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Companies benefiting from stay-at-home restrictions

 

Companies benefiting from stay-at-home restrictions

In this week’s video insight Roger discusses the companies who are beneficiaries of the stay-at-home restrictions who have enjoyed strong sales growth. If we put aside materials and gold stocks, the rest of the stock market can be divided into the ‘haves’ and the ‘have nots.’  With the prospect of a vaccine, where are the opportunities for investors?

You can watch the first video in this series here: Are the tech titans really that expensive?

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Roger is the Founder and Chief Investment Officer of Montgomery Investment Management. Roger brings more than two decades of investment and financial market experience, knowledge and relationships to bear in his role as Chief Investment Officer. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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5 Comments

  1. Hi Roger, I have been thinking about housing construction-related stocks such as RWC and Reece. The issue that I think is playing out is de-urbanisation. People will want to get out of apartments and dense living and live in a more decentralised way places which are more easying going with low population density and with stand-alone houses, cheaper living. I can see this happening in Melbourne (an extreme case) – a lot of people want to get out of the city and never come back. Also in the US with growing unrest in urban centres and democrat cities and in places such as China where nobody wants to be locked in an apartment block. If a UBI is introduced this would facilitate this big time and also many people can now work remotely and as they move away from service jobs (health etc)
    will follow and the cities will be increasingly hollowed out.

    • Hey John,

      I think in the very long run, you will find the desire to be in cities, and through migration, will overwhelm the desire to leave. This will ensure that the trend which has been in place for a millennia – cities grow – will continue. One only needs to see the density of other more established cities in the world to realise Sydney and Melbourne have a long way to go. People will of course continue to speak of overcrowding (as they have done through the ages) but cities will continue to grow.

  2. Hi Roger,

    Thanks for all the focus lately on sectors that are likely to perform well as a result of the Covid environment. Given that you are seeking feedback or further topics to explore, I was hoping that you could provide further information on the following:
    – Valuing businesses in the tech space and specifically how you would arrive at an estimated intrinsic value based on current and expected future revenue and earnings (I am eagerly awaiting the follow up white paper from Andrew on Digital Transformation)
    – Portfolio structure and specific stock weightings in a portfolio that considers both the ‘stay at home’ environment and an anticipated vaccine induced recovery
    – The incorporation of any ‘value investor’ stocks or those that may benefit from a potential ‘mean reversion’ such as those in the oil and gas space as consolidation and unprofitable players fall by the wayside, and fossil fuel usage increases again over the next year.

    Thanks in advance.
    Pascal.

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