5 best stocks for March

The stock market started 2021 on a high note, but those early gains evaporated in February. When fools love it when stocks go down because it gives us a chance to buy our favorite companies at discounted prices.

Which stocks do we think are the best opportunities today? We asked five Motley Fool contributors to participate, and they called SL Green Realty (NYSE: SLG), Carparts.com (NASDAQ: PRTS), Etsy (NASDAQ: ETSY), Etsy (NASDAQ: ETSY), Uber (NYSE: UBER), and Airbnb (NASDAQ: ABNB).

A hidden e-commerce winner

Jeremy Bowman (Carparts.com): 2020 has been a great year for ecommerce stocks thanks to the pandemic, and Carparts.com was among the big winners, with stocks rising nearly 500%. Even with the economic reopening ahead, however, 2021 is shaping up to be another strong year for the auto parts retailer.

First, opportunity is more than just an e-commerce game. The company in the midst of a turnaround that began in 2019 when new management took over. Under the leadership of CEO Lev Peker, Carparts.com abandoned underperforming brands and consolidated the company’s operations, which previously included banners such as JC Whitney and Auto Parts Warehouse, under the Carparts.com brand, making marketing and much more effective branding. He also changed the corporate name from US Auto Parts to Carparts.com. Turnaround initiatives, which also include opening new distribution centers and upgrading its technology infrastructure, are paying off. Gross margin has increased for six straight quarters now, allowing the company to reinvest a greater percentage of its revenue in the business, and e-commerce sales have jumped 105% in the third quarter.

A number of macro factors also support the business. Auto parts sales have traditionally been strong emerging from recessions as consumers delay purchasing new cars, and the surge in used car sales during the pandemic is expected to boost auto parts sales, as is the case. increase in vehicle miles once the economy reopens.

Carparts.com will release its fourth quarter results on March 8. Currently, Wall Street only sees the company’s revenue grow 12% this year, which sounds like a lowball estimate. If so, the stock should have a lot of benefits from here.

About to have a big blow to the arm

Matt DiLallo (SL Green Realty): The past year has been tough for Manhattan’s largest office owner, SL Green Realty. The pandemic has greatly affected New York City, preventing office tenants from traveling to Manhattan skyscrapers.

However, office buildings are on the verge of being shot in the arm as vaccines are deployed, allowing people to resume occupying them. While businesses have quickly turned to remote working, most are eager to return to their desks as it is vital for productivity, mentoring, and culture building. This is why SL Green was able to collect 97.9% of the office rent billed last year and sign over 1.2 million square feet of new and renewed office leases even though most of the offices went unoccupied.

As a result of this potential return, the value of high-quality office buildings has held up relatively well. This has allowed SL Green to take advantage of the market to sell several properties over the past year at excellent values. These sales gave it the cash to consolidate its balance sheet, pay out a special dividend and buy back its battered stocks, which have fallen more than 25% since the start of 2020. The REIT has also been able to increase its monthly dividend. for the 10th consecutive year, pushing the return above 5%.

SL Green shares could skyrocket like a Manhattan skyscraper this year as companies get the “all clear” to return to their offices. Add that to its generous income stream, and this REIT looks like a winner.

Amazon-proofed e-commerce winner

Brian Feroldi (Etsy): In terms of electronic commerce, Amazon.com (NASDAQ: AMZN) tends to suck all the air in the room. However, the shift from offline to online sales is so massive that many businesses are poised to win.

Etsy has clearly established itself as one of those e-commerce winners. The company’s platform connects buyers and sellers of homemade products, a growing niche that isolates it from other e-commerce competitors.

Etsy’s 2020 figures show demand for the platform is outbreak. The company ended the year with 4.4 million active sellers (+ 62%) and 81.9 million active buyers (+ 77%). Total spending at the site more than doubled to $ 10.3 billion.

Etsy has taken full advantage of the growing demand. Revenue increased 111% to $ 1.7 billion. The revenue growth was so strong that Ety’s net profit rose 265% to $ 349 million, even though it significantly increased its spending on marketing, product development and recruiting.

Management doesn’t think hyper-growth is ending anytime soon. Revenue is expected to increase by at least 125% in the first quarter of 2020 and the margin is expected to remain strong for the foreseeable future.

All of these qualities have taken Etsy’s stock to a well-deserved all-time high. With stocks trading around 100 times 2021 earnings estimates, investors need to pay to buy the stock now. However, large companies usually negotiate at a premium, and Etsy’s results prove that this is a great company. I think the outperformance is here to stay.

Take a tour on this stock

Adam Levy (Uber): Uber is well positioned to capitalize on the return of travel and the reopening of the economy. The company has the unique ability to tap its two-way network of drivers and customers into new (and old) opportunities across its range of services. Other singularly focused “gig-economy” companies lack this capability.

Uber’s most valuable assets are its local networks of drivers and customers. Over the past two years, management has taken steps to exit markets where its network was not large enough to provide a competitive advantage. He also sold several non-core assets. As a result, Uber is entering a more focused business in 2021 with a bigger network advantage.

This benefit will come in handy when people return to travel. Most notably, the delivery business is expected to act as a tailwind for the most profitable mobility business, as Uber makes it easier for customers and drivers to transition between services. The company has already seen the benefits, as management says the ridesharing business has returned faster than other modes of transportation.

Despite the massive decline in mobility revenues last year, the segment remained profitable on the basis of adjusted EBITDA. The reopening will lead to a slowdown in the growth of States, but the improvement in withdrawal rates and operating leverage should lead it to positive EBITDA. As a result, management expects the company as a whole to produce positive EBITDA in 2021 as the delivery business sees improved profitability and mobility rebounds.

Open the door to this travel stock

Chris Snow (Airbnb): Some investors may be reluctant to invest in the home sharing company while we are still in the midst of a pandemic, but there are two reasons that won’t matter soon. First, the pandemic will end and travel will return. Second, Airbnb is perfectly positioned to take advantage of it.

Travel has certainly taken a hit over the past year, and Airbnb’s revenue has plummeted with it. The company’s sales fell 22% in the fourth quarter. But you have to put this drop in context. Consider the company’s fourth-quarter revenue of $ 859 million to exceed analysts’ consensus estimate of $ 748 million. And for the whole of 2020, revenue was only down 30% compared to 2019 – at a time when all the world was not traveling.

With many parts of the United States reopening and the distribution of coronavirus vaccines, Airbnb is optimistic that there will be “a significant rebound in travel” this year.

And then there’s Airbnb’s position in the travel space. Airbnb is already a clear leader in the home sharing market and once again people are feeling comfortable traveling again, there is no reason bookings shouldn’t go up for the company. . Airbnb offers unique experiences and rentals that can’t be found anywhere else, and you can bet people who have been locked in the house in the past year want both.

Maybe I’m biased in favor of Airbnb because I used the service to go on a four-month road trip with my family in 2019, but I’m not the only one who was impressed with the activities there. ‘business. Investors have pushed the company’s shares up more than 40% since it went public in December.

These investors focus on Airbnb’s total addressable market opportunity of $ 3.4 trillion and understand that the company offers rentals and experiences that its competitors cannot match. For investors looking for a unique business with the potential to experience huge growth as travel rebounds, Airbnb seems like a great choice.