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A year after Covid-19 reorganized global markets, led to brutal sales for many stocks and created locked-in broadcasts, a vaccine-led reaction is expected to turn the tide. for major laggards of the pandemic.
Reversals in sections that hit hardest in the early days of the crisis have helped global equity criteria rise to record levels. Such a European tour group TUI AG and slow US owner Tha Simon Property Group Inc. among those who have gathered strongly.
“There is a wide range of these laggards,” said Hani Redha, portfolio manager at PineBridge Investments, referring to airline, tourist and hotel stocks. “We are on the more bullish side that a lot more regularity will come back sooner than you might think. ”
The growing optimism among investors last months of locks and travel restrictions is also reflected in the recent underperformance of those stocks that were among the biggest winners of the whole disease. -discharged. Such Zoom Video Communications Inc. and Germany SE Delivery Hero, which went above and beyond as it was caught by the coronavirus and changed the way we all live, is now a little away from their highest values.
Where the stocks are most susceptible to the pandemic here really depends on the virus, and how quickly and effectively the vaccine is spread. Below is a look at the opportunities, broken down by category.
Stay-Home Stocks
The hottest trade in 2020 has lost some of its brilliance in recent months as investors run cheaper valuations and higher growth prospects in other industries. Shares of companies such as Zoom, Netflix Inc. and Amazon.com Inc. has been last on the general market since the end of October.
Wall Street estimates have not gone down for Zoom in months and the stock is trading around 27% lower than the high of 2020. Amazon has been flat since September, with news of increase sales and profits getting a press from analysts.
Things are similar in Europe. Delivery Hero is about 16% lower than the peak in January, and France Ubisoft Entertainment SA and online grocery UK Ocado Group Plc has fallen behind after products failed to deliver new catalysts.
But some of the region’s pandemic winners have continued to thrive, advocating a more selective approach among investors. Payroll payments Adyen NV, which rose over 160% in 2020, and Swedish online casino operator Evolution Gaming Group AB, which was almost three times last year, has continued to hit records almost every day. German food equipment company HelloFresh SE is another one that has expanded its benefits in 2021.
Worse first: 2020‘s Nikkei Stock losers are 2021‘s Winners
“We won’t go back to where we were pre-dispersed,” said Alasdair McKinnon, senior manager of the Scottish Investment Trust, naming those who have succeeded through homework, online shopping and demand for home entertainment equipment. . “But I think we’ve seen the best conditions for these businesses. ”
Vendors
Investors are promising that higher demand from online shoppers will offset the pandemic, with digital-only retailers such as Etsy Inc. and EBay Inc. in the US and Asos Plc in the UK continued to perform better in 2021.
However, according to Bloomberg information analyst Poonam Goyal, clothing retailers like it Urban Outfitters Inc. and department stores such as Kohl’s Corp. has an opportunity. recover some of the lost market share on e-commerce as source-based traffic begins to recover later in the year. Both stocks have gained over 18% this year, outperforming the S&P 500 Index, and Europe Hennes & Mauritz AB has gone up 9.9% to trade at nearly 12 months.
Boom online
US and European e-commerce stocks continue the trend in 2021
Source: Bloomberg
There is likely to be less competition for corporate establishments after some stores close well during the pandemic to benefit brands such as Primark Associated British Foods Plc said Alan Custis, head of UK equity at Lazard Asset Management LLC. It is expected that consumers will want to make it easier to hit the shops after locking restriction.
“People still have the true shopping experience, despite the fact that we know that people online have grown through this pandemic,” Custis said.
Travel & Recreation
The travel and leisure sector has made a comeback, but many organizations such as airlines and film theater chains are far below pre-release levels.
He has been one of the best actors Live Nation Entertainment, which has gained over 80% since the end of October and is trading at its highest level. Investors are promising that pent-up demand will lead to an increase in revenue and profit, although some analysts have warned that valuations may be too frozen.
In Europe, hopes of a resumption of travel and tourism have helped sections of InterContinental Hotels Group Plc and budget airline Ryanair Holdings Plc is recovering its panacea. Morgan Stanley analysts this week raised price targets for InterContinental among other European leisure stocks, noting a pent-up demand for travel.
Rory Alexander, UK equity manager at M&G Investments, continues to see so-called accommodation staying in fashion for the next two years, with consumers switching to domestic leisure activities such as bowling. Meanwhile, shares of UK pub operators have “gathered hard,” and Alexander already sees a high level of optimism in some travel and leisure stocks.
real estate
In the US, data center owners love it Equinix Inc. and Digital Realty Trust Inc. their stocks last year as demand for computing power rose. That script has shifted in recent months, with investors turning into beaten-down REITs to sell. Mall owners Property of Simon and Tha Kimco Realty Corp. both have gained more than 70% since the end of October.
It remains challenging in Europe. Analysts said recent results from Unibail-Rodamco-Westfield, the largest slow landowner in the region no positive. Peers Klepierre SA said this week that the current locking measures affecting 60% of their stores will continue it hit cash flow this year, although it showed that restrictions on buyers could ease after March. Both stocks have extended their 2020 declines this year.
Office landlords have also suffered as their properties stand empty, although rent collection has outperformed their sales-oriented peers and stocks are still expected among analysts to see stocks fall. so Alstria Office REIT and Covivio SA will rebound when economies recover.
That does not remove the risk posed by a higher proportion of people working from home, however. Developers are more likely to thrive with newer buildings that can be adapted to meet the changing demands of employers and employees.
– Supported by Sam Unsted, and Lisa Pham