It has again come to a BRAND NEW YEAR of HUGE potential GROWTH !!
ROCK & ROLLER-COASTER IT HAS BEEN FOR 2020 !!
ARE YOU READY FOR 2021 ?
IF SO, WHAT ARE THE SECTORS THAT MAY POTENTIALLY THRIVE?
We have witnessed with our very eyes in 2020. Companies who refused to, or failed to change their business models, and take the big step for digitalisation, has been largely outperformed by their industry peers.
In terms of the macro-environment, there is no doubt regarding online network, digitalisation, cloud computing and payment gateways will continue to thrive.
In 2021, pandemic issues still linger around the global sites, and there are new strains being discovered recently. Even with the first blast of vaccines, the progression takes time.
This also signifies that people will still tend to stay home, and travels are highly restricted and limited still in the coming months.
Again, with the habitual lifestyle the majority of us built in 2020, doing things online have proven to be an efficient way of getting things done – Online shopping, online courses, webinars, meetings, overseas family gatherings. People are already accustomed to the new norms of life.
E-commerce platforms such as BABA, JD, PDD are having their best years. Social media companies are doing great as users are becoming more active, and tend to spend more online, which attracts significant amount of revenues from ads running companies or individuals.
SHOP, provided an one-stop solutions for any layman like you and me, to setup our very own online store in just a matters of minutes to hours.
PINS, for example, which was IPO-ed in 2020, improved their interface, taking advantage of human behaviours or laziness, enhance the abilities of product image searches and links to help online retailers.
CRM, provides a comprehensive customer relationship management systems for companies. CRWD, provided cybersecurity solutions for many big tech players. NET, allow users to load the online contents faster, and prevent DDoS attack for sites.
Point is, internet and online trends are here to stay. With the huge surge in online transactions, entertainments, cloud storages, it is obvious to see that cyber-securities, content delivery efficiencies, will be huge focal points for many digital companies. Big data era calls for heroes that can deal with data analytics.
PLTR, a very hot stock during the IPO launched, will be under my radar.
LMND, an insurance company that claims to build its system ‘Blender’ from scratch with one common ‘language’, so that no mess third-parties issue would occurred and provide more clarity and efficiencies while working on their AI based platforms.
It has been viewed as a market disruptor for the financial sector. Insurance is a huge market and is not a winner takes all market. By capturing a significant portion of market cap, LMND has a very huge upside to grow, from where it is standing today.
With the excessive amount of money in hand, and with the lack of choices to travel around the world, people will most likely think of ways to maximise their money effort – to spend more, or to invest more.
Luxury goods and technology products, AAPL, has always performed the best during Q4. This is not a surprise, as the new iPhone tends to launch around this timing. It is also a good strategy by the company as consumers always like to spend more during the festive seasons (e.g. year end, Christmas, Thanskgiving, New Year). iPhone 12 is expected to hit revenue target. Apple new M1 chips signify something big is brewing.
In the book ‘The Four” written by Scott Galloway, he mentioned that Apple is the only big four tech companies that has proven to survive and thrives under a ‘2nd generation’ leadership (others include FB, GOOG, AMZN). It is most likely to survive and continuous to disrupt the market in the long term.
Looking for the future, many eyes and expectations are falling on electrical vehicles and autonomous driving. Clear enough, TESLA, as the market leader in this field, has been flying ever since the inclusion to S&P500 without any signs of pulling a break. Elon Musk, CEO of Tesla, has officially surpassed Jeff Bezos, CEO of Amazon, to become the NO.1 in the world.
Other EV companies, NIO and XPENG, just to name a few, are rising together with the giants also.
Thanks to Musk’s open source patent strategies, EV industries are performing and developing in a rapid speed.
With that said, people are moving away from oil, going into green technologies and powers. We can see energy-related industries that are focused on oil has not been doing well (pandemic issue mostly, plus the losing trend which will be replaced by possibly solar energy or hydrogen fuel cells).
On the other hand, companies who are working on green related technologies, or industries that are supporting electric vehicles (LIDAR, Solar cells, Hydrogen cells) have been gaining tractions and shooting up to the skies. US governments are also foreseen to support and backup these technologies in the coming years.
Enphase Energy (ENPH), for example, has joined in S&P500 during the start of 2021. Focusing on solar PV, I’m expecting price to move further up as long as solar energy development is backed up by government agencies and fundings.
For Tesla investors, remember Solarcity is a subsidiary company. So when you invest in Tesla, you are doing both good things: help to fund electric vehicles and solar energy developments.
Healthcare industries which are led by forward-looking management teams, are expected to strive, too, but perhaps not so soon. Genomics and gene therapies are big topics of the ‘new age’ in healthcare and medicine. ARK investment, for example, has an ETF (ARKG) specifically dedicated to companies working in this field.
CRSP, EDIT, for examples, are companies who deal genomic modification, gene editing and hopefully provide us lights for future gene therapeutics.
TDOC, on the other hand, provide us a glimpse on how future medicine, nursing, consultations and healthcare services may be conducted in virtual.
BIG BOYS like FANG, are going to perform well, and I believe there is no one doubting their capabilities to do so.
Semiconductor industries, for example, TSM, have strong fundamentals, huge market demands, moving in the same trend as technology development and enhancement continues to move ahead. QCOM has showed their ability to outperform their peers too during 2020. However, note that the divorce between AAPL and QCOM is coming ahead.
To sum up, the above-mentioned companies, who have strived well throughout 2020, are going to continue on the frenzy and have a blast, if not better, as long as the overall environment fundamentals stay the same.
2020 was a year of challenge, to see which companies are ready to brace through the storms. We can now see clearly which companies are ready to perform well for the new norm era, and well-equipped for digitalisation to happen. I have also performed a quick analysis on my Top 21 companies to watch in 2021. Download it for FREE with the button below. Let’s all have a prosperous 2021.
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This post here is based on my personal analysis and findings.
It does not serve as an investment advice, and is not a recommendation to buy or sell.
Please do your own homework before starting any form of investment.
Use the content at your own risk.