In 2021 it is expected that in the middle of attention will be stocks of those sectors that belong to the so-called new reality. In many cases they are likely to be stocks that are registered in stock exchanges for many decades and have managed to easily adapt and foresee the future. But there is no doubt that there will be other companies that will grow and become the giants of this new era.
Below, we will try to give an overview of the trends that are of interest depending on the industry to which they refer.
Communication and Marketing Services Sector
The pandemic played a crucial role in the transformation of commerce and advertising. With stores closed and consumers locked in their homes, e-commerce has grown exponentially. It is worth mentioning that even companies that already had a big share in this section, recorded sales growth rates that exceeded 70%, while companies that until then were simply innovative and recorded losses, took off and sales growth even exceeded 300%.
Online marketing has grown steadily by an average of 20% over the last five years with platforms providing access to millions of consumers, growing sharply in their capitalization. For the coming years, companies that deal with online marketing and in general with the provision of communication services in e-commerce, are expected to record a significant increase in their profitability.
In the years that followed the 2008 crisis, US banks have devoted themselves to correcting malfunctions and reinforcing their liquidity so that they can cope with bad financial circumstances in the future. When the pandemic crisis stroke, banks had strong balance sheets and no capital or systemic risk.
Low interest rates have severely curtailed banks' profitability, but government aid has helped keep red loans from rising. In addition, during Trump’s administration, the extremely strict legislation on banks' investment activities was eased, and this triggered profits again from these departments.
Now with banks being strong in terms of liquidity and Fed starting over again dividend repurchase and distribution programs, bank stocks could go through a promising year. At this point, we should not forget the sector of fintech companies, which disrupt the traditional model and offer amazing opportunities for the future.
Copper and lithium mining sector
Joe Biden's political dominance will further boost "green" growth, and investors expect the suggestion of an extensive plan for the reduction of emissions across the United States. In addition, as the latest electric car sales’ figures have shown, estimates have proved out to be conservative.
The electric cars trend is rapidly growing and this is expected to fuel even greater investment interest in companies involved in the production (mining, processing) of basic raw materials such as copper, lithium, cobalt and nickel. In some cases, there is an oversupply at the moment, but as the demand for batteries increases, the demand will be consistently higher.
According to studies, it is predicted that for the next decade these metals could record a significant increase in their prices. In this respect, stock exchanges such as China’s, Australia’s and Canada’s are expected to benefit significantly.
The pandemic has accelerated any developments in the health sector. This sector has always needed high liquidity and innovation. Covid-19, which transferred a lot of funds to the R&D departments, led to the development of methods that could in turn trigger the development of treatments of chronic diseases and accelerated cooperation with the technological sector.
In addition, one of the fastest growing sectors is telemedicine, which is expected to grow exponentially in the coming years. To all this we must count in the investments that are expected to be made in health infrastructure.
The turn to alternative energy sources has already favored these companies, which have solely invested in this sector. Despite the rotation that took place in the previous months, most of investors’ funds have been attracted by these companies.
However, the shift to more environmentally friendly energy sources will last several years. And this is especially important because now the costs of investing in such projects are significantly cheaper than in the past. And this is of high significance, because now investing costs in such projects are much lower than in the past.
Therefore, in addition to the traditional giants of the green energy sector, investors should also focus on some other companies of the sector, which have huge liquidity and are already carrying out large investment projects in the green energy sector. Also of interest are small companies in the sector that specialize in alternative energy sources, but also in the construction and supply of the necessary equipment.