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Buying stocks in the Omikron crisis: Here are three (possible) surprise winners

2021-11-29T14:01:18.573Z


With the appearance of the Omikron variant, the corona crisis is worsening again, also on the stock exchange. However, there are also investment opportunities associated with this - some cannot be recognized at first glance.


Enlarge image

"Lipstick-Effect":

No matter how big the crisis is - lipsticks are always bought

Photo: AP / DPA

The corona fear has a new name: Omikron. On the stock exchange, the new variant of the Covid-19 pathogen, which was first detected in southern Africa and is now appearing in more and more countries, caused a real sell-off last Friday. The Dax closed the trading day with a loss of more than 4 percent, while the US blue-chip index Dow Jones ended up losing 2.5 percent.

Investors are trying their hand at optimism on Monday. However, it seems clear that the nervousness on the stock market with regard to the pandemic has increased significantly again with the appearance of the new virus variant. How contagious is the mutant? How badly can it harm the infected? And above all: How effective are existing vaccines against it - or are new vaccines even needed? These questions are currently open, and as long as there are no answers, Omikron can cause further turbulence on the stock exchange at any time.

What this means for the different industries should be clear after more than a year of the Corona crisis. The winners and losers of measures such as restrictions on air traffic and travel or extensive lockdowns have clearly emerged on the stock market over the past few months: Aviation and tourism stocks and stationary retail, for example, naturally perform poorly. The beneficiaries, on the other hand, include: providers of video communication such as Zoom or Microsoft (with the Teams software), whose services are in demand in the home office, online retailers such as Amazon, delivery services such as Hellofresh or Delivery Hero and, of course, developers and marketers of vaccines. The shares of the Mainz biotech company Biontech have been skyrocketing since Friday.

Price gains thanks to the "lipstick effect"

But not all industries and companies fit into this well-known pattern of corona winners and losers.

The pandemic has double-edged consequences in many sectors of the economy, leading to both advantages and disadvantages.

In addition, there are areas of the economy that are developing completely differently than would be initially assumed.

The latter are possibly particularly exciting from an investor's point of view.

Because if you are correctly positioned there in good time, you may achieve income that many other investors miss.

One example is the

cosmetics industry

. The common consideration would be: If millions of people go to the home office for months (as will probably be the case in Germany in the near future), and if also social get-togethers, for example at parties, in restaurants and pubs or in clubs and discos, is severely restricted, this should affect sales of cosmetics.

But the reality looks different.

In a pandemic environment, sales of particularly luxurious cosmetics are suffering because most of them are sold at airports.

At the same time, however, there is a phenomenon that stock marketers refer to as the "lipstick effect": Even in times of crisis, when people do without (or have to do without) many things in everyday life, they do not allow themselves to be taken away from buying lipstick.

For example, sales of basic beauty products such as lipstick or make-up did not decline in the uncertain times after the terrorist attacks of September 11, 2001 - they actually increased.

Car manufacturers defy adversity

In addition, many cosmetics companies such as the French L'Oréal group now also do part of their business with care products. In any case, in the Corona year 2020, industry giants such as L'Oréal or the US competitor Estée Lauder did a remarkable job. The stocks quickly made up the losses they posted in the initial crash of spring 2020. In the past few months in particular, both papers rose to a historically high level.

Also better than recently thought, the

auto industry is

currently in the Corona crisis

. First there were the forced production breaks in the course of the Corona lockdowns in 2020, then the chip shortage hit with full force and led to significantly fewer cars being manufactured in the industry. The manufacturers have had ample cause for complaint in the past few months. What, however, received less attention in all the discussions about shortage management, stressed logistics chains and production breaks: The big carmakers, especially the premium brands, are coping much better with the uncertainties than originally expected - and surprising with profit records instead of the evaporation of forecasts.

BMW, for example, increased its operating profit by 38 percent to around 2.9 billion euros in the third quarter, although Bayern sold 15 percent fewer cars. The situation is similar with its competitor Daimler: The Swabians sold a quarter fewer cars than in the same quarter of the previous year, but consolidated earnings rose by a fifth to around 2.6 billion euros. At Volkswagen there was recently a slight decrease in profit, but in the fourth quarter the Wolfsburg-based company is expecting a "clearly positive result compared to Q3" and want to "increase sales over the previous year in 2021 as a whole".

Even if the operating return on the Wolfsburg-based company will be only 3 percent this year, it should be 6 percent in 2023.

Overall, the 16 largest automakers in the world generated more profits in the past quarter than ever before, shows a study.

The reason for the optimism in spite of all the difficulties: According to the bank, the automakers managed to reduce their fixed costs.

And the very high prices currently on the used car market are helping them all.

Since the delivery times for new cars are very long at the moment, many customers switch to young used cars.

And they currently cost just as much as new cars.

Because the corona pandemic has increased interest in a reasonably virus-safe means of transport among many.

Hope for the office comeback

The side effect, which is not exactly unpleasant for the carmaker, with the delivery bottlenecks for new cars caused by the lack of semiconductors: There are currently no discount battles for new cars, the price-enforcement power of the carmaker has increased. And that should stay that way for a while - which is why the car manufacturers should initially win even if the corona crisis flares up again. Unless the corporations have to limit their production again because of the spread of the new Omikron variant and, for example, close plants - that would probably change the situation fundamentally.

Finally, a little speculation: Companies that

earn

their money by investing in and operating

office properties

could also be an attractive investment.

This, too, would be counter-intuitive, after all, everything indicates that the trend towards home offices will at least in part continue beyond the pandemic.

Conversely, the demand for office space should hardly increase.

On the one hand.

On the other hand, it is conceivable that people in offices will continue to value greater social distance in the future.

It may even become a requirement.

Existing office space would hardly grow with it - so it suddenly gains in value.

Office real estate companies such as Alstria Office Reit AG, Hamborner Reit AG or DIC Asset did not achieve a strong performance during the Corona crisis.

All three papers have performed weaker than the overall market since spring 2020.

It is conceivable, however, that companies with this business model will turn out to be late corona winners.

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Source: spiegel

All news articles on 2021-11-29

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