3 hot stocks that could continue to crush the market

Concerns about economic recovery and inflation have not matched a hot stock market. The industrial sector is helping to lead the charge. It sports a fair share of promising growth stocks, as well as large traditional companies, many of which are beating the market.

We asked some of our contributors which stocks they think could continue to crush the market. They have chosen Zebra Technologies (NASDAQ: ZBRA), Waste Management (NYSE: WM), and NIO (NYSE: NIO).

Image source: Getty Images.

Zebra Technologies stands out

Lee samaha (Zebra Technologies): Zebra’s stock is up 111% from last year and 39% in 2021. That’s a comfortable outperformance, and it comes as the company’s technology has become staple during the pandemic.

Zebra is a maker of what management calls “enterprise asset intelligence” solutions. Clearly, laptops, barcode scanners, specialty printers, RFID printers and readers, and other products are used by workers to collect information. Concrete examples of its technology include e-commerce warehouses using scanners to monitor workflows, retailers managing inventory, and healthcare workers tracking and tracing medical products.

Global supply chains have been under a lot of strain during the pandemic, so understandably, many companies are making investments in Zebra’s technologies a priority. Whether businesses are looking to invest in production automation in a warehouse or in data capture for use with advanced analytics in a retail or healthcare environment, Zebra’s hardware and software solutions have the job to do with it. reply.

As such, management expects adjusted net sales growth of 18% to 22% in 2021, having started the year with a forecast of 10% to 14%. Clearly, the momentum is behind the business, and it is likely that the expansion of intelligent automation and digitization in the industrial economy will encourage multi-year growth in sales of Zebra’s solutions.

Trading 31 times 2021 estimated earnings, Zebra would not be viewed as a value stock by most. Still, investors should keep an eye on its results, as it wouldn’t be surprising to see Zebra’s upgrade forecast again, given the economy reopening.

Don’t throw away that dividend stock

Daniel Foelber (Waste Management): You may want to keep your distance as you pass one of the hundreds of landfills owned by Waste Management, the largest integrated waste and recycling service company in North America. But the company’s stock market performance left investors smelling like a rose. Waste Management inventory has grown over 20% so far this year and just hit a new all-time high last week.

While waste and recycling is a stable business model that tends to operate in good times and bad, Waste Management generates substantial revenues from its industrial and commercial customers. As business slowed down during the pandemic, these businesses naturally produced less waste, which presented a challenge. The company has responded by implementing cost-cutting measures, many of which are expected to be permanent.

These strategic decisions, along with its resilient and diverse customer base across a number of different industries, have helped it generate ample Free Cash Flow (FCF) and a bottom line to support its dividend. The company has just increased its dividend for the 18th consecutive year and set up a new share buyback program. In total, the company plans to distribute nearly $ 1 billion in dividends and repurchase up to $ 1.35 billion in shares this year.

Waste Management has the potential to combine its stable, recession-resilient business model with the benefits of environmentally conscious consumers who are increasingly interested in limiting waste generation. At a recent conference at WasteExpo 2021, CEO Jim Fish highlighted the role waste management could play in managing and delivering the waste needed by businesses to produce plastics and chemicals from materials sourced from sustainable sources. The conversion of this proposal into profit remains uncertain. But it’s a nice long-term trend worth following.

Hitchhike with this EV superstar

Scott Levine (NIO): NIO has slowed in the first five months of 2021, falling nearly 21%, but the company’s shares have flipped in recent weeks and are charging higher. In fact, shares of NIO climbed nearly 38% in June while the S&P 500 climbed more than 2% higher. And there are plenty of reasons to believe that this electric vehicle maker can continue to run ahead in the days to come.

In the first quarter of 2021, NIO saw strong growth in the number of deliveries. Achieving a quarterly corporate record, NIO delivered 20,060 vehicles in the first quarter of the new year, representing 490% year-over-year growth. But the record was short-lived. Last week, NIO said it delivered 21,896 vehicles, a 112% year-over-year increase, in the second quarter, a new quarterly high point.

Beyond the second quarter, investors will find the company is working to expand its charging infrastructure in China through 2021, a move that will help allay the fears of potential customers worried about the convenience of recharging. their vehicles. At the end of the first quarter, NIO had 206 battery swap stations, but management plans to expand it to more than 700 stations by the end of the year. In addition, the company, which had 146 charging stations in its network at the end of March, plans to increase this number to 600 stations by the end of the year.

Besides its efforts to increase its presence in China, NIO also aspires to gain a foothold in Europe. Last month, the company announced that it had received approval for production of its SUV, NIO ES8, including approval of the vehicle’s associated license records. The company plans to deliver the first vehicles to Norway, which will be NIO’s first foreign market, in September.

By providing Chinese customers with a variety of solutions to keep their vehicles charged, NIO is aggressively tackling the range issue that plagues would-be electric vehicle owners. It plans to bring a similar suite of solutions to Europe when it begins delivering the vehicles – something that sets it apart from its peers and should help the company continue on its path to future growth.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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