you’re like the tens of thousands of people I’ve talked to in my career, you want more.

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They say money talks, and nowhere is that more applicable than in business. The reason why Growth Investor has become one of the most respected investment newsletters in the country is that I have the track record to back it.

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If you trust your instincts and seize this major wealth-building opportunity today, I guarantee it will be your most potentially profitable risk-free decision of the year.

Thank you for taking the time to read this report. I hope you enjoyed reading it as much as I enjoyed preparing it for you. And I hope that you will carefully consider joining me at Growth Investor. Whatever you decide, I wish you the best of luck with your investing knowledge. Join Now!


Louis Navellier