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.
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
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?
Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in credit
Corporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?
What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Six top investment trusts for smaller stocks
Liquidity constraints mean investment trusts are best placed to seize the juiciest opportunities
-
Could colour diamonds add a sparkle to your portfolio?
Diamonds of various shades never go out of fashion, says Chris Carter