The Best Reopening Stocks to Buy
The economy is about to grow as we finally get to shop, travel and be entertained. The question isn’t whether some sectors will grow, it’s really about which companies and stocks are to benefit from the reopening in 2021/2022.
We all predicted the recovery would progress, however quite a few investors are lagging behind in choosing stocks that will perform well today, next week, next 6 months, 2022 and the next 5 years. We must pay better attention to the forecasts.
Growth in the Dow Jones, S&P, and NASDAQ will be more subdued when we reach the summer of 2022. By then, the recovery in tourism, hospitality, recreation, leisure, and even manufacturing will have returned almost fully. Sure Covid will linger, but for those with vaccine passports, life will return to normal.
The reopening or recovery stocks are those which suffered badly during the pandemic and included retail shopping and services, tourism, restaurants, travel, and sporting events. These sectors lost tens of billions of dollars and financial distress and personnel loss. Some have made it through, but have built up debts which will weigh on their own profitability in the years ahead.
And if there are recovery hold backs, we have to remember that a wave of pent up demand should make up for the loss of spending from low income and unvaccinated consumers.
Reopening Trade Didn’t End in March
Some say the reopening trade is over, that business is back already, but that simply isn’t true. In some cities, people still don’t attend sports events, use hotels, dine at indoor restaurants, fly on flights, or go to get their hair cut. There’s still fear and trepidation, yet that will fade through the winter into the spring.
That gives you time to buy reopening stocks in travel, retail, energy, industrials, restaurants, and consumer services. Find those that performed badly through the second half of 2020 and have survived the pandemic. Note where their prices are now and how much further they might rise in the full recovery.
Stocks such as Delta Airlines, Boeing, Disney, Restaurant Brands and Target are good bets for this period. Target is also a back to school stock pick too.
Right now, you’re seeing the market peaks and trying your luck at picking individual stocks and even trying market timing with buying the dips.
Investing in stocks, oil, gold, and cryptocurrency may get much more difficult and you’ll be on your own trying to grow your wealth. And when the going gets really tough, those with big funds may look to the real estate market to buy something with rental income value. You’ll want to stay tuned to the housing market forecast for 2022 and beyond.
Big investors are still looking at the reopening trade, and the Russell 2000 small caps have been doing well the last week.
- Ryder System, Inc. (NYSE: R)
- Restaurant Brands International Inc. (NYSE: QSR)
- Realty Income Corporation (NYSE: O)
- American Airlines Group Inc. (NASDAQ: AAL)
- Abercrombie & Fitch Co. (NYSE: ANF)
- Chipotle Mexican Grill, Inc. (NYSE: CMG)
- Crocs, Inc. (NASDAQ: CROX)
- Deere & Company (NYSE: DE)
- Airbnb, Inc. (NASDAQ: ABNB)
- The Boeing Company (NYSE: BA)
- Caterpillar Inc. (NYSE: CAT)
- Target Corporation (NYSE: TGT)
- Johnson & Johnson (NYSE: JNJ)
- The Walt Disney Company (NYSE: DIS)
- Mastercard Incorporated (NYSE: MA)
How About Alternatives to Recovery Stocks?
There’s other sectors that are doing well, including financials which are benefitting from the reopening trade and who have higher interest rates in their future. Financials are showing up top on the best performing stocks of the last 12 months too, which makes them look very good. Check out Mastercard, Visa, Goldman Sachs, JP Morgan, Wells Fargo, Morgan Stanley, and Bank of America.
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