My top picks for 2021 come out of the small-cap portion of our annual “Best Months” Stock Basket, explains Jeffrey Hirsch, a seasonal timing expert and editor of Stock Trader's Almanac.
Following our “Best Months” Seasonal MACD Buy Signal on November 5, 2020 we ran our fundamental screens and published our picks on November 12.
Avid Technology (AVID) was added to our newsletter portfolio on November 13, 2020 at 10.69. LeMaitre Vascular (LMAT) was also added to our newsletter portfolio on November 13, 2020 at 37.29. Neither is considered as a conservative idea.
The Covid-19 induced shutdown and bear market last year did influence and skew traditional metrics like PE and price-to-sales ratio as many companies experienced sharp drops in Q2 results and brisk rebounds in Q3.
We narrowed down the universe of nearly 8,000 U.S. traded stocks for those with a measurable market cap and decent liquidity. Then we winnowed the list down to only those stocks with relatively low price-to-sales and price-to-earnings ratios with a few exceptions.
From there we searched for stocks that appeared to fare well in Q2 and Q3 based upon sales and earnings. A special nod was given to stocks with a below average number of analysts following them.
Avid Tech is at the forefront of the digital media revolution and boosts a stable of industry leading software solutions and partnerships. As the economy began to recover from the Covid-19 downturn folks ramped up digital media production and publishing and Avid revenue and paid subscriptions picked up.
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Avid’s open and efficient media platform and comprehensive tools are being used to create, produce, distribute and monetize feature films, television, music recordings and live events.
LeMaitre Vascular took a bit of a sales hit in Q2 2020 as the Covid-19 lockdown halted most non-emergency medical procedures and elective surgeries.
But this small, yet leading global provider and innovator of peripheral vascular disease treatments and solutions barely skipped a beat and continues to grow by expanding the reach of existing products and developing and acquiring other specialty vascular product concerns.
Meanwhile, our Top Pick for 2020 were rare and rheumatic disease medicine maker Horizon Therapeutics (HRZN) — up 102% last year — and semiconductor firm Qorvo (QRVO) — up 43%.
Both came through our fundamental stocks screens in October 2019 with flying colors. Then they made it on to our 2019 “Best Months” Stock basket. Both were sold from our newsletter tracking portfolio in 2020.
