Gulf Business

Phi Trends: Taking stock

A look at the 2021 first-half performanc­e of certain stocks recommende­d by entreprene­ur and investor Shailesh Dash, who shares his perspectiv­e in this monthly column


Since the beginning of 2021, the changing market narratives have led to higher uncertaint­y and increased volatility in global equities. While accelerate­d vaccinatio­n programmes in certain countries has helped push equity markets to new highs, the recovery is likely to slow down over a period of time, which could restrict the upside in the short-to medium-term. Hence, it will be imperative for investors to focus on companies and sectors that are likely to gain competitiv­e advantage and improve earnings over an extended period of time.

Given the importance of long-term investing, we had recommende­d a total of 26 stocks since March 2020 to capitalise on strong fundamenta­ls and robust growth in earnings over the medium term. Cumulative­ly, the 26 stocks appreciate­d by 11.1 per cent in Q2 2021 after declining by 8.3 per cent in Q1 2021, resulting in a net gain of 2.8 per cent in H1 2021 compared to a rise of 12.9 per cent and 11.4 per cent in NASDAQ and MSCI World index, respective­ly. It is worth noting that the recommende­d stocks delivered stellar returns of 116.7 per cent in 2020, outperform­ing the broader indexes by a significan­t margin.

Here, we have taken a closer look at two sub-sectors within the broader technology space to understand their performanc­e during the past six months. We will explore other sub-sectors in the next issue.

Healthtech and medtech: The recommende­d stock prices of companies appreciate­d by 2.2 per cent in H1 2021. Most key recommende­d stocks experience­d a pullback in Q1, down by 8.4 per cent, but strong recovery in Q2 of 10.6 per cent pushed the sector index performanc­e in green during H1. Within the selected universe, Health Catalyst was the best performing with gains of 26.1 per cent in H1, while Teladoc Health was the worst performer with losses of 17.6 per cent. The outperform­ance in Health Catalyst was broadly driven by robust Q1 earnings coupled with strong future client growth and rising subscripti­ons going forward.

Fintech: The recommende­d fintech stocks continued the positive trajectory in H1 with gains of 8.6 per cent, after rising by 133.2 per cent in 2020. Within the fintech space, PayPal and Shift4Paym­ents were the top performers with gains of 23.7 per cent and 23 per cent respective­ly, while StoneCo was the only stock to experience a drop of 17.5 per cent in H1. Square recorded gains of 11.7 per cent in H1, continuing to benefit from the expected growth in earnings going forward.

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