Three winning stocks for a post-pandemic world
Professional investor Dan Lane of Freetrade selects three stocks that he thinks will keep their relevance in a changing world.
Speculating about the timing and magnitude of the British economic recovery this year is pointless – not because it doesn’t matter but because we have no control over it. Investors should bear in mind that the best companies are those using this time to ensure they can survive and even thrive despite the highly uncertain outlook for their businesses.
Managing liquidity and ensuring their relevance in a changing world will be important regardless of the scale of recovery. Here are some examples of the firms we think are eager to control their own destinies.
Unilever: an evolving leader
A real danger in 2021 is that we see the so-called post-2008 “expensive defensives” as backward-looking relics amid the scramble for technology stocks. Arguably, once the headline tech story starts to fade, the next question will be which firms can sustainably integrate tech into their models to boost their success or, at the very least, keep up with rivals and the wider market.
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
Unilever’s (LSE: ULVR) e-commerce revenues grew by 76% year-on-year in the last three months of 2020, according to its latest results. That means online sales made up 10% of total revenues. And while some firms are struggling to shift their whole proposition online (just ask the high-street fashion retailers) no-one is expecting digital Domestos. So the company might not be judged initially on its adoption of tech but it definitely knows its brands have to stay relevant in an online world. As long as it innovates and meets its consumers where and how they prefer, potential rivals should struggle to take market share from the Anglo-Dutch consumer-goods giant.
Games Workshop: shrugging off the pandemic
The pre-pandemic growth story at miniature-wargames manufacturer Games Workshop (LSE: GAW) is still intact. Lockdowns have encouraged people to take up new hobbies and given players plenty of time to paint their figurines. The firm has paid very close attention to its cash balances and, despite over 500 stores being closed, it has managed to keep up the trajectory shareholders have grown used to. A straightforward business model, committed user base, clear financials and a high return on capital employed (a key gauge of profitability) mean Games Workshop is still attractive to cautious long-term investors.
There’s a temptation to ignore stocks with higher valuations, such as Unilever or Games Workshop. But when a firm sets a promising course and takes its future into its own hands, what’s to stop it becoming even more expensive? Draw a line over Games Workshop’s V-shaped recovery and it’s as though the pandemic never happened.
Ascent Resources: an oil company worth exploring
The turnstile has stopped spinning and new management is in place at oil and gas explorer Ascent Resources (Aim: AST). A revised strategy and a higher-quality shareholder register in late 2020 could release significant value. The group became a basket case under the previous managers, not least thanks to a stand-off with the Slovenian government, but the new team has used 2020 to diversify and ensure the firm’s longevity doesn’t depend on just one project. Few rivals can boast assets like Ascent’s. With its Cuban operations in the pipeline and a more level-headed approach to negotiations with the Slovenian authorities, it’s worth another look.
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.
Dan Lane is a senior analyst at investment platform Freetrade
-
Premium Bonds winners: Who won July’s £1 million jackpot?
NS&I has announced some details about the winners in July’s Premium Bonds prize draw. Who won the jackpot, and how can you find out if you got lucky this month?
-
‘Inheritance tax insurance’ enquiries are soaring – but is it worth it?
Premiums for whole of life insurance can run to £5,000 a month to cover a £300,000 inheritance tax bill, with policies costing more the older you take them out.
-
Carson Block on short-selling and what investors should watch out for when going long
Interview Renowned short seller Carson Block talks to Matthew Partridge about his specialism and where to go long
-
Investors can buy into tomorrow’s top global technology stocks today
Opinion Anthony Ginsberg, manager of HAN-GINS Tech Megatrend Equal Weight UCITS ETF, highlights three technology stocks as he tells us where he'd put his money
-
Drinks maker Diageo gets back on its feet – should you invest?
Diageo has faced one disaster after another over the past two years. Is it finally time to buy?
-
'Seeking out quality and resilience will pay off for patient British investors'
Opinion Gary Channon, chief investment officer of Phoenix Asset Management Partners, and Kartik Kumar, member of the Investment Team, select three stocks
-
Airtel Africa is dialling the right numbers – should you buy?
Opinion Mobile phone services group Airtel Africa is inexpensive and growing fast
-
The British railway industry is in rude health – here's why investors should jump aboard
The railway industry has bounced back from the devastating impact of the pandemic and is entering a new phase of development – and profitability
-
Infrastructure investing: a haven of stable growth amid market turmoil
From booming construction in emerging markets to digital and green transitions, the infrastructure sector offers security, returns and long-term opportunities
-
Resilient and profitable performers will excel in the era of deglobalisation
Opinion James Harries, co-manager, STS Global Income & Growth Trust, selects his favourite stocks as he shares where he'd put his money