5 Top Stocks to Buy in November
November 1, 2021
Stock market bears in 2021 are becoming as rare as a snow leopard; investors know they exist but you rarely see them on camera.
For the bears, October was one more month to forget. That’s because the S&P 500 hit yet another record high as the third-quarter earnings season kicked off in earnest.
In fact, October was the best month for US stocks so far in 2021, and the best since November last year. The benchmark S&P 500 Index saw a 6.9% gain over the month to take its 2021 gain to a robust 24.5%.
Meanwhile, the Nasdaq Composite Index had another strong month, outperforming the S&P 500 to notch up a 7.2% gain. Its year-to-date gain at the end of October came in at 22.1%.
So, what can investors be accumulating when everything seems to be rising? Well, no matter what the market environment, there will always be great companies out there to buy.
Here are five solid stocks that investors can buy and hold in November.
Although search giant Google is officially known as Alphabet Inc (NASDAQ: GOOGL), its search engine continues to be a driving force the group’s revenues and profits.
In fact, in its third-quarter earnings released last week the company saw its revenue increase by 41% year-on-year to US$65.1 billion – an impressive feat for a company the size of Alphabet.
Perhaps the highlight was YouTube’s increasing penetration in the Connected TV space. The video service now has a strong paid subscriber base and in the latest quarter, it generated US$7.2 billion in advertising revenue.
That was up from US$5 billion in the same period last year and demonstrates how sticky of a service YouTube is becoming.
Alphabet shares are up a whopping 71% so far in 2021 but this is a business that is continuing to find ways to keep growing its revenue streams.
Another “Big Tech” name that should be on November shoppers’ list is Microsoft Corporation (NASDAQ: MSFT).
When we talk about stocks that continue to “win”, just like Alphabet, then Microsoft is on that list. The company’s fiscal first-quarter FY 2022 earnings blew expectations out of the water with revenue coming in at US$45.3 billion – up 22% year-on-year.
Similar to Alphabet, Microsoft has a bevy of emerging businesses, including the under-the-radar LinkedIn service.
The networking site has an incredible 744 million members worldwide and saw its ad revenue increase by 42% year-on-year in its latest quarter.
Revenue for LinkedIn for the quarter was US$3.1 billion, meaning the service alone has an annual revenue run rate of over US$12 billion (see below).
While shares of Microsoft are up 52% year-to-date, investors are still getting a high-quality business with a long growth runway ahead of it.
Sources: Microsoft earnings reports, SEC filings, and GeekWire.com
Twilio Inc (NYSE: TWLO) is best-known as a cloud communications platform that allows software developers to programmatically build communication tools on top of existing functions using web service application programming interfaces (APIs).
For example, companies such as Uber Technologies Inc (NYSE: UBER) use Twilio’s services to communicate with passengers on the status of their rides.
Twilio’s third-quarter revenue came in at US$740.2 million, up 65% year-on-year. Meanwhile, its dollar-based net expansion rate (DBNER) topped 131% meaning existing customers continue to spend mor eon its platform.
However, shares fell over 15% in response to earnings on weaker-than-expected guidance and news that its COO – George Hu – was leaving the company.
With Twilio shares now down over 12% so far this year, this could be an opportunity for long-term investors to pick up shares in a strong business – at a discount.
It seems that streaming provider Netflix Inc (NASDAQ: NFLX) can do no wrong. Shortly after its hit show Squid Game took the world by storm, Netflix announced its third-quarter earnings.
Growth for the streaming giant was impressive, particularly in the all-important international markets where it continues to find new subscribers.
Squid Game also became its most-streamed show ever with 142 million households tuning into the dystopian Korean series.
With revenue hitting US$7.5 billion during the quarter, and management guiding for nearly 8.5 million net new subscribers in the current fourth quarter, the future looks a bright as ever for Netflix.
Chip giant Advanced Micro Devices Inc (NASDAQ: AMD), also known as AMD, has been a remarkable turnaround story ever since CEO Lisa Su took the helm in late 2014.
Shares over the past five years are up over 1,700%, illustrating to investors how this semiconductor player has grown into such an integral part of the ecosystem.
AMD has done this mainly by focusing on chip design and efficiency, as well as by going “fabless” – essentially outsourcing the manufacturing of its chips to foundry giants such as Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM) (TPE: 2330).
That has allowed it to overtake slow-moving incumbents such as Intel Corporation (NASDAQ: INTC) and the results speak for themselves.
For its latest third-quarter earnings, revenue was up 54% year-on-year to a record US$4.3 billion. More impressively, gross margin hit 48% and that was an increase of 400 basis points year-on-year.
With AMD’s GPU chips becoming increasingly crucial to everything on the bleeding-edge of tech, AMD stock is one to hold for the long term.
Investing with the next decade in mind
As ever, investors should look at purchasing stocks to hold for a minimum time horizon of five years.
That way, we can be sure we are shareholders in businesses that are best-in-class and that can perform consistently.
With Alphabet, Microsoft, Twilio, Netflix and AMD, investors can be safe in the knowledge that these businesses will likely be bigger – and better – five years from now.
Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips owns shares in Microsoft Corporation and Twilio Inc.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.