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Despite a rollercoaster ride in 2020, with the swift crash of the stock market and then a record-fast recovery, the pandemic has created massive opportunity for certain companies to thrive. In the first quarter of 2021, many in the tech space particularly saw steep gains, thanks to the effects of lockdowns and remote working. Locally, mining companies have tapped the vein of a rising commodity boom. Here are 11 hot stocks to keep an eye on.
Top-performing global shares
Compared to the first quarter (Q1) of 2020, Apple's net income more than doubled in the same period in 2021 to $23.6-billion. Its sales and profits have exceeded market expectations but a looming chip shortage has weighed on its share price, which has barely changed in the year to date (YTD). Still, the iconic iPhone maker founded by Steve Jobs is making serious money.
Google's parent company saw its net income in Q1 2021 soar 162% to $17.9-billion. Its share price rose about 20% in Q1 and has been adding to those gains since. Small wonder – the company posted a record profit for a second consecutive quarter and announced a $50-billion share buyback. Google, a household name which has become a verb, is famed for its search functions and YouTube. But as lockdowns lift, it could take a hit in advertising and other revenue.
Founded by the soon-to-be-single Bill Gates, the software and computer maker which started in 1975 in Albuquerque, New Mexico, has also raked in pandemic profits. In Q1, its net earnings rose 44% compared to Q1 2020 to $15.5-billion as it picked up market share in the cloud. Its share price gained 8% in Q1 and has spiked since.
The social media giant saw its share price climb about 10% in Q1, when its net income grew 94% versus the same period last year to $9.5-billion. Increased digital ad spending and higher ad prices flowed to its bottom line. The company’s shares have maintained their upward trend and recently brought the S&P 500 to record highs. Not bad for a company founded by a Harvard student and his room-mates.
Amazon’s share price is only up marginally this year, a trend partly explained by the huge gains it has made the past few years. Still, it has just posted record profits and in Q1 2021 its net income leapt 220% to $8.1-billion. The US economy is growing at a brisk pace and American consumers are spending and using its online services in droves. Expect the company’s focus on e-commerce to deliver the goods.
Johnson & Johnson
Big pharma is often viewed in an unflattering light. But such companies make products that save lives, and those behind the Covid vaccines are giving the global economy the shot in the arm it needs. Johnson & Johnson, founded in the late 19th century, has had notable wobbles with its single-shot Covid vaccine, and its share price only gained about 5% in Q1. But its latest earnings, including Q1 revenue of over $22-billion, beat market expectations.
One of the world’s largest banks, JP Morgan’s share price is at record highs after gaining around 20% in Q1 2021. Fund manager Vestact has described the company as a “fortress” that paid out dividends all last year in the face of the pandemic. With its range of financial services in a rebounding global economy, JP Morgan is a stock to keep an eye on.
The JSE’s best performing shares
Spun off from Gold Fields in 2013, Sibanye has since made a highly profitable pivot into PGMs (platinum group metals). Palladium recently hit record highs around $2 900 an ounce, while rhodium has been fetching over $25 000 an ounce. The bottom line is that there are critical shortages of these metals used as catalysts in petrol engines. Sibanye posted a record Q1 profit, with its EBITDA reaching $1.3-billion.
A few years ago, Implats was bleeding cash, but restructuring and the commodity cycle have lifted its fortunes. Over the past 12 months its share price has grown over 150%, making it a JSE Top-40 leader.
The petrochemicals giant was on the ropes last year. However, as of early May 2021, it has been the best performer in the year to date (YTD) on the JSE, with its share price up over 80%. A rebound in oil prices, asset sales and cost-saving measures have restored the group’s finances. The company is a huge emitter of the greenhouse gases linked to climate change – a big investor concern – but it is moving into green energy.
Lockdown also means people spend a lot of time on the phone. MTN’s share price is up over 60% in 2021. Its revenue increased 17.8% to R42.3-billion in Q1, boosted by growth in Nigeria and Ghana.
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The Standard Bank of South Africa is an authorised financial services provider (FSP 11287).