Think the Economy Will Rebound in 2021? These Stocks Would Be Big Winners

Investors went on a wild ride in 2020. Stocks were initially hit hard due to the COVID-19 pandemic but then rallied as the year went on. Stocks have seemingly defied gravity, or at the very least were able to look past the significant economic hardship the pandemic was creating…

The new year brings the promise of a vaccine, which hopefully should allow life to get back to normal and spark an economic recovery in time. Three Motley Fool contributors believe AerCap Holdings (NYSE:AER)Ford Motor (NYSE:F), and Carnival (NYSE:CCL) (NYSE:CUK) are stocks worth buying for the economic rebound.

The best way to invest in a travel recovery

Lou Whiteman (AerCap): Airlines were hit hard during the pandemic, and stocks that rely on the airlines for revenue fell along with the carriers. AerCap, which is in the business of buying airplanes and leasing them back to airlines, was among the casualties. The company’s shares lost nearly 75% of their value during the early days of the pandemic as investors feared the highly leveraged business would be forced into bankruptcy by airlines that couldn’t pay their bills.

Those investors underestimated the strength of AerCap’s balance sheet. The company was forced to take more than $1 billion in charges to writedown the value of its aircraft portfolio and deferred more than $350 million in lease payments for hard-hit customers. But AerCap still has more than $11 billion in total liquidity, as of the end of the September quarter, and $25 billion in unencumbered assets to borrow against if things get worse.

With the arrival of the vaccine, things shouldn’t get worse from here. Airlines are going to need years to rebuild their bruised balance sheets, but with each passing month we should see travel demand increase slightly as the vaccine becomes more widespread. Even if it is not enough to ensure the airlines will be profitable in 2021, it should be enough to allow them to pay their bills, which means…

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