Company / Analytics

Analytics, 06 January 2022

Top Stocks to Buy for a Post-Pandemic Recovery

The emergence of new covid-19 variants, inflation fears, central-bank policy decisions, supply chain challenges, labor shortages, among others, have in recent times hit some of the prospects for the post-COVID economic recovery. However, analysts still expect an economic recovery in 2022, and some return to normal by 2023. A post-pandemic boom that started in 2021 is likely to continue when stay-at-home measures or as governments learn to co-exist with the pandemic.

Some of the stocks that investors can look towards in hopes of riding these growth catalysts include among others, Airbnb, Walt Disney Company, Comcast Corporation, Expedia Group, Live Nation Entertainment & Delta Air Lines.

Top Recovery Stocks to Buy

1. The Walt Disney Company

The Walt Disney Company (NYSE: DIS), perhaps one of the most recognizable brands in the world, is also expected to be one of the big gainers of the year as theme parks reopen in tandem with relaxed social distancing rules and easing mask mandates.

The Walt Disney Company shares have returned 62% to investors in the past year. The firm, an entertainment and mass media conglomerate, was able to weather the COVID-19 impact better than competitors as it had an internet streaming platform, named Disney+, to offset some of the pandemic losses. As the economy reopens, and theme parks welcome visitors again, the company can benefit a lot from the increased activity.

On May 26, investment advisory maintained a Buy rating on The Walt Disney Company (NYSE: DIS) stock with a price target of $215, implying an upside potential of over 20%. UBS also named Disney among the high conviction picks with strong growth potential in the coming months. At the end of the first quarter of 2021, 134 hedge funds held stakes worth $12.5 billion in The Walt Disney Company, down from 144 in the preceding quarter worth $16.4 billion.

2. Hess Corporation (NYSE:HES)

Hess Corporation (NYSE: HES) is a global energy company. The stock returned 82% to investors in the past year. After a torrid 2020, with oil prices at record lows, the firm has bounced back as travel resumes and oil prices pick up again, with further growth expected as airlines resume operations and international borders reopen.

Hedge funds investing in Hess Corporation include Washington-based investment firm Fisher Asset Management, with 3.3 million shares worth more than $235 million.

3. Airbnb

Airbnb, Inc. (NASDAQ: ABNB) is a vacation rental firm based in California. It only made its stock market debut late last year and could not fully capitalize on the promise it offered to investors as the COVID-19 restrictions prevented the company from registering noticeable growth.

Airbnb is positioned to emerge as one of the best players amid the hot demand trend for travel in the post-COVID economy. Analysts maintain an outperform rating on the stock with a price target above $200. The firm has undertaken platform improvements and enhanced marketing campaigns that would enable Airbnb to capitalize through the rest of the year.

At the end of the first quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Airbnb, Inc. (NASDAQ: ABNB), down from 68 in the preceding quarter’s worth $1.6 billion.

Analysts believe Airbnb has an excellent management team, a very attractive growth profile with many levers at their disposal, and embedded optionality due to their attractive position in the travel ecosystem (and minimal reliance on Google).

4. Delta Air Lines, Inc. (NYSE: DAL)

Delta Air Lines, Inc. (NYSE: DAL) is one of the biggest airline carriers in the United States. As a travel boom follows the reopening of the economy, the company has been attracting positive reviews from analysts at investment advisories Jefferies and MKM. Jeffeires has a Buy rating on the stock and MKM has named it among its top picks for the travel recovery. The stock has returned more than 65% to investors in the past twelve months.

On June 21, news platform CNBC reported that Delta Air Lines, Inc. (NYSE: DAL) was considering hiring close to 1,000 new pilots within the next twelve months as travel demand picked up around the world and business increased. Out of the 50 hedge funds holding stakes in Delta Airlines, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Delta Air Lines, Inc. (NYSE: DAL) with 4 million shares worth more than $195 million.

5. Comcast Corporation

Comcast Corporation is a telecommunications firm with significant stakes in the broadcast and entertainment businesses. The stock has returned 45% to investors in the past year. The firm recently launched the Peacock internet streaming platform which has already signed a deal with Amazon Fire TV for distribution. Comcast has a market capitalization of over $250 billion.

Analysts, including investment firm Oppenheimer upgraded the stock to Outperform from Perform with a price target of $75 on the back of growth outlook for the firm as the COVID-19 pandemic waned.

Of the 88 hedge funds investing in its stock, New York-based firm Eagle Capital Management is a leading shareholder in Comcast Corporation with 38 million shares worth more than $2 billion.

Comcast is the largest cable provider in the U.S. and is the dominant internet access provider in the markets it serves. Though Comcast will likely see further declines in cable subscriptions due to ongoing cord-cutting, it should be able to offset that lost revenue by growing internet access customers and instituting higher pricing. The pandemic has increased the importance of a fast internet connection, with more content streaming to homes at increasingly higher quality. Comcast made significant upgrades early on, allowing it to quickly deploy new technology and increase speeds to meet the evolving needs of its customers.

The relaxations would allow the company to resume filming, and as cinemas reopen, another source of revenue would be added to the money pipeline that would strengthen the firm in the coming weeks and months. As the internet streaming business of the firm grows, it could rival other streaming giants in the space because of sheer capital backing.

6. Live Nation Entertainment, Inc. (NYSE: LYV)

Live Nation Entertainment, Inc. (NYSE: LYV) is an entertainment company that manages ticket sales for different kinds of live events. The stock has offered investors returns exceeding 117% over the past twelve months. Analysts maintained an outperform rating on the stock in 2021 with a price target of $97 on the back of expectations of strong growth as the economy reopened following the pandemic.

Out of the 37 hedge funds with a stake in Live Entertainment, Virginia-based investment firm Akre Capital Management is a leading shareholder, with 5.4 million shares worth more than $462 million.

7. Expedia Group, Inc. (NASDAQ: EXPE)

Expedia Group, Inc. (NASDAQ: EXPE) shares have returned 121% to investors in the past year. It is an online travel firm based in Washington. The firm recently beat market expectations on earnings per share and revenue for the first quarter of 2021, reporting a 14% year-on-year increase in bookings on the platform that are set to increase further as the vaccine rollout allows for more business operations to resume.

At the end of the first quarter of 2021, 86 hedge funds in the database of Insider Monkey held stakes worth $6.1 billion in Expedia Group, Inc. (NASDAQ: EXPE), up from 76 in the previous quarter worth $6.5 billion.

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