Are you confused by all the market changes happening right now? Not sure who to invest in next? We provide a simple overview of what we think are the best stocks to buy in the next three months and why.
Disclaimer: We do not claim to provide any financial advice. All content is purely for entertainment purposes only.
Coronavirus has clouded market predictions as the uncertainty of the virus’ actions produces a highly uncertain economic outlook. Therefore, we think the best companies to invest in now are those that have weathered the storm during the 2020 lock-downs and economic hits proving their resilience to the virus. Some sectors have benefited from the virus, others will make a return in a recovery, where the most resilient have proven strong throughout. Read on to find out the sectors that should be on your watch list.
Admiral, a top UK insurance group, has benefited from the reduced insurance claims from reduced activity during lockdowns. The stock currently yields 5.4% as the company outperforms this year’s targets. Stock holders even saw an increased dividend where most dividends are becoming fewer and further between. Another UK insurance company, Direct Line have profited from the same traits, producing a prospective dividend yield at 12% of the current share price.
Demand for luxury products and services has plummeted this year as high unemployment rates and economic uncertainty dominate. However, due to this crash analysts expect a huge resurgence in 2021 for the luxury brand market. Brands such as Burberry who have high profit margins and generous shareholder payouts are ideal to invest in as the demand for luxury brands return. During the height of the pandemic they were forced to shut their doors and sales took a significant hit, but the outlook is much brighter as luxury brands are likely to make the strongest recovery.
Hotel groups such as InterContinental Hotels, who were forced to close their doors across the world, are likely to see a much slower recovery to pre-covid traffic. As one of the largest hotel groups globally, InterContinental Hotels are likely to make it through the uncertainty brought by COVD-19. Similar to the luxury brand sector mentioned above, the hotel industry is likely to make a huge return during economic recovery as people begin to travel again. Watch out for a merger with Accor, a European hotel group, as this would push the group to the largest in the hotels industry. The merger would reduce costs through economies of scale and increase returns for investors making them an even stronger investment opportunity.
The Resistance of Technology
As we switch to more online and remote activities, companies that support this are booming, Many of you have been following the movements of Amazon over the pandemic. This mega company will produce consistency and resilience in the face of COVID-19 due to its dominating and somewhat essential services.
Technology companies deserve the medal for coming through the pandemic the strongest with Apple, Alphabet, Salesforce, Zoom and Microsoft providing consistent revenues supporting the new remote working workforce. For example, Zoom has grown by over 620% since going public in spring 2019 and Salesforce’s perfect position to support the increase in cloud based storage and online shopping during the pandemic is here to stay. As companies see the benefits of working from home these tech giants, which enable productive remote working, will continue to turnover huge profits which make them a safe investment through 2021. Alphabet holds 28% of the digital ad market and is growing their cloud based sector as it continues to offer robust solutions to technological problems. You won’t see Google disappearing off the horizon any time soon…
As the stock markets are so unstable, there lies a wealth of opportunity to take advantage of this! Consider following our recommendations and investing in companies with a bright future beyond coronavirus. Keep up to date with the latest news here.