5 Best Stocks to Buy in November 2021

US stocks bounced back in October and the S&P 500 gained 6.9% in the month and recouped the September losses. Notably, US stocks surged despite mixed earnings from Big Tech companies. What are the five best stocks that you can buy in November 2021 as the US markets look set to hit a new record before the end of the year?

Meanwhile, this week we have the all-important Federal Reserve meeting where the US central bank is widely believed to announce a timeline to trim its monthly $120 billion bond-buying program.

1. U.S. Steel Corporation (X)

U.S. Steel Corporation is a leading US-based steel producer. The stock rose sharply last week after it reported stellar earnings and also announced a $300 million share buyback program. The stock trades at depressed valuations and its market cap is just above $7 billion. The company generated adjusted EBITDA in excess of $2 billion in the third quarter.

There have been concerns about the sustainability of higher US steel prices. Also, markets expect the Biden administration to tone down the steel tariffs that President Trump had imposed. The concerns are somewhat valid. US steel prices are coming off highs. Also, the Biden administration has relaxed the steel tariffs on European Union.

X is among the best stocks to buy in November

Wall Street analysts have also been turning bearish on X stock. That said, there are a lot of factors that make U.S. Steel among the best stocks to buy in November. The company is transforming its aging steel plants and adding more minimills. These investments, while a drag on the short-term cash flows, will add long-term shareholder value. U.S. Steel should see a structural earnings improvement and a valuation multiple expansion after these investments are completed.

Also, US steel demand will get a boost if the infrastructure bill is passed. Overall, given its tepid valuations, and the reasonably bullish outlook, X looks among the best stocks to buy in November.

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2. Alcoa (NYSE: AA)

Alcoa stock has almost doubled this year amid the rebound in aluminum prices. The company is the largest US-based aluminum producer and has integrated operations. There have been several tailwinds for the company. China’s aluminum exports, which have been the nemesis for the global aluminum industry for a long, have come down. Also, Alcoa has transformed its business and exited several loss-making legacy operations. The company’s integrated operations are also a key competitive advantage.

Wall Street finds AA among the best aluminum stocks

Of the 13 analysts polled by CNN Business, 10 rate AA as a buy while the remaining three rate it as a hold or some equivalent. Its median target price of $59 is a premium of 28% over current prices. Alcoa’s strong balance sheet is among the reasons it looks like a good aluminum stock.

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3. General Motors (NYSE: GM)

2021 has been a good year for General Motors and it is up over 30%. The stock hit its post-bankruptcy high this year amid the rerating of legacy automotive companies. GM stock has come off its 2021 highs and the fall looks like a good buying opportunity. The company’s short-term outlook has been clouded by the chip shortage situation. However, it is among the best stocks to play the long-term electric vehicle transformation.

JPMorgan finds GM among the best auto stocks

Last week, JPMorgan reiterated GM’s outperform rating after America’s largest carmaker topped earnings estimates and said that the full-year earnings would be at the top end of the guidance.

“We rate GM Overweight for its best-in-class leverage to global growth markets, ongoing operational turnaround, and improving product cadence. We are attracted to the shares based on both valuation and what we see as several upcoming positive catalysts,” said JPMorgan analysts in their note.

GM’s valuations look quite reasonable as compared to pure-play EV companies. After the fall post-earnings release, GM looks among the best stocks to buy in November.

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4. Volta (NYSE: VLTA)

Electric vehicle charging company Volta went public through a SPAC (special purpose acquisition company) merger. The merger wasn’t smooth and over 70% of the SPAC stockholders opted for a redemption. This left the company $242 million short of the cash that was initially committed during the merger announcement.

Volta stock trades at less than half its peaks and is trading below the SPAC IPO price of $10. However, it has gained traction and gained sharply on Friday. The stock was also trading higher in premarkets today.

Volta is among the best stocks to play the EV story

Volta is among the best stocks to play the EV story. The EV transformation would mean billions of dollars of investments into charging infrastructure. The Biden administration has also proposed massive investments towards the charging networks. Volta would be among the beneficiaries if the charging network investments gain traction in the US.

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5. Apple (NYSE: AAPL)

Apple lost its position to Microsoft as the world’s largest company by market cap. The company has been bogged down by supply chain issues and lost $6 billion in revenues in the September quarter. However, the medium to long-term outlook for Apple stock looks positive and the recent fall from the peaks has made the stock attractive.

Buffett finds Apple among the best stocks to buy

Apple is Warren Buffett’s biggest holding by a wide margin. Berkshire Hathaway is now the second-largest Apple shareholder. Meanwhile, there have been short-term headwinds and even the iPhone 13 failed to impress several analysts. However, given the ongoing smartphone supercycle, Apple is among the best stocks to buy in November and hold for the long term.

Apple has 32 buys, nine hold, and two sell ratings. Its median target price of $170 is a 13.5% upside over current prices. Gene Munster of Loup Ventures, who correctly predicted Apple’s market cap hitting $2 trillion, expects the iPhone maker’s market cap swelling above $3 trillion.

2021 hasn’t been a good year for Apple and it is the second-worst performing FAANG. However, it was the best performing FAANG in 2019 and 2020. If you want to own a stock that even Warren Buffett loves and admire, Apple looks a good fit.

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