Global multi-asset investment platform eToro’s analyst Josh Gilbert has made his stock picks for September 2021.
These are the stocks that Mr Gilbert believes will perform well and are expected to gather significant investor attention this month.
Apple
Apple shares have recently notched a new record high, closing on 30 August at US$153.12 per share. Apple is also coming off a stellar FQ3 quarterly result, with growth across the board and setting record revenues.
As the final months of 2021 near, investors are gearing up for Apple’s latest iPhone launch, which historically occurs around this time of year. The new iPhone 13 is set to be the company’s most advanced phone to date, with the option to allow users to send texts or calls to emergency services with no service. This is a concept that Apple has been working on since 2017.
The 5G upcycle of mobile phones is in full swing, and investors can expect this to continue with the iPhone 13. On top of this, Apple is expected to release new lines of its wearables products such as AirPods, which are a massive hit with consumers and make up 10 per cent of total revenue.
Although Apple shares are currently trading at record highs, the company has still underperformed the broader index of the S&P 500 year-to-date (YTD). Nevertheless, with some considerable product releases in the second half of 2021, Apple is definitely one to watch.
CrowdStrike
In May 2021, US President Joe Biden signed an executive order aimed at improving the nation’s cyber security and strengthening the federal government’s ability to prevent cyber-security threats.
One of the biggest public cyber-security businesses, CrowdStrike, is expected to reap the rewards of Mr Biden’s plans. The company is growing at an exceptional rate, with 70 per cent year-over-year revenue growth in its Q2 earnings, whilst adding over 1,660 customers, up 81 per cent. CrowdStrike also raised guidance for Q3 and the full year, with both coming in above analyst expectations.
As many global businesses continue to upgrade their cyber-security systems and enterprises move more work to the “cloud” than ever before, cyber-security spending is expected to top US$200 billion by 2024. With this in mind, CrowdStrike is in the perfect position to benefit as cyber security becomes a necessity for all businesses.
Vanguard FTSE Europe ETF
While many investors often diversify by sectors, they generally forget to diversify by regions too. Different economies will mean local markets perform differently. Right now, it’s a great time for investors to look at European equities in order to diversify outside the US.
European equities are relatively cheap when compared to US equities, which signals an opportunity for investors after years of outperformance.
The Vanguard European Stock Index Fund ETF (VGK) holds some of the largest stocks in Europe, including luxury retailer LVMH Moet Hennessy Louis Vuitton SE, AstraZeneca and Nestle S.A.
Moreover, Europe’s cyclical indices make the region more sensitive to the reopening rebound, and therefore, it is expected that European equities will outperform moving into 2022.
Alibaba
Chinese multinational technology company, Alibaba, has seen its shares price tumble by around 28 per cent so far YTD. Ongoing regulatory scrutiny in China has sent Chinese stocks lower in the last two months and Alibaba has felt the full effect of this.
Despite this, Alibaba’s fundamentals remain strong, with a positive earnings report at the start of August 2021, announcing US$2.57 per share on US$31.85 billion in revenue. Alibaba reported a significant increase to its share buyback program, increasing by 50 per cent to US$15 billion. This essentially means Alibaba feels the stock is undervalued and expects further growth in the share price.
Alibaba’s valuation is close to historic lows, trading at a forward P/E ratio of 17.37, lower than value stocks such as Home Depot and Target. This essentially opens an exciting opportunity for investors looking for a bargain. Of course, there will be ongoing risks with Chinese stocks, but adopting a dollar-cost averaging strategy can help investors navigate the volatility on a stock that’s undervalued.
