This Wall Street Expert Believes These 4 Sectors Will Boom
Steve Lipper, senior investment strategist and managing director at Royce Capital Investments likes these 4 sectors, according to Business Insider.
Lipper likes these four market sectors for small-caps that investors should look for as credit spreads shrink and the economy recovers.
- Recreational Vehicles and Boats
People will increasingly vacation in less dense areas and observe social distancing. "If you wanted to rent an RV, you're not getting one. Boat and RVs, they are having record sales," Lipper said. "Everyone is going, 'Ok, we want to go somewhere, we want to do something'." Winnebago Industries and Thor Industries are good names in this sector.
- Merger and Acquisition Boutiques
Firms will be assessing the damage from the economic fallout of COVID-19. "It's pretty clear that there's going to be a lot of wounded companies after this," Lipper said. "Either two things have to happen: either they're going to be acquired, or they're going to go bankrupt and their balance sheets are going to need to be restructured. These M&A boutiques also have restructuring practices."
Lipper sees growth in the housing industry. "The housing manufacturers themselves often are a little boom and bust, but really more the building supply folks," he said. "But there are also sort of clever ways to play it, like title insurance companies. Every time someone buys a home or refinances, you need to do a title search." First American Financial and Old Republic International are good names in this sector.
- Cloud and 5G
Lipper likes cloud and 5G technology. The iShares PHLX Semiconductor ETF is a good name in this sector. "We're participating in the companies that ride along with the growth of the cloud and of 5g. Whether those are semiconductor companies or whether those are specialty chemical companies that support the semiconductor manufacturer," Lipper said. "The way you think about small-caps is it's usually sort of niche suppliers into some area that is seeing growing demand that we're looking to participate in."