Small and mid-cap global equity specialist, Bell Asset Management, this week released a paper outlining its best ideas for the rest of the year. In the paper, titled “COVID Opportunists,” the group has identified six global leaders that have emerged stronger through the pandemic.
During a year when Covid-19 ravaged company earnings, these six companies managed to grow. Bell has named these businesses the “COVID Opportunists” because they were able to take advantage of the COVID environment and build on their already strong franchises. These companies are:
- Pool Corp (NASDAQ: POOL) – The world’s largest wholesale distributor of swimming pool supplies, equipment, and related products has benefited from consumers being at home and more pool useage during COVID. According to Bellm favourable end-market conditions should see the company continue its growth trajectory.
- Techtronic Industries (HKG: 0669)– The cordless power tool provider remains a top pick, with Bell saying, “we continue to believe in a robust growth trajectory for the stock post-COVID through the recovery in the commercial market, as well as accelerating market share gains.”
- Thule (STO: THULE)- The global leader in vehicle bicycle racks, roof boxes, and cargo carriers is set to benefit from “the ongoing supply chain constraints in bikes and RV-related categories will help to extend the brand strength seen during COVID for more years to come.”
- Tractor Supply (NASDAQ: TSCO)- The largest retail farm and ranch store chain in the US, “benefits from little competition, strong management with an exceptional track record of execution, high visibility in unit growth and continued initiatives to drive margins higher,” says Bell.
- Fortune Brands Home & Security (NYSE: FBHS) – The home improvement products manufacturer has benefited from consumers being in lockdown and choosing home improvements and DIY in place of travel. “There is a strong under-appreciated housing recovery underway in the US over the next few years, and FBHS is very well placed to benefit from this,” Bell says.
- Yeti Holdings (NYSE: YETI) – The outdoor and recreation branded products distributor saw an increase in demand during the COVID period. Bells says, “US consumers spent more discretionary dollars on outdoor living and this trend is continuing as lockdowns persist and US consumers decide to have more localised and outdoor-type holidays.”
Looking ahead, the funds manager expects volatility to continue despite a strong earnings recovery. In this environment, Bell says there are many high-quality global SMID (small to mid-cap) companies that should emerge even stronger in a post-COVID world: the above six are its star picks.