Best Shares to Buy in 2021

December 15, 2020 11:00 UTC
Reading time: 27 minutes

If you’re interested in knowing what some of the best shares to buy now are then you are in the right place!

The pandemic triggered significant shifts in consumer, business and economic trends not seen since the Great Depression causing some stock markets to surge to record highs. 

Keep on reading to learn more about what to invest in, what some of the best shares to buy now could be and how to capitalise on these historic changes!

Global List of Best Shares to Buy

Below is a quickfire list of some of the best shares to buy. These cover a huge range of different themes and sectors such as airlines, digital payment companies, auto companies and more, as well as different regions such as the best shares to buy UK and in the US, Europe and Asia! 

Of course, this list is not exhaustive so feel free to use it as a platform to find even more shares to watch. So, let’s take a look at the list before we explain the reasoning in more detail further down. 

  1. EasyJet PLC (EZJ): A covid recovery play that could fly away! 
  2. Adyen NV (ADYEN): A digital payment beast in the making?
  3. Tesla (TSLA): An electric vehicle play that could race away?
  4. Disney (DIS): A sleeping giant in streaming?
  5. NIO Inc (NIO): An electric vehicle play that beats Tesla?

Let’s dig a little deeper into each one of these companies and see what makes them worthy of being on the best shares to buy now list!

Best Shares to Buy UK and Europe

Fund managers have increasingly turned bullish on the prospects of the European and UK stock market, even though they lagged behind the US stock market in 2020. Reasons cited include the rollout of a covid vaccine, a stamp duty holiday giving UK investors more capital to invest with and the freezing of capital gains tax in the UK.

Even legendary bond fund manager and Pimco co-founder, Bill Gross, said that European stock markets could outperform over the next few years as they have largely been shunned by investors in previous years.

Many believe there are also bargains to be had in stock market sectors that were battered by the coronavirus pandemic such as travel, leisure and banks (due to governments banning dividend payouts). 

Let’s take a look at a few potentials!

1. EasyJet PLC (EZJ): A covid recovery play that could fly away!

Shares in airline stocks around the world were battered during the lockdown restrictions from the coronavirus pandemic in 2020. However, with the rollout of a coronavirus vaccine, things are slowly starting to get moving again. The key emphasis on the word ‘slowly.’

While airlines focused on business travel may suffer due to new remote working opportunities, there are many people itching to go on holiday and to see family and friends around the world. EasyJet is well placed to take advantage of this with its share price crashing nearly 80% lower since 2015.

However, it is certainly not a momentum play and is most likely for the long-term value investor. EasyJet is dealing with a huge debt pile problem but have brought in some specialists to help deal with it.

▶️ Deutsche Bank upgraded its rating on the stock to ‘buy’ from ‘hold’ with a target price increase to 1,150p (GBP).

This represents significant upside from where the stock closed at the end of 2020, as the long-term monthly chart of EasyJet’s share price shows below:

Source: Admiral Markets MT5, EZJ, Monthly - Data range: from 1 Sep 2005 to 20 May 2021, accessed on 20 May 2021 at 12:45 pm GMT. Please note: Past performance is not a reliable indicator of future results.

In the chart above, it is clear to see just how far down EasyJet’s share price is from its all-time high price level of 1,928p (GBP) made in 2015. Interestingly, the fall stopped at a historical ascending trend line support (black line) and has since tried to claw its way back up.

Whether this is the best share to buy or not for a portfolio will largely depend on the investors' style. As EasyJet continues to face some headwinds and as its share price is near rock-bottom levels, it is considered more of a value investment rather than momentum growth (as the next pick is) and is most likely more suited for long-term patient traders.

Value investors often invest for the long-term so being able to buy shares with low fees while collecting dividend payouts is essential. Fortunately, with the Admiral Markets Invest.MT5 account you can do just that and more!

2. Adyen NV (ADYEN): A digital payment beast in the making?

Adyen is a Dutch payment company that has more than 3,500 customers around the world. The company provides merchant services online to help businesses accept electronic payments. Most interestingly, since listing its share publicly on the Euronext exchange (Amsterdam) in June 2018, its share price was up more than 350% towards the end of 2020.

With more people moving online and more businesses going online, many analysts are bullish on the prospects for digital payment providers. The sector is certainly one to watch but one that is becoming increasingly crowded. But with Adyen securing a European banking licence and licences in Australia, Singapore, and Hong Kong while securing deals with eBay it’s one to watch.  

Source: Admiral Markets MT5 Supreme Edition, ADYEN, Weekly - Data range: from 10 Jun 2018 to 20 May 2021, accessed on 20 May 2021 at 13:45 pm GMT. Please note: Past performance is not a reliable indicator of future results. Five-year data not available.

In the long-term, weekly chart of Adyen’s share price it is clear to see the uptrend that developed as soon as the company listed on the Euronext exchange in June 2018. The trend is confirmed by the 50-period (red line) and 100-period (green line) exponential moving averages also moving higher and separating away from each other. This indicator is often used to help confirm the trend of a market and for levels of support and resistance where the market could turn.

This type of stock is much more suited for momentum growth investing as it is in an in-demand sector. While investors could embark on the traditional form of investing in purchasing shares of the company, momentum growth stocks are often favoured by traders who speculate on the rising share price using Contracts for Difference (CFDs).

This product enables traders to trade on leverage (meaning you can control a large position with a small deposit) and also potentially profit from rising and falling markets. With Admiral Markets you can open a Trade.MT5 account and trade CFDs on thousands of different instruments across stocks, indices, currencies and commodities! To learn more and open an account today, simply click on the banner below:

Best Shares to Buy US Stock Market

The US stock market experienced a rollercoaster ride in 2020 with the S&P 500 stock market index crashing 35% lower during the coronavirus pandemic but then rallying nearly 70% higher from these lows to new all-time high price levels.  

It is also helped that it was an election year that tends to outperform the rest of the election cycle years. With a new president in the White House also comes new ideas. Joe Biden’s focus on renewable energy, climate change and healthcare helped these sectors perform well in 2020 and are likely to do so in 2021 and beyond.

But there are also some fears that changes to tax and a harder stance on some businesses from the new administration could affect stock market gains. Nonetheless, a CNBC survey of analysts expected an 8-22% upside for the S&P 500 index in 2021.

So what companies are shaping up to be the best shares to invest in for 2021? Let’s find out!

1. Tesla (TSLA): An electric vehicle play that could race away?

Tesla was one of the hottest stocks for 2020 and many investors believe it could be the same for 2021. The electric vehicle maker’s share price was up more than 600% due to a variety of factors.

One factor was the inclusion of Tesla to the S&P 500 stock market index - one of the world’s most famous and respected indexes. The addition was announced in November and took place later in the year. However, Tesla shares were already surging before this news - they just accelerated on it!

One of the other big factors is that many countries are moving towards cleaner energy sources, leading governments to accelerate plans to transition from petrol/diesel vehicles to electric cars. The increase in demand has helped Tesla who are expanding their operations with new plants in Shanghai, Berlin and Texas.

▶️ ARK Investment fund manager Cathie Wood has a price target on Tesla of a whopping $3,000 by 2025!

Source: Admiral Markets MT5 Supreme Edition, TSLA, Weekly - Data range: from 13 Aug 2017 to 20 May 2021, accessed on 20 May 2021 at 14:45 pm GMT. Please note: Past performance is not a reliable indicator of future results. Five-year data not available.

It’s clear to see the long-term uptrend in the weekly chart of Tesla’s share price above. Such high momentum-based growth stocks can be a challenge for investors in finding price levels to enter. 

While the weekly moving averages could provide levels for investors, these types of strong-trending stocks tend to be the focus of lower timeframe traders who capitalise on the momentum.

For example, traders may employ day trading, or swing trading strategies to capitalise on the upward movement on lower timeframes such as the 1-hour chart or 10-minute chart.

2. Disney (DIS): A sleeping giant in streaming?

Disney is a company that needs no introduction. Since being founded in 1923 it has come a long way with subsidiaries including well-known names such as Pixar, Marvel, Hulu, 20th Century Studios, Lucasfilm and its Disney Parks and Experiences division.

However, what has most investors excited about is the company’s move into online streaming with its Disney+ service. While the industry is filled with other streaming giants such as Netflix and Apple TV+, analysts still remain bullish regarding Disney’s venture.

For example, Goldman Sachs increased its price target for Disney’s share price to $225, representing more than 150% upside from its 2020 lows.

Source: Admiral Markets MT5 Supreme Edition, DIS, Monthly - Data range: from 1 Apr 2007 to 20 May 2021, accessed on 20 May 2021 at 15:45 pm GMT. Please note: Past performance is not a reliable indicator of future results.

Shares in Disney had a rocky ride in 2020 which included a near 45% drop during the first half of the year due to the coronavirus pandemic, before a more than 150% rally higher by May 2021.

Much of the decline was due to the closure of Disney’s Park and Resorts division. This is one reason investors are liking the company as it now diversifies into online streaming. 

The 50-period (red line) and 100-period (green line) exponential moving averages are also moving higher confirming the uptrend, while providing areas from where price may turn and bounce higher.  

With the MetaTrader 5 trading platform provided by Admirals you can view live share prices for FREE, while accessing a range of unique cutting edge investing tools.

Best Shares to Buy Asia-Pacific Stock Market

Many analysts believe that 2021 is going to be a year of strong performance in emerging markets. After all, the emerging market is home to 85% of the world’s population and is now considered to be the next engine of global economic growth.

Japan, China and Hong Kong’s stock markets have all overtaken both European and UK in terms of market capitalisation. However, they are still some way of the size of the US stock market.

Nonetheless, dramatic shifts of global power are taking place right now which is why investors are bullish on the Asia-Pacific region.

1. NIO Inc (NIO): An electric vehicle play that beats Tesla?

While most investors have heard of Tesla, not many may have heard of NIO. Both companies are leaders in the electric vehicle market and are actively traded by millennial investors.

NIO is a Shanghai-based electric vehicle company that had revenues of a mere $720 million in 2018 compared to Tesla’s $21.4 billion. However, for most investors, NIO is an exciting long-term growth play that is well-positioned to take advantage of the emerging growth in China’s electric vehicle market.

▶️ Morgan Stanley and JP Morgan analysts have price targets on the stock of around $75 to $80. 

Source: Admiral Markets MT5 Supreme Edition, NIO.US, Weekly - Data range: from 9 Sep 2018 to 20 May 2021, accessed on 20 May 2021 at 17:45 pm GMT. Please note: Past performance is not a reliable indicator of future results. Five-year data not available.

In the above weekly price chart of NIO’s share price, it is clear to see the initial weakness that developed from its initial public offering in September 2018. However, during the coronavirus pandemic of 2020 investors surged into NIO shares helping the stock to rally nearly 1,500% higher for the year.

Since then, there has been a huge stock market sector rotation. Investors spent the beginning of 2021 banking gains on high flying tech shares to reinvest in undervalued shares that would benefit from the reopening of the economy and the covid vaccine. 

This has led to NIO’s share price moving back to some interesting long-term levels of support such as the 50-period (red) exponential moving average.

Best Shares to Buy Rationale

2020 saw some huge divergences between global stock markets. By the end of the year, the US stock market was trading at record highs, with a few Asia stock markets as well. The rest, including Europe, were lagging behind the rest of the world.

While the coronavirus pandemic threw global markets out of sync, many analysts are predicting for the ‘great reset’ to happen. With central banks around the world continuing to support economies by providing cheap credit, that money is expected to flow back into the stock market.

Most stock markets continued upwards to trade at record highs in the first quarter of 2021, before pulling back in the second quarter. However, the fundamentals and institutional themes still remain intact:

☑️ The Joe Biden impact from the White House.

☑️ The creation of the world’s largest trading bloc in Asia-Pacific.

☑️ A surge in demand for biotech and pharmaceutical stocks for vaccine protection.

☑️ A shift towards more renewable and clean energy sources.

☑️ The China story and its rapid economic growth, supported by the state.

☑️ A new commodity bull cycle caused by supply constraints and increasing demand.

☑️ A sector rotation not seen since the Great Depression.

In each of these situations, there are certain companies that are set to benefit. While no one can ever predict with 100% certainty which shares will do the best and which ones will not, understanding the big picture theme can help to provide an edge.

Stay up to date with all the latest market trends through the FREE Admiral Markets Spotlight webinar series where three times a week, three professional traders talk through the markets, providing you with the latest insights and strategies to use.

How to Find the Best Shares to Buy

Buying shares online is actually quite a simple process as our step-by-step walkthrough in a later section will show. However, identifying what shares to buy does require some skill, research and preparation. Even then, there is still no guarantee of success which is why risk management is important.

Buying shares: Risk management 101

Beginner investors often put their eggs all in one basket expecting their decisions to always work in their favour. For example, an investor might have £10,000 to invest and may choose to invest it all into just one stock. This means there is no capital left if another - perhaps better - opportunity comes along.

Also, a sharp - yet temporary - fall may cause the investor to make an emotional decision and exit early, thinking about short term fluctuations in price rather than the company’s long-term fundamentals.

One risk management technique used by many investors is to spread investments across different types of companies that operate in different sectors. When one sector is not performing well, another sector could be. This helps to build a more diversified and balanced portfolio that can help to balance out the effect of changing market conditions.

For example, an investor who has £10,000 to invest, may choose to invest £2,000 in five different companies throughout the year. Of course, the risk tolerance of each individual is different so it is worthwhile spending a bit of time building a plan on how you want to invest throughout the year.

Buying shares: Technical vs Fundamental vs Sector analysis

In the next section, we detail - what could be - some of the best shares to buy in 2021. The criteria for selection involves the following types of analysis:

☑️ Fundamental analysis. This type of analysis involves analysing a company at a financial level. This includes metrics such as sales performance, earnings trends, debt levels, new product announcements, the economic environment and so on. 

☑️ Technical analysis. This type of analysis involves analysing a company’s historical trading price via a price chart. Trading patterns and technical trading indicators can often leave clues on who is the most dominant force in the market (buyers or sellers), as well as pinpoint potential turning points in a company’s share price.

☑️ Sector analysis. As discussed in the previous risk management section, having options across different sectors can help in building a diversified and balanced stock portfolio. The criteria aims to identify companies from a range of different sectors such as banks, utilities, financials, energy, retail and so on.  

Now you know more about the criteria behind identifying - what could be - some of the best shares to invest in for 2021, let’s take a look at the list.

How to Buy Shares Online

Buying and selling shares online can be done in just three simple steps:

  1. Create a share trading account.
  2. Download your share trading platform.
  3. Open a trading ticket and take your first trade!

Let’s have a look at these steps in more detail for a step by step walkthrough on how to buy the best shares for beginners.

Step 1: Open your Admirals Invest.MT5 Account

You can open an online share trading and investing account with Admirals in just a few minutes. Simply click on the Start Trading button on the homepage and fill out a simple questionnaire that is standard for regulated brokers. 

Once you’ve done this, you’ll get access to the Trader’s Room, where you can open demo and live trading or investing accounts, manage deposit and withdrawals and access additional cutting edge investing tools. 

Step 2: Open your Investing Platform

From the Trader’s Room homepage, simply select Trading Platforms on the left-side menu. This will then give you access to download the MetaTrader 5 trading platform for PC and Mac but you can also use the Web Trader platform as well where you can trade directly from your browser.

Simply follow your computer’s prompts to complete the download of your MetaTrader 5 share trading platform, if you want to access additional features like automated share trading from the MetaTrader Market place.

An example of the Admiral Markets MetaTrader 5 trading platform showing the price chart of Disney shares and an open order ticket.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and do not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admiral Markets (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

Step 3: Place your Trade!

Open up your share trading platform and follow these steps to place a trade:

  1. Open the Market Watch window by selecting View from the menu at the top of the platform or by pressing Ctrl+M on your keyboard. This will open up a list of tradable symbols on the left side of your chart.
  2. Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
  3. This will then open the window shown below which details all the markets available for you to trade on. From here you can add a wide variety of shares to your Market Watch window by selecting the relevant share or country and clicking Show Symbol.

An example of the Admiral Markets MetaTrader 5 trading platform showing the Symbols window.

After clicking the OK button in the Symbols window you can now view the different instruments in the Market Watch window. To view a price chart of a company’s share price, simply left-click on one of the stock symbols in the Market Watch window and drag it onto the chart area. From here you can now open up a trading ticket:

  1. Right-click on the chart.
  2. Select Trading.
  3. Select New Order, or press F9 on your keyboard.
  4. A trading ticket will open for you to input your entry price, stop loss and take profit levels and your share trading size (volume).

An example of the Admiral Markets MetaTrader 5 trading platform showing a trading ticket.

Why Buy Shares Online with Admirals?

Here are just a few reasons why you should consider buying and selling shares with Admirals:

✔️Trade with a well-established, regulated company which includes regulation from the UK’s Financial Conduct Authority.

✔️Access the fastest and most popular online share market trading software called MetaTrader which you can use on PC, Mac, Web, Android and iOS operating systems.

✔️Open an Invest.MT5 account with just €1 minimum deposit and invest from just $0.01 per share with minimum transaction fees of just $1 on US stocks.

✔️Open a Trade.MT5 account to trade CFDs and potentially profit from both rising and falling markets while trading on margin.

One of the best ways to get started is to simply test all of the features, products and services provided by Admiral Markets for yourself.

You can do this by opening a FREE demo trading account which enables you to trade and invest in a virtual trading environment until you are ready to go live! ▼▼▼

About Admiral Markets

Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

INFORMATION ABOUT ANALYTICAL MATERIALS:

The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

1. This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

2. Any investment decision is made by each client alone whereas Admiral Markets AS (Admiral Markets) shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.

3. With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.

4. The Analysis is prepared by an independent analyst (Jitan Solanki, Market Analyst, hereinafter “Author”) based on the personal estimations.

5. Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.

6. Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.

7. Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.

Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.