We’re coming up to the final month of an absolutely unprecedented year. The year 2020 has been trying and tumultuous, and it has tested the nerve of investors. With a global pandemic, a presidential election, an oil price war and a stock market crash in the mix, the surprises have been nonstop. However, there have been some clear trends that smart investors can take advantage of. Here are my picks for the best cheap stocks to buy for December.
Each of these has delivered big gains in 2020. And each is positioned to continue delivering growth in a post-pandemic world.
All of these picks score an “A” rating in Portfolio Grader. These are straight “A” stocks — in quant score, fundamental grade and total grade.
- Etsy Inc (NASDAQ:ETSY)
- iRobot Corporation (NASDAQ:IRBT)
- Logitech International SA (NASDAQ:LOGI)
- Shutterstock Inc (NYSE:SSTK)
- Stamps.com Inc (NASDAQ:STMP)
- Yeti Holdings Inc (NYSE:YETI)
- Zoom Video Communications Inc Class A (NASDAQ:ZM)
Best Cheap Stocks for December: Etsy (ETSY)
E-commerce companies are among the biggest beneficiaries of the pandemic. When your local stores are closed because of a lockdown, you don’t stop shopping — you go online.
Here’s My Secret $1.8 Million Crypto Script
My team of venture capitalists already used this script to pocket $1.8 million… from a single cryptocurrency trade!
Now I’m revealing this secret for the first time ever.
Etsy has seen its sales boom as a result. Many of its vendors were able to pivot early to selling cloth masks, and, in August, it was reported Etsy vendors had sold $346 million worth of masks alone. Those kinds of numbers have propelled ETSY stock to 250% growth so far in 2020.
However, Etsy is about a lot more than handmade cloth masks. It’s the online platform for selling handcrafted goods. Look for a big holiday quarter when people who are looking for unique gifts, but facing cancelled craft shows, shop online instead. And once they shop on Etsy, chances are they’ll keep coming back. That growing base of vendors and customers is a big reason why ETSY stock is also on my list of best growth stocks under $1,000.
No one likes vacuuming or mopping floors, and that’s why I like iRobot. In 2019, the global robotic-vacuum market was worth $8.19 billion. It’s projected to hit $46.75 billion by 2027. And iRobot — an American company led by MIT graduates and veteran space/military robot designers — dominates this market.
As robotic vacuum cleaners have evolved from tech toy to something you can buy at any hardware or department store, competition has moved in. Cheaper Chinese knockoffs abound, especially online. However, iRobot still holds a 52% share in the market the company helped to pioneer. It was hurt by the broad tech-stock selloff in September, but IRBT stock has still posted impressive growth of more than 50% so far in 2020. I think that’s just the start for this company, with its robotic vacuums getting better with every generation.
I am a big fan of Logitech. Most people know the company for its PC accessories, like keyboards, mice and webcams. The company has definitely benefitted on this front from the pandemic’s work-from-home and remote-learning trends. Even in late summer, Logitech webcams remained in short supply. That’s a big reason why LOGI stock has posted a big gain of 87% so far this year.
However, the company is about a lot more than the Logitech brand and the PC market. Logitech also owns brands that are well-respected choices in other popular markets.
Video gamers buy Logitech G controllers, keyboards and headsets. When they are competitive, they’ll shell out for Logitech’s premium ASTRO series. Streaming music is huge, and Logitech has built up a big presence here as well. The company owns Ultimate Ears (UE), a leading brand for wireless speakers. Its UE brand makes custom-molded earbuds that music fans will pay up to $2,300 a pair for. Fitness enthusiasts love Jaybird earbuds — another Logitech premium audio brand.
A decade ago, Logitech stumbled as the PC market weakened. However the company’s expansion beyond that market put LOGI stock back in growth mode over the past five years. I fully expect that growth to continue.
We all know the story of how the pandemic boosted streaming video viewership. However, that’s not the only big media-consumption story of 2020. We’re all spending far more time online in general. The average is now up to nearly seven hours a day consuming digital media. Much of that is reading through websites in search of news about the election, the novel coronavirus, wild fires, product reviews, how-to guides for home renovation and the stock market.
To help keep that content eye-catching, websites use photographs. And that’s where Shutterstock comes into the picture. The company licenses images and video clips. It offers per-use pricing and subscriptions.
In the third quarter, Shutterstock reported the number of subscribers to its service had increased to 255,000 (compared to 184,000 in Q3 2019). Adjusted earnings per share of 80 cents blew past estimates, and was nearly 176% higher than last year. SSTK stock avoided the September tech-stock selloff altogether, and is now up nearly 60% so far in 2020.
We’ve all been shopping online instead of in person. Gatherings of family and friends have been curtailed. That’s impacted traditional gift-giving occasions like birthdays, weddings and graduations. Not all e-commerce companies ship using couriers — many prefer to use the USPS, which offers less expensive shipping options.
So it makes sense that Stamps.com would be having a killer year. Use of its online postage service has gone through the roof in 2020, and it shows no sign of letting up. In the third quarter, that amounted to a year-over-year revenue increase of 42%.
At this point, STMP stock is up about 120% so far in 2020. But, that’s after taking hits from the tech-stock selloff in September, and a post-Q3 earnings drop (despite that impressive revenue increase and raising full-year guidance). STMP came within touching distance of $310 in August before the slide began, so at the current $185 level it’s a very tempting target.
If you spend any time camping, hiking, boating, hanging out on the beach, barbecuing or being outdoors in general, you’re familiar with Yeti. The company helped to kick off a growing trend for premium versions of what had once been pretty basic products — coolers, mugs and water bottles. You’ve probably seen the Yeti logo everywhere as influencers fish an ice-cold beer out of their $500 cooler (some Yeti coolers can cost $1,300), or sip drinks in a $25 wine tumbler.
Yeti expanded its reach by adding products branded with the logos of popular sports teams, and growing its lineup to include products like dog bowls, blankets, clothing, chairs and more. When it comes to aspirational outdoor gear, Yeti is it.
The pandemic helped to boost the popularity of outdoor activities, and that meant more demand for Yeti gear. The company posted Q3 earnings at the start of the month showing that demand hasn’t slowed. The $294.6 million in sales for Q3 was up 29% year-over-year, and the company beat revenue estimates for the fourth straight quarter. Earnings of 61 cents per share also beat estimates.
YETI stock is up 81% so far in 2020. And with the boost that outdoor activities like hiking and camping have had from the pandemic, I don’t see that momentum slowing any time soon.
Finally, the poster child for the work-from-home pandemic boost: Zoom. You know the story here. Remote work and remote learning has meant a huge increase in the use of video conferencing to stay connected. That has boosted Zoom from a bit-player in the tech world to a heavy-hitter.
Up until mid-October, when it hit an all-time closing high of $568.34, ZM stock had posted an amazing gain of 735% for the year. It’s slipped since then, and Zoom shares currently trade in the $475 range. However, even with a coronavirus vaccine and the prospect of a return to normalcy, Zoom is not going to fade away. Many companies have already indicated that working from home will become a permanent option for staff. Those Zoom meetings are also going to be a regular part of the new normal for many workers.