It’s safe to say we are currently in a stock picker’s market. With plenty of economic and political factors making things complicated for investors at the moment, generating alpha is certainly not as straightforward as it was during 2020.
Things like rising interest rates, potential tax increases, and inflation fears are throwing investors a real curveball and making investment decisions harder than normal. These factors play directly into the narrative that being selective in your stock purchases is one of the only real paths towards profits at this time.
According to Bank of America, April is the strongest month during the November-April period and is up 66% of the time with an average return of 1.37%. While seasonality might be working in investors’ favor this month, it’s still going to be important to identify pockets of strength in certain sectors and stick to the best of the best when it comes to new buys.
That’s why we’ve put together a list of the top 3 stocks to buy in April to give you a better idea about what to put on your shopping list. Let’s take a deeper look below.
1. United Parcel Service
First up is United Parcel Service (NYSE:UPS), the world’s largest package-delivery company and one of the best stocks to own out of the increasingly strong transportation sector. United Parcel Service is a great option in April and beyond thanks to all of the trends that the company is benefitting from at the moment.
For example, you have more people ordering e-commerce products than ever before and new stimulus payments heading out to consumers that should encourage additional spending. It’s also worth considering that most online retailers are standardizing free 2-day shipping and free return shipping, which will surely benefit this company going forward.
While some investors might think that the uptick in e-commerce shipping was only a short-term boost driven by the pandemic, the truth is that e-commerce volumes have been increasing each year for a while now and that likely won’t be changing anytime soon.
United Parcel Service will report its first-quarter earnings on Apr. 27 and it wouldn’t be surprising to see the stock rally into the release, especially given how the company’s competitor FedEx (NYSE:FDX) reported a strong earnings beat and updated forward guidance in March.
2. Coinbase
Next on our list is Coinbase, which is expected to go public via direct-listing on NASDAQ (ticker: COIN) this April. As the largest U.S. cryptocurrency brokerage, this is without a doubt one of the most anticipated IPOs of the year and certainly an intriguing investment prospect to consider this month.
The company’s platform features advanced cybersecurity and cryptography technology, proprietary crypto compliance infrastructure, and securely stores over $90 billion in total assets according to the S-1 filing. With a mission “to create an open financial system for the world,” you have to admire this company’s ambition.
Coinbase generates revenue based on fees earned on transactions that are processed through its platform along with custodial services, interest, and subscriptions. The company generated $1.14 billion in revenue and $322 in net income last year, which is certainly impressive for a company that is about to go public.
Investors should keep an eye out for an official IPO date announcement and monitor the price of Bitcoin, which will probably have a major correlation with the stock price of this company.
3. Medtronic
Companies in the healthcare sector have been performing well in the current market environment, and investors should be attracted to the fact that healthcare spending makes up roughly 18% of U.S. GDP every year.
That’s a great reason to consider adding shares of Medtronic, a global medical device manufacturer that is criminally underrated by investors. With operating segments including a cardiac and vascular group, minimally invasive technologies group, restorative therapies group, and a Diabetes group, this is a company that has a diverse business and a dominant position in the medical devices industry.
Medtronic (NYSE:MDT) should see a strong uptick in sales this year as elective procedures pick up again, and the company’s robust pipeline has plenty of new products that investors should be excited about. That includes new products like the next-generation TAVR valve for heart issues and a soft-tissue surgical robot.
From a technical standpoint, Medtronic stock has been consolidating for months and is a stone’s throw away from breaking out to new all-time highs, which is another reason why adding this high-quality company in April might be a prudent move.