Go for growth: the best bets in the US stockmarket
Nellie S. Huang and Anne Kates Smith of Kiplinger’s Personal Finance choose their favourites for 2021.
Hilton Worldwide Holdings
2020 has been a year to forget for this global hotel brand, which operates in over 100 countries. Earnings are expected to have fallen by 64%. “Revenue per available room” has slumped from $102 in 2019 to $47 today. But a “cash pot” of $3.5bn gives the firm the means to weather the storm and with any luck next year should bring a swift rebound in the travel sector. “A bet on a post-Covid-19 recovery.” $93
JPMorgan Chase
Shares in this Wall Street giant have slipped by 15% this year as a weak economy and low interest rates have put the squeeze on financial services. However, the investment bank and trading division have enjoyed “record revenues” in 2020. JPMorgan Chase is a best-in-class operator and the recovery will boost earnings next year. In the meantime, the shares yield 3%. $103
This image-sharing social media app is used by people looking for some inspiration. Those stuck for interior-design ideas or deciding what new dish to cook can type in a few key words and find a gallery of ideas. The platform isn’t profitable yet but that could change soon: it has partnered with Shopify to allow advertisers to upload catalogues. Users will soon be “just a few clicks” between inspiration-hunting and purchase. $65
Tennant Company
This cleaning business makes industrial-grade floor scrubbers for clients such as supermarkets and warehouse operators. There is growing demand for its robotic floor cleaner. They don’t come cheap: $60,000 compared to about $15,000 for a human-operated equivalent. Yet more and more retailers are finding that the cost savings in terms of staff time are worth it, with Walmart ordering 1,400 last March. $62
Twilio
This communications-software specialist helps businesses stay in touch with their customers. When you receive an automatic text reminding you about an appointment or chat with a robot on a firm’s website to organise a delivery, Twilio may be behind it. Social distancing has turbocharged the rush online. Twilio’s annual sales growth could keep topping 30% for four years. $292
UPS
Soaring e-commerce demand and the complications of a pandemic are likely to expose “capacity limitations” in the global logistics business next year. That will mean price hikes, and this delivery behemoth is well placed to cash in. UPS is a two-way bet: a vaccine-enabled recovery will bring new business, but if the world takes longer to return to normal then that will just mean even more reliance on online ordering and package delivery. $167
Stryker
Stryker makes medical devices such as surgical kit and implants used for joint replacements. The cancellation of so many elective surgeries has made this a rocky year but there should be a recovery in 2021. Stryker is strong across developed markets and China is also promising. “A core position for growth-orientated investors.” $213
Wayfair
This online home goods and furniture seller is going from strength to strength. Its most recent quarterly results comfortably beat analysts’ expectations, with the group adding “ten million more active customers” than it had 12 months ago. Evidently those looking for a comfy couch no longer feel the need to try before they buy. That trend is likely to continue as traditional furniture stores close and more of the industry moves online. Deutsche Bank sees scope for a 16% rise in the stock. $301