Three US large-cap stocks that promise outsized returns
The fundamental long-term outlook for high-quality US large-cap stocks remains positive, says professional investor Timothy Parton of the JPMorgan American Investment Trust. Here, he picks three of his favourites.
As the world remains gripped by the pandemic and the presidential election draws near, many investors are struggling to see beyond immediate economic and political uncertainty. Nevertheless, the fundamental long-term outlook for high-quality US large-cap stocks remains positive.
Many of the themes that dominated the US market before the pandemic remain evident today: growth is still outperforming value, tech is rallying and financials are being left behind. As stockpickers, we continue to focus on individual quality companies that we think can weather the economic storm, however long it may last.
That means looking beyond immediate market noise and having conviction in firms with good management who are committed to strong balance sheets, while also finding opportunities that are out of favour in the current climate.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Qualcomm: mobile chips look tasty
Next-generation technology has been one of the biggest stories in US markets for 2020. Over the last six months, we have added to our holding in technology firm Qualcomm (Nasdaq: QCOM), which specialises in intellectual property, semiconductors, software and wireless technology services.
Not only are Qualcomm’s fundamentals strong, but we also see a promising long-term outlook as we move towards 5G infrastructure globally. The semiconductor company is often overlooked owing to its historical dependence on mobile-handset growth. But the initial deployment of 5G networks has started to show through in Qualcomm’s results this year and this is a trend we believe is in the early innings. So, we think the best is yet to come at the world’s largest mobile chipmaker.
Amazon: the clear leader in online retail
Online sales comprised just 1% of overall retail sales in 2000. By 2019, this figure had reached 11%, with e-commerce outpacing the overall market by 15% over the past five years. The pandemic has accelerated the trend: Mastercard’s data shows us that since the outbreak of Covid-19, e-commerce has come to comprise 22% of retail sales.
Yet in the US market, the top-ten online retailers account for 60% of sales. We continue to trust in Amazon (Nasdaq: AMZN), which remains the clear leader in this sector. It is seven times larger than its nearest competitor, Walmart, and has built a strong distribution system. Furthermore, the business is seeing huge growth in its cloud business, both through its own systems and thanks to providing cloud technology to other big tech names, such as Netflix.
PayPal : the preferred payment processor
While the US financials have been out of the limelight this year, we believe there are huge opportunities here, particularly beyond the core banks. While many financial-services firms are struggling in the low interest-rate environment, technology-enabled companies, such as those in the payments sector, are set to grow strongly. PayPal Holdings (Nasdaq: PYPL) is at the intersection of e-commerce and digital payments.
For many of us, our first awareness of PayPal is when we are purchasing items on eBay, but today PayPal has leveraged its first-mover advantage to become the preferred and trusted payment-processor for e-commerce. It is accepted by over 20 million merchants and has 300 million active users. The company delivers robust organic growth.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Timothy Parton is investment manager of the JPMorgan American Investment Trust
-
Global equities that should weather the stockmarket's storms
Opinion Alex Illingworth of Goshawk Asset Management highlights three diverse opportunities in global equities despite a turbulent landscape
-
8 of the best houses for sale with dining terraces
The best houses for sale with dining terraces – from an Arts & Crafts property in Great Missenden, Buckinghamshire, to a duplex apartment in a garden square in Kensington with a decked roof terrace
-
Global equities that should prove resilient to the stock market’s storms
Opinion Alex Illingworth of Goshawk Asset Management highlights three diverse opportunities in global equities despite a turbulent landscape
-
FRP Advisory Group – a bargain in a booming market
FRP Advisory Group's past and future growth isn’t reflected in the company’s valuation
-
European funds: investors have 'a luxury of choice'
A series of mergers is bringing consolidation among European funds, but investors should benefit, says Max King
-
US stocks are more expensive than ever after Trump's tariffs
We don’t need to second-guess the effect of Trump's tariffs to think that the rest of the world offers better value
-
How to use SAYE and SIP schemes to multiply your money
Employers’ savings or share-incentive plans like SAYE and SIP schemes can help top up your pension
-
Sizzling sales at Sysco – should you invest in this US food supplier?
The American food distribution group Sysco is expanding rapidly worldwide and is still reasonably valued
-
Where investors can find value now
Opinion Active fund managers and blue chips on both sides of the Atlantic look appealing, says ByteTree’s Charlie Morris
-
How to balance growth and income when investing
Dividend-paying stocks have beaten the market. That doesn’t mean that income funds will do best