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Industries to Watch: Sectors Set to Produce Growth Stocks in 2021

May 27, 2021
by Leon Marshall,

Article Recap

Lithium batteries, electric vehicles, water purification, vegan products, 5G technologies - these are all sectors set to produce growth stocks in 2021.

Last year was not the best in many instances. But despite this, there has been an increase in stock values in several growth industries throughout the months, including the first quarter of 2021. Despite the volatility and a range of other economic factors during that time frame, there was an increase in the amount of stocks in several key industries. There are notable rises in the shares of the companies that produce lithium batteries, electric vehicle (EV) companies, those in the water purification sector, vegan startups and 5G technology companies. Here are the growth stocks you should be watching if you look to begin your trading journey or spice things up a notch by expanding your portfolio.

Lithium Battery Stocks

Electric vehicle battery.

Lithium stocks are in high demand, but why exactly is that? It is because lithium is crucial to fueling the battery market for EVs. The general transition towards vehicles that are environmentally friendly, as well as green initiatives, are among the reasons that lithium is one of the top commodities traders choose to stick to. A report by the U.S. Geological Survey has pointed to the 70% lithium consumption on a global scale being produced by batteries alone.

Furthermore, predictions by professional service company Deloitte and the American Lithium Corporation state that the lithium markets will continue to rise, suggesting big profits for long-term investors between 2023 and 2030. As a lithium-ion battery maker, QuantumScape (NYSE: QS) has experienced gains of over 350% for the past year. Lithium producer Sociedad Quimica (NYSE: SQM) now holds a share price at more than double the amount over the same period. And in Australia traders and experts are expecting that Corella Resources (ASX:CR9) could become one of the most stable Australian stocks.

The Initial Public Offering, or IPO, is the process of a private company or corporation offering its shares to the public as stocks. A recent example of a company that did this and experienced a skyrocketing of its share prices, was the Australian-based company Global Lithium Resources (ASX: GL1). Aside from that, four of the lithium batteries stocks to consider right now are Albemarle Corporation (NYSE: ALB), EnerSys (NYSE: ENS), Lithium Americas Corp (NYSE: LAC), and Piedmont Lithium (NASDAQ: PLL).

Albemarle Corporation

This chemical manufacturing company has three key divisions, one of which is concentrated on lithium. According to the Albemarle Corporation itself, it is among the top providers, if not the one at the very top, of lithium for EV batteries worldwide. It has reported a net income of $95.7 million for the first quarter of 2021, an increase of 10% compared to last year. This was above Wall Street’s expectations. It may be worth watching ALB as a viable position in the lithium industry, should it continue to maintain its trajectory.

EnerSys

EnerSys is a reserve power and motive power batteries manufacturer and distributor. It also leads in battery charges in accessories along with integrated systems and services. ENS stock has risen up 70% over the year and a majority of that has come from its energy systems.

Lithium Americas

Lithium Americas Corp has enjoyed gains of over 350% for its activities as a resource company with a focus on two lithium projects that have been going at full speed, despite the safety protocols in place for enhanced measures against the coronavirus.

Piedmont Lithium

Piedmont Lithium is an emerging lithium mining company. Its aim is to become a domestic supplier of chemicals used for lithium battery manufacturing for the US. Piedmont’s stocks have increased by over 120% in a year and now that it is scaling up its mineral resource in North Carolina it is about to be the only company in the US that has done so.

Electric Vehicle Stocks

As mentioned previously, the shift towards battery-powered cars requires lithium. Along with the batteries themselves, an increase in the EV stocks is on the move as well.

A blue Tesla EV in a showroom.

Everyone’s attention has been directed towards the next Tesla. But the ongoing global chip and semiconductor shortage have been an obstruction for the sailing carmakers.

The electric car shares to watch in 2021 are mainly four companies. These are Nio Inc (NYSE: NIO), Tesla Inc (NASDAQ: TSLA), ChargePoint Holdings Inc (NYSE: CHPT), and Fisker Inc (NYSE: FSR).

Nio has already seen its upcoming as the Tesla of China, with its recent earnings report confirming some big moves for the first quarter of 2021. The company has shown volatility on the market. Its stocks were as high as $62 in February and declined to $35 in April.

Despite the ongoing pandemic situation, Nio has soared to new highs in both revenue and deliveries. It has the potential to grow and has shown strength in the industry, with a staggering 481% increase in revenue, reported to be $1.21 billion, and a 36% jump in gross profit since last quarter, to that of $237 million. Not many companies manage to turn loss into profit as Nio has done.

If we look into the rest of the companies, it becomes clear that they have also recorded improvements almost across the board and continue to grow their stocks with them. These electric car stocks continue to become more and more prevalent on the market of EV, and investors have set their sights on them, for good or bad.

Water Purification Stocks

Scientific worker taking examples of water.

Life as we know it may not exist without water, one of the basic necessities of man. This is why water could turn out to be the most valuable commodity on Earth. Companies that give investors exposure to the water business can be water utilities or more notably, water purification. Data from the top exchange-traded funds for the water industry gives a look into the water purification growth stocks to be watched during this year.

The best performing of them is the Consolidated Water Company (CWCO). It has been in the water business since 1973 and has found its own niche during that time. The company uses a desalination process that purifies water and helps bring it to regions where naturally potable water is scarce or non-existent. CWCO has grown to more than $76 million in annual revenue. Its metrics have been improving for the past decade. The retail segment suffered a decline due to last year’s hit in the tourism industry but has now begun to rise continuously.

Vegan Startups Stocks

Early stage private investments can usually be accessed only by accredited investors or in-crowd people. However, with the rise in popularity of equity crowdfunding platforms, now anyone has the opportunity to invest in startups that can help shape the future in an ethical and plant-based manner. A portion of the sustainable and vegan startups that are set to produce growth stocks in 2021 are listed below.

The five vegan startups that have drawn the most attention thus far are:

  • Beyond Meat (NASDAQ: BYND),
  • Else Nutrition (OTCMKTS: BABYF),
  • Maple Leaf Foods (OTCMKTS: MLFNF),
  • Burcon NutraScience (OTCMKTS: BUROF)
  • The Very Good Food Company (OTCMKTS: VRYYF).

Beyond Meat is the company currently at the heart of plant-based revolution. It has been around for a long time, to the extent that it has its own pedigree status, and chain restaurants like Carl’s Jr and Del Taco have sold its “meat”. In the past, its stocks have seen big rises. During the pandemic, it saw an exponential growth of over 140% that it is now steadily starting to work towards once again.

5G Technology Stocks

Cellular communications tower for mobile phone and video data transmission, at sunset.

The 5G technologies are set to change the world we live in. 5G-capable mobile devices are becoming closer to supercomputers than smartphones. Reason being, they no longer rely on internal computing power, but instead communicate with connected land-based computers in real time. In other words, investing in the 5G stocks that shape our quantum future may be worth taking into consideration.

At the current juncture, Ericsson (NASDAQ: ERIC) is at the helm of the 5G technology in the Western world. Nokia (NYSE: NOK) is not far behind. However, it’s China that dominates 5G. Traders will have to wait and see who the one moving the ball farthest will be.

Smartphone companies like Samsung (OTCMKTS: SSNLF) and Apple (NASDAQ: AAPL) are also strong in the game of 5G. The former is producing a large portion of the gear required for building 5G networks. The latter is an example of a healthy ecosystem that will benefit from the increase in speeds.

Other 5G technology stocks to trade in 2021 are cell tower real estate investment trusts like American Tower (NASDAQ: AMTX) and Crown Castle International (NYSE: CCI). At this point in time, 4G towers have the upper hand over range. Аs a result, telecommunication companies have to compensate in quantity.

That’s not all, as data usage should be considered as well. AT&T (NYSE: T), Verizon (NYSE: VZ), and T-Mobile (NASDAQ: TMUS) will likely see a rise in demand, with consumers hopping over to mobile-based ISPs (internet service providers) from their current land-based ones. Those behind the manufacturing process of chips will also see a growth in stocks. Companies such as Intel (NASDAQ: INTC), Qualcomm (NASDAQ: QCOM), and Qorvo (NASDAQ: QRVO). These companies will be splitting the workload based on the specific consumer-grade demand for concrete devices.

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