- Stocks that offer value and future prospects are popular for investors.
- Popular stocks offer good YTD returns to investors.
- Companies which have strong growth plans for the future are also attractive to investors.
COVID-19 has a destructive impact on the global economy, but the Stock markets globally showed an uptrend during this period. The New Zealand stock market also took cues from the global markets and showed a buoyant mood during the coronavirus pandemic. However, there were certain companies that proved to be all-weather entities and were popular with investors. They had robust growth plans, which indicated strong future earnings for investors. Further, with the economy on a rebound phase, these companies are expected to perform even better:
Let’s have a look at some of these stocks:
A2 Milk Company Limited
The dual-listed (NZX:ATM) was trading at NZ$10.93 per share on 10 February 2021 at the time of writing. Being into the consumer staple industry, it is a company that has a large market cap and relatively insulated from market fluctuations. The revenue guidance for FY21 also stands at NZ$1.40B and exhibits a strong EBIDTA margin.
ATM signed a deal with nutritional products company Matura Valley Milk (MVM), which is located in Southand, New Zealand. Geoff Babidge, the CEO, said that the agreement would help a2 Milk Company build a stronger product portfolio for New Zealand and develop new geographies.
Moreover, the demand from China is also moving milk price up. In five subsequent auctions, milk prices moved up and the increased prices are also helping the cash flows of the Company, making it attractive for investors.
Meridian Energy Limited
Meridian Energy Limited (NZX:MEL) operates as an electricity generator throughout New Zealand. It is a state-owned company, in which the NZ government owns 1% stake. MEL is majorly into hydro energy. It also has a large market cap and is invested heavily in wind farms. It owns five wind farms in NZ and two in Australia.
It has two more wind farms coming up in NZ. Its stock performed well on the NZX, up over 60% in the last three months of 2020.
In fact, the spectacular rise in its stock price also came under inquiry. NZ RegCo had written a letter to Meridian Energy to inquire into the steep and sudden jump in its stock price. Even between December 21 to 29, the share price had gone up by 20.27%, but MEL was exonerated.
MEL was trading at NZ$6.61 on 10 February 2021, at the time of writing this article.
Auckland International Airport Limited
Auckland International Airport (NZX:AIA) faced unprecedented circumstances due to the COVID-induced restrictions on international travel. The whole of the last year, the world moved from one lockdown to another and therefore, Auckland Airport in its traffic updates reported a month-on-month decline in international passengers.
Going forward, due to new strains of Coronavirus, even FY 2021 is also not likely to see a recovery in international travel and tourism.
Despite all this, it is a popular stock with investors, as once the world recovers from COVID-19 and travel restrictions are removed, the Company is likely to recover its lost ground. It is the largest airport in New Zealand and its fundamentals are strong.
AIA stock was trading at NZ$7.10 on 10 February 2021, at the time of writing this article.