Post COVID stocks to watch
2 minute read
This week, the Australian Bureau of Statistics released some good economic data regarding our economy, reporting GPD growth of 1.8 per cent for the March quarter, which is ahead of expectations and much better than many other countries.
With vaccines rolling out across the world, everyone is looking towards 2022 where it is expected that life will return to something more akin to normal. So, which stocks will benefit as the Australia market and the world opens again and which stocks are likely to continue to struggle?
It is likely that commercial real estate and shopping centres will continue to struggle, as we are now in the habit of working and shopping from home, therefore, in the next 12 months stocks such as Scentre Group and Vicinity Centres are unlikely to perform given that a lot of stores have closed while other businesses may be very hesitant to open up new stores.
Travel stocks are also likely to underperform at least until mid-2022, given that restrictions around international travel are unlikely to change until well into next year.
On a positive note, online retailers should continue to do well and with less expenditure on overseas travel, Australians will continue spend on items in Australia with JB Hifi, Kogan and Harvey Norman likely to be the winners.
Australians are also more likely to favour driving holidays and weekends away over the next 12 months.
Therefore, retailers involved in caravan, camping, sporting goods, four-wheel driving and other leisure activities are likely to do well, especially as we move into summer later this year.
Another area that is likely to benefit is companies that are being supported by growing revenues from offshore such as ResMed, Aristocrat Leisure and even the troubled Treasury Wines Estates to name a few.
I will say, one thing that is guaranteed as we move closer to 2022 and that is the economy will continue to change and shift to a new way of living.
Dale Gillham is Chief Analyst at Wealth Within and international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good book stores and online at www.wealthwithin.com.au
NB: Neither Dale or Wealth Within are affiliated with any of our related portfolios.