My 5 Top Stock Picks as Things Start To Open Up
As investors start to see the light at the end of the tunnel with the COVID pandemic — at least in the U.S. — many are taking a fresh look at the stock market. Is this your chance to snatch up some undervalued stocks? What industries are a good pick? Here are five market sectors I’ve got my eye on.
Obviously, there are a lot of people buying into healthcare giants such as Johnson & Johnson right now because of the COVID-19 vaccines. These organizations are poised for solid growth as vaccines get distributed around the world in the coming months or years.
That’s not the only reason I like healthcare stocks, however. A lot of people have been holding back from getting checkups, scheduling surgeries, etc. As things open up, I’m anticipating a surge of people visiting doctors, dentists and other providers.
Another strong sector during the whole pandemic has been technology. From digital marketing businesses to streaming providers, tech has had enormous gains. While people may not be stuck at home as much after COVID-19 is said and done, tech companies have enormous amounts of capital to invest in advances. And now that everyone from kids to grandparents have learned how to manage today’s technology like never before, you can bet the demand for Disney +, tablets and online shopping isn’t going anywhere.
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3. Airlines and Hotels
People are already getting antsy about having to sit at home. They want to travel. Your average working-class families are dying to go somewhere. Plus, with government assistance looming on the horizon, many airlines aren’t in any real risk of going under. Well-managed hotel brands are in a similar state.
4. Food Producers
A surge in shopping for fresh produce and gourmet foods means major profits for food companies. Add that to increased restaurant visits and you've got a great recipe for success. Plus, without having to worry about COVID contagions making work harder, these companies will be able to ramp up production, too.
There’s no doubt in my mind that restaurant chains are going to be big again after things start opening up. In fact, I think they’ll be one of the first signs that the market is getting on its feet again. No offense to anybody (myself included), but Americans are kind of lazy when it comes to cooking, so restaurants are high up on our splurge list. The big question is which restaurant chains are going to be strong and which may fold before the pandemic ends.
Honorable Mention: Entertainment
I’m holding my breath to see how movie theaters and amusement parks come out of all this. On one hand, Americans have an emotional connection to movies. On the other hand, the rise of movie streaming services and years of rising ticket prices has made people more hesitant to see movies at the cinema. I can see prominent theater chains rising like a phoenix from the ashes (too dramatic?), but I have a feeling it’s going to take a while.
I’m not the kind of person to put my money on risky bets. Before you invest in a stock, look at how it was managed before the pandemic and how the leadership is doing right now. This can show you which businesses are truly undervalued and likely to climb in price. Undervalued stocks can be a great opportunity, if you buy wisely and at the right time.
OK, these are kind of obvious areas. But I’d like to know some ETFs or funds (esp Fidelity ones) that address these areas and that you’d recommend. Thanks.