3 Stocks to Buy for the Second Half of 2021

This year, investors have been treated to some truly fascinating market moves. The pandemic continues to impact which sectors receive the most inflows from week to week, and the majority of rotations occurring are both quick and fierce. Although there is still uncertainty regarding the economy and new strains of the COVID-19 virus, it’s hard to get too bearish with the market continuing to hit record highs.

Keep in mind that with the S&P 500 up over 17% year-to-date, it pays to be very selective with any new positions at this time. If you are looking at potentially adding some new companies to your portfolio for the second half of 2021, several stocks stand out as potential buys. Let’s take a look at 3 stocks to buy for the second half of 2021.

Carvana (NYSE:CVNA)

Given the rise of e-commerce and how it has replaced traditional shopping in so many ways, it was only a matter of time before a company came along and created a way to shop for cars online. That’s what makes Carvana an interesting growth stock, as it operates an e-commerce platform for buying used cars in the United States. If you’ve ever dealt with the process of used car shopping at a dealership, you are probably familiar with some of the downsides. Instead of having to deal with pushy used car salesman and haggling for the deal you want, car buyers can handle everything online and find their dream vehicle thanks to Carvana’s huge selection.

The current shortage of used cars has driven up prices, which is a big plus for Carvana going forward. With the global semiconductor supply expected to be tight for the foreseeable future, there’s a good chance that the demand for used cars will remain high in the second half of 2021 since automakers won’t be able to manufacture as many vehicles. Carvana reported 92,457 retail units sold in Q1, up 76% year-over-year, and Q1 revenue of $2.2 billion, up 104% year-over-year. Although the company is still unprofitable, it’s a disruptive business that could become a powerhouse in the auto industry in the coming years.

Coinbase (NASDAQ:COIN)

With the cryptocurrency market seemingly in limbo, for the time being, there’s a good chance that Coinbase isn’t on a lot of investor shopping lists at the moment. Even with negative headlines surrounding China’s crackdown on Bitcoin, this is still a stock that could be a strong buy for the second half of 2021. Investors should note that the stock is starting to break higher after months of trending downwards following the company’s much anticipated IPO debut. If you aren't familiar with Coinbase, it's a financial technology company primarily focused on building the crypto economy, a transparent financial system that leverages crypto assets.

The company’s platform is pretty much the gold standard for cryptocurrency trading and investing, and there is huge room for growth as the company expands its products and service beyond its crypto exchange platform. Total revenue for Coinbase exploded higher in Q1 to reach $1.8 billion, up 207% year-over-year, and it will be interesting to see how the selloff in the crypto market impacts the company’s Q2 earnings numbers when they are released in early August. The bottom line here is that if the crypto market rebounds in the second half of 2021, this stock could end up being a bargain at current levels.

Johnson & Johnson (NYSE:JNJ)

This major pharmaceutical company is the type of stock you can build your entire long-term portfolio around. With a steady history of dividend growth and a very solid balance sheet, investors can rely on Johnson & Johnson to prioritize returning cash to shareholders over the long term. There’s a good chance the stock breaks out to new all-time highs during the second half of 2021, especially given the company’s strong drug prospects and a potential recovery in elective procedures that should drive earnings higher this year.

In Q1, Johnson & Johnson reported revenue of $22.3 billion, up 7.9% year-over-year and impressive growth for an established pharma giant. There’s also a chance that the market goes through some bouts of volatility in the coming months given its massive rally to start the year, which usually means money flowing into lower beta names like Johnson & Johnson. The current dividend yield for Johnson & Johnson is 2.51% and it’s a great option to consider adding for the second half of 2021.