The post-Covid-19 world is likely to look very different to the world of a few years ago. Not only are we likely to be working from home more, but we’ll also be doing far more things online.
Looking for stocks that could benefit in this new-look world? Take a look at these three FTSE shares.
FTSE 100 cybersecurity play One industry that is likely to prosper in a post-Covid-19 world is cybersecurity. With more people working from home, you can be sure criminals will be looking to take advantage of vulnerabilities. This means demand for cybersecurity products should be high.
One company that looks well-placed to benefit here is Avast (LSE: AVST). It’s a FTSE 100 technology company that specialises in cybersecurity solutions. Worldwide, it has over 430m users.
Just last week, analysts at Goldman Sachs (NYSE:GS) initiated coverage of Avast with a ‘buy’ rating and target price of 600p – about 15% higher than the current share price. They believe Avast is the “winner” in a cyber-risk world, and said the market underappreciates the company’s opportunity for earnings growth.
I share their view. I think this FTSE 100 cybersecurity stock has a lot of potential. The stock currently has a forward-looking P/E ratio of 19.5.
Online shopping boom Another FTSE stock that I see as a top play for the post-Covid-19 world is Tritax Big Box REIT (LSE: BBOX). It’s a real estate company that owns a large portfolio of sophisticated logistics warehouses let out to major retailers. I see the company as a beneficiary of the shift towards online shopping.
What impresses me about Tritax Big Box is its list of customers. In April, the company said its top five customers by income were Amazon (NASDAQ:AMZN), Morrisons, Howdens, Co-op, and Tesco (LON:TSCO). These are all resilient companies. I also like the fact that tenants are locked into long-term contracts. The average unexpired lease term across its portfolio of warehouses is over 14 years. This increases stability.
Overall, BBOX looks like a fantastic post-Covid-19 play to me. The FTSE 250 stock isn’t so cheap (forward P/E of 22), however I think it’s worth a premium. I see potential for both capital growth and dividends here.
Under the radar FTSE stock In the smaller company space, I like the look of Clipper Logistics (LSE: CLG). It’s an innovative logistics company that offers a wide range of services, including warehousing, delivery, and returns management services. It has a very impressive client list that includes the likes of ASOS (LON:ASOS), Tesco, and PrettyLittleThing.
Clipper, which is a member of the FTSE All-Share index, has grown at an impressive rate in recent years and its prospects, in a post-Covid-19 world, look exciting.
Earlier this year, chairman Steve Parkin said the business is “exceptionally well-placed” to benefit from the continuing migration to online retailing. Meanwhile, in its latest trading update, the company said: “The Board is confident about Clipper’s prospects for the new full financial year. It expects the Company to benefit from evolving trends in the retail sector, as Covid-19 accelerates the shift to online retail.”
Although Clipper shares have had a good run over the last few months, they’re still valued attractively. Currently, the forward-looking P/E ratio is about 16. I see the stock as a ‘buy’ right now.
The post 3 FTSE shares I think will do well in a post-Covid-19 world appeared first on The Motley Fool UK.
Edward Sheldon owns shares in Tritax Big Box, Clipper Logistics and ASOS. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon and ASOS. The Motley Fool UK has recommended Clipper Logistics, Tesco, and Tritax Big Box REIT and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
Motley Fool UK 2020