It Seems Now Would Be a Pretty Good Buying Opportunity

By: Andrew McShane

The economy is gearing up for a pretty big revival.

Last week, President Biden signed the American Rescue Plan, a historic legislation worth more than $1.9 trillion dollars.

We call this package historic because America will now have spent $5.5 trillion dollars to combat the COVID-19 Pandemic. To put that in perspective, on an inflation-adjusted basis, America spent the equivalent of $4.8 trillion dollars fighting World War II.

The package remains widely popular with the American public, garnering a 76% approval rating. When you look at the proposals in the package, it is easy to understand why.

  1. Healthcare Benefits – For a family of four with $85,000 in household income, and $25,000 in healthcare costs, their federal subsidy will go from $0 to $18,000. This means that their healthcare costs will fall from $25,000 out of pocket to $7,000
  2. Direct Payment Stimulus Checks – People making $75,000 or less will receive $1,400. Couples making $150,000 or less will receive a$2,800 check. Those with children will receive $1,400 per child.
  3. Child Tax Credit – Parents with children, will now receive money on a monthly basis. Parents with kids age 7-17, will receive $250 monthly, per child. So, if you have a 12 year-old, a 6 year-old and a 3 year-old, you will receive $800 per month from the government.

There is no denying that this is an expensive package. And there will be plenty of time to discuss how we are going to pay for it.

However, this stimulus is set to kickstart the economy and keep it humming for years to come. And with the recent pull-back in the market and a predicted GDP growth of 7.1% this year, it would seem that now is an excellent time to buy into the market.

Two Stocks that Present Excellent Buying Opportunities for 2021

The buying opportunities that we are looking at today take advantage of the pending economic growth and the recent pull back in Clean Technology.

The First Buying Opportunity is SUNRUN (RUN)

Sunrun is the largest residential solar installer in the United States. The company recently completed a merger with Vivnt Solar in October which brought its total number of customers to more than 500,000 and is now worth $22 billion.

Morgan Stanley also deemed Sunrun a “Best in class rooftop solar and storage developer, with significant value already accrued from the current customer base and strong growth in Net Earing Assets.”

The buying opportunity here presents itself due to the recent pull-back in clean technology stocks. The pull-back was long due, with clean tech stocks on a tear since last year.

Sunrun now becomes a very attractive buy as it’s trading nearly 40% off its 52 week high back in Jan and has shown an ability to sustain cash flow, expand into new markets, and present broad future growth opportunities.

The Second Buying Opportunity is Southwest Airlines (LUV)

A combination of the economic stimulus and a massive, pent-up travel demand make travel stocks an extremely attractive buying opportunity.

Goldman Sachs and JPMorgan are raising their expectations for travel this year and hiking price estimates on a handful of airlines and cruise lines. These two groups were punished last year during the pandemic, when demand for travel drying up to nothing.

However, recent uptick in TSA demand, easing of government restrictions, and the vaccine rollout have sent Airline stocks surging this week.

February has also seen the highest uptick in hiring in the recreation in travel sector. For the past year, hiring has lagged all other sectors, including retail. In February, we saw a 30% jump in hiring in the travel sector, the biggest jump in a year.

buying opportunity travel


And Southwest Airlines is in a position to capitalize on all of the recent, positive travel trends. Southwest reported on Monday, that March operating revenue was better than expected, down just 15-20% vs. 20-30% as expected. And Goldman Sachs recently increased Southwest’s price target from $47 to $69.

In Summary: 

As always, do your due diligence when it comes to investing and make sure you calculating your risk. But with explosive economic growth on the horizon, certain sectors of the market looked poised for serious growth. These two opportunities could be part of it.



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