Steve Clayton, Head of Equity Funds, Hargreaves Lansdown
My five stocks idea for 2021 are all characterised by high barrier to entry, long term growth opportunities, strong balance sheets and predictable recurring revenue stream.
Of course equities always carry risks and 2021 has its own challenges. And there are many questions yet to be answered; Could we see another wave of Covid-19 leading to renewed lockdowns? Will policymakers rein back stimulus packages too soon? Will rising unemployment in early 2021 prove too great for growth to really take hold?
My thoughts are that there will be an inevitable momentum created by the rising levels of immunity that vaccines will provide. As more people are either vaccinated or recover from catching Covid, the ability of the virus to inflict further damage is lessened and the more impact stimulus can have.”
Steve’s stock picks:
Vulcan Materials
The US economy is set to benefit from major stimulus under President Biden. Vulcan sell building aggregates like gravel and because these are expensive to transport, Vulccan benefit from local monopolies and oligopolies, giving them reliable pricing power in what should be increasingly active markets.
Haemonetics
Haemonetics leads the world in blood plasma technology and has a new generation of products that should boost profits at the same time as saving customers money. Looking ahead, there are over 750 new therapies that use plasma undergoing trials. As trials turn to product launches, demand looks set to grow for years to come.
Zebra technology
A global leader in RFID tracking technologies, Zebra operates a highly efficient capital-light business model that throws off cash. The pandemic has highlighted the need for more industrial automation and Zebra is a key enabler
Visa
Cash is so 2019. The switch to digital money was well underway already and Visa’s global network is a huge part of this. The pandemic has only accelerated this switch. The company takes no credit risk, it just links the citizens, their banks and the merchants they shop with together, taking a slice of the pie each time a card is used
Pernod Ricard
Pernod Ricard’s portfolio of aged spirits have huge market shares in the faster growing developing markets which augurs well for long term growth prospects. Nearer term, trading will benefit from the gradual reopening of hospitality industries worldwide.
These stock picks are not recommendations to buy, investors should consider whether these equities suit their portfolio and personal investment goals before investing.
