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3 Stocks to Buy February 2021 and Complete Your Portfolio

3 Stocks to Buy in February 2021

Hey Bow-Tie Nation, in this video not only am I going to share three stocks I’m buying for our 2021 portfolio but I’ll share one of the most important lessons in investing.

Our portfolio on Stockcard.io has surged over the past few months, up 32% and beating the market by 25% but it’s been on the back of really just a handful of stocks. We’ve added nine stocks to the portfolio so far with strong exposure to energy, financials and healthcare, three of my favorite stock sectors for 2021…

But we’re missing out on a LOT of the market. If returns on those three sectors were to slow down, the portfolio would be toast and even if they don’t, every portfolio needs a little diversification.

Now I’m not talking about the kind of diversification that kills your returns, the kind Warren Buffett says is protection against ignorance in your stock analysis. Buffett’s Berkshire Hathaway portfolio has 45 stocks, so you can hold a couple dozen stocks and still make those outsized returns without being too diversified.

What I’m talking about here is being able to spot the gaps in your portfolio, where you’re missing out on opportunities and what you can add to not only boost returns but lower risk!

In this video, we’ll review the 2021 Bow Tie Nation portfolio, which stocks I’m buying to beat the market. Then I’ll use that to show you how to find the gaps in any portfolio, how to find stocks to buy and the three stocks I’m buying for February 2021!

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I’ve got these sorted by when we added them to the portfolio and you can see those first three; Diamondback Energy, ticker FANG, CVS Health, ticker CVS, and Citigroup, ticker C, were all in those three focus sectors of energy, healthcare and financials. Their up from 24% for CVS to 97% for Diamondback and I think can go higher throughout the year.

Oil prices are 35% higher from October on the economic recovery and weaker dollar, two trends that should continue all year. Healthcare is benefiting from a return to normal on health spending and the banks are realizing the recession isn’t going to hit them as hard as thought.

Besides these big picture fundamentals, all three of these stocks are good value plays on the sectors so we’ll hold on from here.

I added Emcor as a play on the potential for infrastructure spending and renewables in October with a 33% return so far. Anthem is one of the best insurers out there and another play on that healthcare theme. And we actually took profits in Lyft after the shares shot up 42% in less than a month.

We’ve actually sold four of the stocks in the portfolio for different reasons. For Lyft, it was still very early in the recovery and I was worried that early bump in the shares was going to evaporate. Shares are up another 30% from there but you gotta be happy with a 42% return in a month. Second guessing your decisions is just going to stress you out and won’t make you a better investor.

We’re still waiting for shares of FirstEnergy, ticker FE, to rebound but collecting a 5% dividend while we wait. Devon Energy and Renewable Energy Group are two more we took profits on quickly, making 54% and 30% in about a month on each of those.

For these, it was about hedging that risk to energy a little. At the time, we only had nine stocks in the portfolio and three were energy companies, so I kept Diamondback and sold these two.

AT&T isn’t a stock that’s going to set the bed on fire but it’s hard to beat a 7% dividend yield and I do think the shares are undervalued. We’re already at a 25% return in United Microelectronics, ticker UMC, and 11% higher on Wells Fargo, ticker WFC.

Now I just flew through those because I want to get to spotting the gaps in your portfolio and those three stocks I’m adding to the portfolio.

But to find where you need to add stocks to your portfolio, you can start by looking at the sectors you have stocks in and which you’re missing. The graphic here shows the 11 sectors of the economy and major industries within each.

And I’m not saying you need stocks from every sector in your portfolio. It starts with that big picture analysis, what are the broader market forces that are benefiting certain sectors and where can you find the best opportunities.

A Quick Recap On Our Portfolio

Looking back on our portfolio; we’ve got telecom, healthcare, financials, energy, industrials and tech but nothing yet in consumer staples or discretionary or shares of materials companies.

And each of these three sectors has some real room for growth this year; growth I don’t want to miss out on.

WW International (WW)

For our first addition, I’m buying WW international, ticker WW, formally weight watchers.

Now a lot of the good rebound stocks in consumer discretionary names have already rebounded even if they’re not out of the woods yet. Shares of Carnival are up 40% from November and Macy’s is up 130% against what’s probably a slow death for department stores.

But we could be coming into a strong period for consumer spending. The personal savings rate hit 33% during the pandemic a record high and at 13%, it’s still higher than any point in the last five decades.

When people start getting out later this year and actually start spending that money, you could see a boom in some of these consumer discretionary stocks. And while weight watchers isn’t exactly what you think about when you think shopping spree, I really like it here for another reason.

People got FAT during the lockdowns!

Yeah, you can’t see it but I’ve had to kick my ass at the gym and eat…well eat nothing for six weeks to get down to my pre-pandemic weight.

It happened to a lot of people and the first place they’re going to run so they don’t look like Jabba the Hut when they start going out…weight watchers!

The company is the leader in the $60 billion global weight management industry with more than 900,000 active subscribers managed by 8,000 coaches and 3.8 million digital subscribers.

The lockdowns did hurt its in-person business but the company has worked to expand the digital offer and I think both of these come back strong in the summer. Analysts have an average price target of $32 a share which is nearly 30% above the current price and the stock trades for just 18-times earnings.

I wanted to add something with exposure to agriculture because crop prices are booming but the materials inputs stocks like Mosaic and CF Industries have already run up and are now coming back down.

Zoetis Inc (ZTS)

Looking in that theme, I do like Zoetis Inc, ticker ZTS, the $75 billion leader in animal health medicines.

So technically the company is in the healthcare pharma space selling vaccines and other drugs to the livestock and pet market but both of these segments have some strong cyclical trends in their favors. Livestock prices have followed other crop prices higher this year. This is a chart for Hog futures on the CME, up around 20% since July.

The companion pet market saw its own boom last year, people getting dogs and cats to keep their sanity during the lockdowns, so both of the company’s segments are doing really well.

Zoetis is the clear leader in the market, a part of Pfizer until the 2013 spinoff, with about half its sells from livestock and the other half in the pet market.

Shares trade a little expensively here at 45-times earnings but the always trade high, the lowest PE ratio over the last five years has been 36-times back in 2018. The company has been blowing away earnings expectations and I think the trend is just getting started. Zoetis beat earnings estimates by 19% last quarter and 39% in the previous.

Clorox Company (CLX)

Next here is consumer staples giant, the Clorox Company, ticker CLX and I kind of hesitate to add this one because I don’t think it’s going to zoom higher but right now is a good time to add it to your long-term portfolio.

Really the whole consumer staples sector; so a lot of your food processors and household goods companies, have sold off hard since August. Shares of Clorox are off the August peak by nearly 11% on the idea that as people get out of the house, they’re going to need less of these household names.

Instead of buying corn flakes to eat on lockdown, people will go back to having a donut at work. Instead of wiping their ass at home, people are going to be wiping it at restaurants and at the office.

So with Clorox, you’ve got a stock paying over a 2% dividend yield that has produced a 16% annualized return over the last decade. It’s a well-run company with stable cash flows…I mean, I don’t care how much people go out, they’re always going to need to wipe their butts at home.

My only hesitancy in adding it to the portfolio is only because this isn’t the kind of stock that’s going to set our portfolio on fire with high double-digit returns but for all you out there looking for those buy-and-hold stocks, this is it!

Sign up on Stockcard for free and make stock-picking easy with the research tool I use! Use promo code: bowtienation for an exclusive discount!

There you have it! Now that you know the three high potential stocks that I’m buying this February of 2021, are you in it or are you going to let it slip away? You may want to watch the whole video and decide.

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