My Ten ‘Buy More And Wait’ Stocks

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By Peter Switzer, Switzer Report

My 10 ‘buy more and wait’ stocks & one wild one!

Our investing year wasn’t supposed to end like this. We should be free of excessive fear and loathing over the Coronavirus, with Australia doing a masterful job to show the world how it’s done. But now we have an issue on the northern beaches of Sydney, which should take a bit of the wind out of our economic sails.

Borders will be closed, albeit temporarily, and the holiday seasons in Queensland, in particular, will be cruelled.

This will have a regional spending effect but probably not a huge national spending and growth effect. But the recent positivity for consumers and businesses will be trimmed back, until good news prevails. This means those confident that reopening trade stocks will have a great 2021 (and I still think they will) now have to accept it will be a delayed start.

There will be oscillation this year between stay-at-home stocks and reopening trade stocks but over the course of 2021 and 2022, as the vaccine works its magic, the latter stocks will do best. And so this current step back, driven possibly by a driver of a quarantine bus, who seems to be a big exerciser and eater/boozer, judging from his tracks from cafés to night spots, will delay the next leg up for reopening trade stocks.

But this creates a buying opportunity for the investor who can play a waiting game. So I’ll list the stocks I’m prepared to buy this week on the basis I can wait for the “all is forgiven” buyback of these companies when we stop having Coronavirus comeback anxiety.

Here’s my list and what the analysts surveyed by FNArena expect from these companies:

The first seven are stocks that will rebound as normalcy asserts itself, post-vaccine. A2 Milk ((A2M)) and Treasury Wine Estates ((TWE)) will bounce back out of a resolution with China. And Megaport ((MP1)), which I’ve liked even more after talking to its founder Bevan Slattery two weeks ago, is a long-term hold in the tech space for me. Last week it spiked 11.53%, along with EML Payments ((EML)) that rose a nice 13.08%. It makes me think others see what I’m seeing.

A2 Milk’s 22% fall really makes me hungry for more, as I’m a good waiter when it comes to quality stocks suffering temporary setbacks. And the analysts agree with their 35% expected upside. (Even if they are half right, I’d be happy!)

My wild one

My final ‘buy more and wait’ stock, doesn’t make my top 10 because it’s not a quality or good operator stock — and that’s Mesoblast ((MSB)). As I’ve always said, this is a speculator’s play — it’s a biomedical stock and by nature they are a gamble.

This company has three main plays but they recently threw in a COVID-19 possible product that they’ve scrapped and the market gave the stock a wide berth. I only got in on its last sell off so I’m prepared to dollar cost average my overall holding cost and wait this ‘sucker’ out.

If one of their products hit paydirt, we will be laughing. If all three do over the next few years, then it will be a mega-blast return on my small dabbling.

2021 and the huge sell-off has encouraged me to build my satellite holdings, as I’ve always been a buyer of quality companies that pay dividends when the market got too negative.

However 2020 was an odd time when governments and the virus saw economies lockdown. Travel and other business sectors were hurt like no one ever expected. The buying opportunity for a patient investor (like yours truly) made it impossible to ignore the chance to acquire good businesses at bargain basement prices.

When normalcy returns, my returns from these currently out-of-favour stocks should be worth the wait!

Peter Switzer is the founder and publisher of the Switzer Super Report, a newsletter and website that offers advice, information and education to help you grow your DIY super.

Content included in this article is not by association the view of FNArena (see our disclaimer).

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

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