April is the best month of the year for the stock market, and this April will be no different. That’s welcome news after a flat March.
To help you make the most of it, we’ve put together a list of the best stocks to buy in April. These are stocks that could align with the month’s bullish history to give you an even bigger pop over major indexes.
The monster tech stocks, like the FANGs, saw the strongest selling pressure we have seen in some time last month. Many of the economic recovery plays like Royal Caribbean Cruises Ltd. (NYSE: RCL) and Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) have also seen a strong round of profit-taking this month.
That’s left investors puzzled about where the opportunities are.
April should be a much better month for many reasons. We have a strong seasonal pattern that suggests that markets are weak in the last two weeks of March and strong in April’s first two weeks.
According to Bank of America’s seasonality database, April has been the best month of the November to May historic cycle with strong positive returns. Since 1928, stock prices in April have been up almost 70% of the time.
April should also be accelerated vaccine shipments, which will make for positive headlines and improving economic conditions.
Those headlines coupled with a historically good month for stocks should lead to buying and share price growth.
And top stocks like these are perfectly positioned to pop when the rest of the market grows…
Why ViacomCBS Stock Is a Buy for April
The top stock to buy to take advantage of what should be a strong month is ViacomCBS Inc. (NASDAQ: VIAC). This was one of the stocks that got hit hard by forced margin call selling at Archegos Capital Management, the family office run by William Hwang.
As a result of the selling pressure from the massive margin call, shares of CBS Viacom are down 30% in just the last month of trading.
The business of CBS Viacom is just fine. The company was late to the streaming game, but it is catching up fast. It has focused on live sports rather than trying to go head-to-head with Netflix Inc. (NASDAQ: NFLX) on content. CBS Viacom just signed a deal to add Italian soccer Serie A and Coppa Italia to its Paramount+ streaming service.
ViacomCBS also has some very valuable media properties besides CBS, including Showtime, Nickelodeon, MTV, BET, Comedy Central, VH1, CMT, and Paramount.
Although it pays top dollar for it, CBS Viacom also still has the rights to NFL football broadcasts.
Several analysts upgraded the stock on Tuesday as the margin selling began to clear and the stock stabilized.
The stock may have been overvalued near $100, but it is deeply undervalued under $50 and could bounce higher very quickly in March.
Under Armour Stock Is a Top Stock for April
Under Armour Inc. (NYSE: UAA) has also seen a weak March after bouncing sharply higher in the first months of the year. The company exceeded analyst expectations in its most recent earnings report. With an enormous amount of pent-up demand at the retail level, that is probably going to continue as we move into spring and summer.
It has beaten estimates for three quarters in a row, and analysts have been scrambling to raise estimates over the past few months.
Under Armour suffered more than most athletic apparel companies as its mall-based stores were not usually considered essential and were shut down. Pretty much all competitive athletic leagues were shut down as well.
Those conditions no longer exist in many parts of the country.
The company is expected to report earnings in early May, and we could see a strong bounce as traders begin to buy in expectations of another big earnings surprise.
The stock could ride an April rally much higher, and you could even see a pop in early May, making now the time to buy.
Pfizer Is the Best Stock to Buy in April
While Pfizer Inc. (NYSE: PFE) shares are up in March, there is so much good news anticipated from this company over the next several weeks the shares could quickly rally back to new highs in April as the market improves.
We should see a flood of improved headlines about the success of the Pfizer COVID-19 vaccine. Production lines are picking up the pace, and we will see more shots in more arms in April. These headlines should create buying interest for the stock.
As the United States moves close to full vaccination, international sales of the Pfizer vaccine should also start increasing. Pfizer has already committed to increasing shipments to Canada, a nation that has had a rough start in its vaccination efforts.
It has also announced plans to send 40 million doses to COVAX, a coalition led by the WHO and Unicef to distribute the COVID-19 vaccine worldwide and 500 million doses to Europe.
Keep in mind that although Pfizer is going to make a lot of money from the COVID-19 vaccine, it is not its only drug. Other top sellers for Pfizer include Prevnar 13 for pneumonia, cancer drug Ibrance, cardiovascular treatment Eliquis, and immunology drug Xeljanz.
We will be paying just 12 times expected 2021 earnings to own what is currently one of the most important companies in the world. As a bonus, we will be collecting a dividend yield of over 4% while we own the stock.
— Money Morning StaffTen hot stocks with massive upside potential [sponsor]
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Source: Money Morning