2021 Roundtable: Vaccine News - Value
-Today our contributors who specialize in value, dividend, high yield, income, and REITs share their thoughts.
-We will return with Part 2 of the 2021 Outlook Roundtable in early January.
-The Marketplace team wishes to all who celebrate a Merry Christmas!
We end our 2021 Roundtable - Part 1 - Vaccine News series with our contributors who focus on value, dividend, high yield, income, and REIT investing. We asked our authors the following:
Now that vaccines are approved in several countries, a post-COVID reality is in sight. How does this impact the investment horizon in your area of expertise for 2021? Name up to three stocks/ETFs that will outperform as a result.
The answers were compiled as late as Sunday, Dec. 20. As usual, feel free to comment below - we'd love to hear your opinions.
Out Fox The Street by Stone Fox Capital: A vaccine sets up the economic reopen trade for 2021 which includes a lot of the stocks in the Out Fox model. These stocks had solid business models harmed by COVID-19 shutdowns. These stocks haven't recovered to pre-virus levels, yet the business prospects are promising heading into a virus-free world. A primary stock of focus is Yext (YEXT). The search experience cloud company has seen growth stall as enterprises focus on work-from-home solutions and delay implementing new search functions on their own website. The stock trades near multi-month lows despite the potential to return to 20%-plus growth when the economy fully reopens.
A recent addition to the watchlist is Vesper Healthcare Acquisition (VSPR) after the company agreed to a business combination with HydraFacial. The beauty health treatment company has seen revenues slump this year due to closed medical spas around the country, but HydraFacial has seen monthly revenues already rebound close to previous highs. During the slowdown, the company was still able to sell more units setting for a strong recovery in treatments once the economy is fully reopened for beauty treatments.
The SPAC trades just above the IPO and PIPE funding rounds at $10 providing investors the opportunity to buy near where institutions bought shares unlike recent hot IPOs.
The airlines remain the riskiest play with the most upside. An airline like United Airlines (UAL) is still down 50% for the year while the company was cheap prior to virus shutting down travel. At a normalized '22 EPS target of $12+, one can easily envision how the airline stock has plenty of upside when travel surges.
Disclosure: Long YEXT and UAL.
See full article on Seeking Alpha.